Daily Pallet service is the logical next step
By Rene Falch Olesen, Chief Commercial Officer, DSV Group
With the logistics landscape constantly changing, businesses need to be continually thinking of ways to improve their services to customers. And one of the most important elements of this strategy is to actually listen to your customers.
Of course, all customers say they want greater reliability and faster transit times, preferably at cheaper rates. We understand that completely. Our customers are under increasing pressure from their own customers to cut costs and improve service.
But the trick is not to simply take these requests at face value. It is to look at our customers’ total business plans and help them achieve their goals – in a way that is realistic for both!
In talking to customers, we found that more of them wanted to match their dispatch schedules with their own internal processes and storage capacity. A recurring theme was to deliver smaller shipments, more frequently.
This is no surprise as the rise of internet shopping has made us all more impatient, with many expecting next-day deliveries as standard.
Shorter transit times ensure the goods are delivered more quickly, allowing faster invoicing and better cash flow, crucial to today’s business needs.
But the cost of meeting this expectation can be too expensive – dedicated delivery costs eat into profit margins. The alternative – holding significant amounts of stock in several locations – is also expensive, both in terms of warehouse costs and capital invested.
We realised that the traditional groupage model doesn’t meet all our customers’ needs anymore, and, like most freight forwarders, we at DSV have offered groupage services since inception, operating services between all major European destinations for many years.
But as manufactures and exporters have developed new markets throughout Europe, they have begun to ask for daily departures to more and more destinations. This is especially true for those companies seeking to test the market in a new country and needing to send smaller consignments to more destinations, more frequently.
We decided to look at alternatives that would both meet our customers’ needs at a cost they could afford, and harness the capabilities and experience of the DSV Road network across Europe.
Pallet networks have been around for some time but operate on the principle of using a plethora of local hauliers operating their own vehicles to and from the designated hub. Despite all the best efforts of the managing company, this can easily result in varying quality and reliability and, most importantly, lack of clear tracking and tracing.
DSV has traditionally operated as a company in which each country has some degree of autonomy in terms of how it runs its business. This has many benefits in that, for instance, it helps generate innovative ideas and products which then can be spread as best practice throughout the company.
However, it did make our decision to launch a European-wide Daily Pallet service a bit more of a challenge. Of course, the desire to retain and win customers will always be the dominant business philosophy, so each individual company was keen to contribute.
Our in-depth discussions within the company established that the dominant demand from many customers throughout Europe was for more frequent departures to a wider range of destinations.
We looked at a range of options that would allow us to provide that service and it became obvious that a pallet network was the solution. It would be hubbed via our upgraded distribution centre in Germany and we would invest heavily in developing our freight management software to allow full tracking and tracing from door to door.
We already had facilities in 32 countries with our own people and trucking networks so the backbone of the system already existed – it was ‘just’ a matter of bringing them altogether.
Of course, this has taken significant investment in management time, training, IT systems and internal communications to get it all up and running.
But it has all been worthwhile. Daily Pallet was launched in May and is proving an immediate success with both existing and new customers. The daily departures, assured delivery times, and full track-and-trace control has made it an attractive proposition.
We believe it is important to listen to customers before designing the products and services that help them meet their business goals. That way we all stay in business!