Q&A with Hilary Devey, Managing Director of Pall-Ex

Pall-Ex, the palletised freight network founded by acclaimed entrepreneur Hilary Devey CBE, recently celebrated its 20th anniversary.

Since shifting 117 pallets in one night in November 1996, Pall-Ex has grown to a network that distributes more than 10,000 pallets every night, with partnerships established across Europe in Italy, Spain, Portugal, Romania, France and the Benelux region. 

In an exclusive Q&A interview for Freight Industry Times, she outlines the key challenges that lie ahead for the business - and the wider freight/logistics sector - in the wake of the Brexit vote.

What has been the greatest challenge for the business over the past two decades?

It’s safe to say that logistics remains a growing sector with more networks and hauliers now appearing across the UK and Europe every year.

However, the increase in competition has led to a reduction in already tight margins for many hauliers. Even after 20 years in business, I still have sleepless nights when I hear about a network member struggling to survive financially.

More recently, the uncertainty caused by the Brexit vote means that legislation changes will soon be up for debate after the power of the EU is reduced over time. This will invariably lead to a number of new challenges, which we are already preparing for at Pall-Ex.

Successful businesses are continually innovating. How does Pall-Ex do things differently?

We recognised that the practice of price slashing in the industry was becoming increasingly problematic for the network and its members. This simply wasn’t good enough. As a board, we put together a strategy to help raise industry standards so that customers would be willing to pay more for our services and improve standards across the sector.

Over the past couple of years, we have intentionally restricted network growth to allow us to concentrate on service quality. We’ve restructured our hub teams and increased our focus on customer care, including further reinvestment towards research, training and staff development. As a result, we are now setting the benchmark for quality across the sector, with hauliers now having the tools and knowledge to be able to charge customers more.

What are the top three priorities for the business?

The number one priority for Pall-Ex has and always will be ensuring the success of our members across the entirety of the network. We want network members to feel fully supported. Network managers, sales support teams and a telesales agency are all on hand, and our marketing team helps develop bespoke marketing plans to help grow their business and keep customers happy. We’ve even had occasions where regional managers with a licence have rolled up their sleeves and got behind the wheel to help with member deliveries.

Building quality relationships with our European partners is also of chief concern. Our master license strategy involves partnering with an established network in each new region meaning we are able to adapt to national legislation and practises seamlessly, rather than just dropping a new cohort of British staff into a new country.

Finally, our green credentials are still encapsulated in everything we do. We are the only palletised freight network to hold UK-wide ISO 14001 accreditation and work hard to achieve the highest fill rates possible and reduce any impacts to the environment.

What are the three most important challenges for the wider freight/logistics sector? How should we address them?

Infrastructural changes as a result of improvements in technology will undoubtedly impact on how we operate as a business. The influence of millennials and Generation Y workers will have a big impact on the way we work, and businesses must be ready for the transition towards a predominantly digital approach to working.

We have already invested millions of pounds into new technology. Real-time proof-of-delivery, digital signature capture and live tracking is now the norm and Pall-Ex has developed bespoke IT platforms to help centralise all shipping, billing and management functionalities.

Driver shortages are also a key concern for Pall-Ex as well as other UK networks. Our research into how our industry is perceived as a viable career choice suggests that the impact of this declining workforce looks set to peak. According to the Freight Transport Association, only 1 per cent of employed drivers are under 25, so we need to work hard to attract a new, younger pipeline of talent to the industry.

Finally, legislation changes as a result of Brexit will play a crucial role in the development of the sector over the next few years. Businesses must be ready for these changes and prepare for all eventualities.

Following the Brexit vote, how do you think the sector will evolve in the short/medium/long term?

Brexit will present some critical new challenges to the sector. How great these will be will depend on the government negotiations in the coming months.

The benefits of EU membership include crucial legislation enforcements regarding maternity leave, safe working hours and environmental pollution targets. It’s integral that regardless of the result of upcoming negotiations that guidelines remain in place for the sake of our workers.

However, amongst the challenges, there will be new opportunities that were previously unattainable. I’m confident that the industry will continue to grow over the next two decades. With new technology, hauliers now have the tools to be able to diversify into new markets. In retail for example, there is increasing pressure for stores to hold lower stock levels and this is where I feel there is money to be made for palletised freight partners in years to come.

The uncertainty of Brexit has not deterred Pall-Ex’s expansion across the continent. Our operations abroad are continuing to flourish, with the European market now accounting for more than half of our total pallet volumes. In 2016, we have launched new operations across the Benelux nations and we’re already in talks with other partners, which will see the network expand into new territories in 2017.

Best advice for anyone thinking of starting their own business?

I’ve been asked this question a lot over the years and my response has never changed. Starting a business is one of the biggest decisions you will ever make in life as you become responsible for your own financial standing as well as your members of staff.

Business acumen and judgement is vital for the operation of a successful company and there’s no point launching until you have identified your marketplace and clearly established a USP.

You’re not going to become a savvy entrepreneur by just reading books; doing the work yourself helps to learn the true graft of running a business. One moment that always springs to mind was on the first night of Pall-Ex’s operation, which was spent in an old aircraft hangar! We managed to deliver 117 pallets that evening, all without power or running water – a very different look to the Pall-Ex hub of today!

Determination and tenacity is critical. I learnt this from the beginning when the banks all shut their doors on me in terms of funding. I had to sell my house and car to raise the money – which isn’t something I would recommend those starting out today, but at the time, I had a point to prove.

For more information about Pall-Ex, visit www.pallex.co.uk