The e-commerce boom during the pandemic not only spawned a surge in parcel deliveries, but also a marked rise in demand for pallet-based home deliveries. The growth in the segment is such that 20% of the pallet deliveries conducted by the Pall-Ex pallet network are now B2C.
The process of delivering pallets to consumers’ homes is nonetheless much more complex than in the case of parcel delivery, leading to extra costs and challenges. Missed deliveries, for example, which have been a bugbear in the parcel sector for some time, are altogether more costly for pallet delivery operators.
Given that this upshoot in demand for B2C pallet deliveries has come at a time when costs are rising and skilled labour is in short supply, the need for optimisation is obvious.
One pallet network that’s taken strides in this area of late is Pall-Ex, led by CEO Kevin Buchanan. In this exclusive interview with Buchanan, we delved into how the company is addressing this burgeoning demand through both its technology and its people.
Why B2C pallet delivery is growing
First and foremost, why is the B2C pallet delivery segment going through a significant increase in popularity?
Buchanan told Trans.INFO that the e-commerce pandemic boom also rubbed off on pallet deliveries, as consumers intent on home improvements during lockdown started to order all manner of bulky items that would lend themselves to a pallet-based delivery.
Although demand has fallen since the pandemic peak, a behavioural shift appears to have taken place that will see B2C deliveries form a noticeable part of many pallet networks’ activities going forward.
“B2C has been, for a number of years now, the fastest growing part of pallet deliveries ordered on the Internet. People sell all sorts of things. Online you can order anything from a pallet of tiles or stone to a new mountain bike or a BBQ. Pretty much anything that doesn’t require temperature controls can go on a pallet and be transported through a pallet network,” the Pall-Ex Group CEO told Trans.INFO.
Cutting expensive missed-deliveries through the provision of 2-hour windows
To meet this aforementioned increase in demand, as well as higher expectations from customers, Pall-Ex turned to transport optimisation specialists The Algorithm People to develop AI-powered tracking capabilities for its shipments.
Pall-Ex claims the technology enables the generation of accurate 2-hour delivery windows that improve efficiency and streamline services for both customers and consignees.
Buchanan states that the new system has empowered customers with tracking capabilities akin to those provided by major parcel delivery services like Amazon.
Buchanan told Trans.INFO that while these features may be commonplace in parcel delivery, it is not necessarily the case when it comes to B2C pallet-based deliveries. Indeed, as he sees it, the pallet network sector “has been running 5 years behind the parcel industry” when it comes to delivery visibility.
The Pall-Ex Group CEO nonetheless stressed a keenness to utilise technology in new ways, telling Trans.INFO that he wants to see his company plug that gap and even get ahead of the parcel industry.
“Giving the customer the possibility to see if a delivery has been dispatched, or is at the depot, or en-route, as well as the delivery window, who the driver is, and when they can expect the delivery, is not necessarily new in the parcel industry. However, in the pallet industry, because of the complexities of larger consignments and other issues, nobody’s really cracked it,” said Buchanan, who has over 17 years’ worth of experience in the sector.
By leveraging advanced algorithms and robust technology infrastructure, Pall-Ex says it has achieved an impressive delivery success in the high 90% range.
“The algorithm looks at the driver’s route based upon the first and last deliveries, let’s say point A and point Z, and works out the most efficient path. It takes into account how long route 1 will take and when route 2 will begin and so on. So through a combination of the algorithm, the customer notification, and more efficient use of technology, we can get the most optimised delivery routes possible. That means a much lower carbon footprint and fewer vehicles on the road,” said Buchanan, explaining how the system works.
Another bonus of the system is that due to consumers having access to the information they need, no time is wasted dealing with enquiries over the phone:
“One corporate customer of ours had said they were getting 80 calls a day asking about when their pallets were going to be delivered. That was a big staff commitment for them to manage, and now that problem’s gone away because the customer knows when the goods are coming,” said Buchanan.
Buchanan added that when the customer has this info, they are far less likely to miss a delivery, which in turn makes planning so much easier:
“You do get genuine misunderstandings with B2C deliveries. Some customers may have to leave at 3pm to go and pick the kids up from school, and don’t know that their delivery will arrive during that time. So the 2-hour window does enable the customer, and therefore ourselves, to manage the day better. It’s better for the environment too because you reduce the number of failed deliveries. With a narrower window, that failure ratio is much lower, and you’re not sending the vehicle back out the next day to do the same delivery.”
Failed deliveries don’t just mean repeat journeys either. The pallet that was supposed to be delivered could be blocking other pallets, which complicates the unloading process for the subsequent deliveries.
“You’ll probably have to move that pallet 12-15 times to get all the other deliveries off when doing your delivery route. This creates much bigger problems just through the scale of what we do,” said Buchanan.
Besides making planning easier, there are also obvious cost benefits too:
“The cost of recovery for a parcel is great, but the cost of a missed pallet delivery is even greater, because they’re often done by HGV. There’s not many deliveries done in vans unless there’s a bad access area which has been pre-declared. Otherwise, you’d be doing pallet deliveries on anything between a 7.5-26-tonne lorry, or even a lorry hailing an urban trailer, depending on the route and the part of the country,” stressed Buchanan.
Local knowledge and industry expertise still plays a huge role
Although technology has come on leaps and bounds recently through the rapid development of AI among other things, Buchanan believes people are still central to a pallet network’s success.
For instance, the Pall-Ex Group CEO told Trans.INFO that the skills and knowledge of local hauliers and drivers is a vital asset that helps to address the practical challenges associated with B2C deliveries, including access restrictions and safety concerns.
“The average layperson doesn’t understand the size of a vehicle, the narrowness of a street and so on. That’s where we gain an advantage over some of the big corporations. The local delivery company may be the only one in the town. So, for example, there’s someone delivering to Dumfries that knows Dumfries. Then, when the driver is looking at that delivery route, they will know a van is required and can thereby take preventative action. This narrows down the number of instances that you have a problem with,” Buchanan told Trans.INFO.
Re-emphasising the importance of this, Buchanan added:
“AI doesn’t doesn’t solve all the problems. It does nonetheless enable good people who are focused, professional and determined to help solve more problems. It’s about how you harness everything together. The technology enables us to provide the best on-time-delivery stats in the industry, but without the people and the knowledge in management, It doesn’t in itself succeed. That’s where companies have previously failed to do it, because one on its own will not be enough,” said Buchanan.
An example of skilled professionals using tech to solve more problems comes in the shape of Pall-Ex’s Nexus Go app, which enables drivers to efficiently conduct risk assessments before a delivery takes place.
“Ultimately, all of the ETA timing is driven through the driver app and we launched a new driver app a year ago called Nexus Go. The app enables the driver at the point of delivery to do a dynamic risk assessment and thus avoid any inherently unsafe situations. The app prompts the driver before the delivery begins to consider the surroundings, the risks associated with them, and whether there’s a place where the pallet can be unloaded safely,” said the Pall-Ex Group CEO.
At the end of the day, however, the professionalism of the vehicle driver is still paramount to achieving successful deliveries, something that Buchanan considers to be under-appreciated:
“The ability to do all that is a skill in itself. People often don’t appreciate that it’s an area where drivers have to be diplomats. This is one of the many skills we ask them to have in an ever changing world,” emphasised the Pall-Ex Group CEO.