Fortec's forte
June 1st 2006

Pallet distribution network, Fortec, has recently celebrated ten years of operation. Charlotte Stonestreet visited the company to find out how it intends to stay successful and maintain growth in this fiercely competitive market

If there's one area of logistics and distribution that the British excel in, it has to be pallet distribution networks.

Essentially, these involve numbers of hauliers working together, collecting pallet loads from their local areas, delivering to a centralised hub and collecting pallets for onward delivery in their local area that have been dropped off at the hub by other hauliers. This helps to reduce the problem of empty vehicles on return journeys.

Although undoubtedly a huge success, many would look at this almost exclusively British way of working and think the marketplace had just about reached saturation. Not so those at Fortec Pallet Distribution Network. Launched in 1996 under the Cavewood banner, today Fortec is part of the French logistics giant Geodis and last year announced record profits - something senior management at the company anticipate will be repeated in 2006.

"I can see huge opportunities for Fortec," says recently appointed regional business relationship manager. Mick Dewhurst. "We already have a good name and a reputation for providing a high quality service. We work really hard to ensure that all the network's licensees can deliver to a very high standard - after all, you are only ever a strong as your weakest link."

Effective mix

At present the network has 62 licensees (member companies), with plans to increase this to 65 by the end of the year.

Although at first the network was purely haulage-based, according to Dewhurst the dynamic has evolved and the organisation now includes companies from the parcel industry, providing an effective mix.

"When we bring new licensees onboard we look for companies and individuals that will fit in well with the Fortec culture," says Dewhurst. "We are participative, not dictatorial, and work together in the decision process, drawing on the strengths of our licensees."

As well as the obvious side of the business, such as operating the hub in Rugby, Fortec offers its licensees a whole range of support and assistance should it be required, everything from the commercial side of things to organisational issues.

"Of course Fortec is here to be profitable," says Dewhurst, "But it is also very important that our licensees make a decent living too."

One of Fortec's greatest strengths is the lines of communications it maintains between itself and its licensees. Not only does this encourage the development of new services, it enables all areas of the network to be finely tuned, something which can only be of benefit to the end customer. Part of Dewhurst's role as business relationship manager is to provide a formal interface between the hub and the licensees.

Lean operation

The end customer also benefits from the 'lean' operation of the Fortec hub itself. All pallets are scanned into and out of the hub.

This allows all pallets to be accurately tracked, increasing security as Fortec knows exactly what is meant to be in the hub at any one time. Any discrepancies can be easily picked up on and mis-routed pallets are minimised, as is damage.

As a result of growth (throughput has increased from 600 pallets per night in 2002 to 2300 pallets per night today), the Fortec hub is soon to be extended, which will allow more more vehicles to be processed at the same time. This will also help accommodate the up to 19% volume growth projected by Fortec for 2006.

In addition to organic growth and a 50,000 pallets per year boost from parent company Geodis' Magna Park facility, Fortec is also looking to gain from other parts of the distribution industry.

"Although it might look as thought eh pallet network market is saturated I think that there are still new potential areas for us to grow the business, says Dewhurst.

"For example, where single pallets and multiple boxes that could be put on to pallets is concerned I think there is a definite opportunity to be had.

"At the moment companies with the odd pallet tend to stick with the distribution method they use for single items, without realising that we can provide a cheaper and easier way of doing it. We just need to get the message out and start educating people about the services we can provide."

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