Tuesday, January 20, 2015

As Pallet Delivery Service Closes a Lifeline Appears for Some Road Freight Operators

Courier and Mail Services Unaffected by UK Mail Abandonment
Shipping News Feature

UK – Following an announcement to shareholders by the board of the UK Mail Group last November that it was ‘taking steps’ to address its ailing pallet division, UK Pallets, an announcement last week that the smallest part of the group’s operations was to close came as no surprise. Most of UK Mail activities are based around road freight, and its parcels, mail and courier services are said to be unaffected by the closure, whilst another UK operator has offered a lifeline to some 73 hauliers affected and offered to take over existing customers where appropriate.

Hilary Devey, founder and CEO of the Pall-Ex network, announced just one day after news of the closure that her company’s advantage over ‘over multi-shareholder owned networks, which tend to be mired in bureaucracy’ meant Pall-Ex were able to rapidly step in to offer support, saying:

“[We] will be delighted to lend our assistance to those qualifying hauliers who we anticipate being able to flourish within Pall-Ex: demonstrating financial and operational integrity, as well as proving a cultural and ethical fit.”

UK Mail said it was expecting the closure to cost it £1 million, with an asset write-down of around £2 million for a business on which it took out a £7.3 million impairment charge just last year. The pallet service accounted for only around 5.5% of UK Mail’s overall business and employed around 120 staff. In what has turned out to be a ‘merry go round’ of business the closure of the City Link parcels and courier service has in fact meant that UK Mail has picked up some customers from the collapse whilst abandoning its own pallet service.