Elaine Watson
Factory gate pricing could sound the death knell for the traditional one for one' exchange model for pallet hire in the UK, according to new kid on the block LPR.
Exactly a year after entering the UK, the French company controls more than 1% of the pallet hire market, a figure set to grow because its one way trip' model was the only one compatible with factory gate pricing, claimed deputy general manager Olivier Pages.
Unlike rival Chep, which asks suppliers to deliver goods on pallets to retailers' distribution centres and then return to their factories with an equal number of empty pallets, LPR takes the responsibility for collecting used pallets from RDCs.
Under factory gate pricing, retailers collect goods from several suppliers and their trucks do not go straight back to the same factories a system "completely incompatible" with the one for one exchange model, claimed Pages.
One for one also made it difficult for suppliers to quantify transportation costs per trip critical for those trying to establish what ex-factory gate prices should be, he claimed.
"Our clients pay a fixed price per trip, whereas there is no transparency in the one for one model. Our strategy is to become a real alternative to Chep in this country. We are aiming for a 20%-25% market share in the next four to five years, which seems reasonable considering it took us one year in Portugal, three years in Spain and five years in France."
One manufacturer said Chep was waking up to the threat of LPR in the UK, and had lowered its prices in a bid to hold onto business. "Customers are screaming out for an alternative to Chep," he added. "Chep's exchange model is very complicated once you take into account the issue fees, hire and de-hiring arrangements and transfer costs and so on."
However, a Chep spokeswoman said Chep was starting to offer the one way trip model in the UK. "We partner with our customers and they choose the service that best matches their logistics needs and supply chain practices."
{{NEWS }}
Factory gate pricing could sound the death knell for the traditional one for one' exchange model for pallet hire in the UK, according to new kid on the block LPR.
Exactly a year after entering the UK, the French company controls more than 1% of the pallet hire market, a figure set to grow because its one way trip' model was the only one compatible with factory gate pricing, claimed deputy general manager Olivier Pages.
Unlike rival Chep, which asks suppliers to deliver goods on pallets to retailers' distribution centres and then return to their factories with an equal number of empty pallets, LPR takes the responsibility for collecting used pallets from RDCs.
Under factory gate pricing, retailers collect goods from several suppliers and their trucks do not go straight back to the same factories a system "completely incompatible" with the one for one exchange model, claimed Pages.
One for one also made it difficult for suppliers to quantify transportation costs per trip critical for those trying to establish what ex-factory gate prices should be, he claimed.
"Our clients pay a fixed price per trip, whereas there is no transparency in the one for one model. Our strategy is to become a real alternative to Chep in this country. We are aiming for a 20%-25% market share in the next four to five years, which seems reasonable considering it took us one year in Portugal, three years in Spain and five years in France."
One manufacturer said Chep was waking up to the threat of LPR in the UK, and had lowered its prices in a bid to hold onto business. "Customers are screaming out for an alternative to Chep," he added. "Chep's exchange model is very complicated once you take into account the issue fees, hire and de-hiring arrangements and transfer costs and so on."
However, a Chep spokeswoman said Chep was starting to offer the one way trip model in the UK. "We partner with our customers and they choose the service that best matches their logistics needs and supply chain practices."
{{NEWS }}
No comments yet