Marc Groenewoud: With a market share of 3 to 4 percent, we are the market leader in an atomized market. In such a market, however, the individual market share is rather unimportant. Our goal is to double our business in the next five years and further expand our market leadership. The profitability of a pooler depends heavily on the strength of its network. The denser its network of customers and the more balanced the individual regional shifts in pallets are, the more efficient and therefore more profitable a pooler will be.

mfl: What advantage do you hope to gain from the internationality with which PAKi Logistics is positioned?

Groenewoud: PAKi Logistics is the only pooler for EPAL Euro pallets with a dense Europe-wide network. With 280 depots and over 10,000 loading stations, we can make pallets available or dispose of them at any time and at any location in Europe. For many internationally operating retailers, freight forwarders and manufacturers in particular, this is the decisive reason for working with PAKi. When it comes to internationalization, we generally follow the lead of our major customers. For example, if a large international retailer expands to Lithuania, we first ensure the supply and disposal for this major customer. We then acquire further customers in the country of expansion, which ideally have opposing flows of goods.

mfl: PAKi is growing in various markets, including Eastern Europe - what dampener do you expect from the war in Ukraine?

Groenewoud: Last year, Ukraine produced 2.7 million cubic meters of timber and 15 million pallets, which were mainly exported to Western Europe. In addition, Russia and Belarus are no longer allowed to supply timber to the EU due to the EU sanctions imposed. The rise in energy costs due to the war is also having a major impact on the pallet market. In addition to transportation costs, the costs for heat treatment of pallets in accordance with the ISPM 15 standard will increase in particular. As a result, I expect a lower availability of pallets and rising prices, especially for new pallets.

mfl: Is PAKi already active on the Russian market?

Groenewoud: No, PAKi does not serve any customers in Russia and does not purchase any pallets from there.

mfl: PAKi has caused a stir with the eVoucher and the Drop & Drive app - what does the further roadmap look like in terms of digitalization? What's next?

Groenewoud: The PAKi eVoucher in particular represents a quantum leap in the digitalization of pallet exchange. We now process almost 10 million pallet movements via eVouchers. Three more retailers are currently introducing the PAKi eVoucher as their preferred medium. The classic pallet bill is becoming increasingly obsolete. In our roadmap, we are focusing on the further development of our portal with additional functions, better UX and guaranteed 24/7 availability. Our goal is to process over 90% of all pallet movements digitally via eVoucher and portal by 2024.

mfl: You are planning to use more AI in the company. That's not easy, where are you going to get the development resources from or how are you going to build them up?

Groenewoud: We have a very well-equipped IT department with excellent programmers. We create the code for most apps and programs ourselves. We also seek external support for individual projects. I see the greatest opportunity for AI in optimizing the matching process between pallet releases and new orders. Today, this complex process is largely done manually and on a daily basis. We are currently developing AI software that optimizes the matching process with the help of self-learning algorithms and enables 30/60/90-day planning in addition to daily planning. For our international network in particular, this software will lead to a major efficiency gain in the cross-border planning of pallets.

mfl: In conclusion, PAKi says it is doing a lot to make the company and the work of its customers even more sustainable - what does that look like in concrete terms, and what will follow in the coming months to achieve this goal even more?

Groenewoud: First of all, I would like to make it clear that the pooling principle is fundamentally sustainable. The use of exchangeable load carriers optimizes logistics processes along the entire supply chain and thus leads to greater sustainability. In concrete terms, dispensing with the physical 1-to-1 exchange of pallets means that empty truck runs are avoided and the full load capacity of a truck is available for follow-up orders. At PAKi and our Faber Group, however, we go a significant step further. As part of our corporate social responsibility strategy, we have decided to only use sustainably produced wood within the Group. In addition, we plant five new trees for every one we cut down. Last year, we received the ecovadis Platinum Sustainability Award for this. This means that we are among the top 1% of companies in our industry in terms of sustainability.

Martin Schrüfer, editor-in-chief of materialfluss, spoke to Marc Groenewoud.

The article appeared in materialfluss 4/22.