Hilary Devey: a long haul that paid off nicely

As a single mother, millionaire pallet-distribution queen Hilary Devey knew she couldn't afford to fail when she set up her business 13 years ago.

Most people who fail in business do so because they're not hungry enough, says Hilary Devey, 51. "But I had a seven-year-old son to support," says the single mother, who founded £100m-a-year pallet distributor Pall-Ex. "I just knew I couldn't fail. I didn't even give it a thought." The daughter of a Bolton publican, Devey had spent 20 years in the logistics and distribution business when she hit upon a golden opportunity in south Wales in 1995. Working as a consultant, she overheard a client tell a customer that it would take 12 days to deliver three pallets of electrical goods to Carlisle. "From my background in parcels, that sounded way off the wall. But it turned out he couldn't just run the vehicle up to Carlisle with three pallets" as it would cost too much. "He'd have to wait until he could fill the entire vehicle, which was totally inefficient."

Rather than run pallets all the way across Britain, Devey's idea was to open a central hub. Hauliers could offload deliveries there, in a hub-and-spoke model pioneered by Fed-ex. The hauliers would then form a 'membership', similar to a franchise. Pallets would be distributed at the warehouse and put on to waiting vehicles from other parts of the country, covering their respective postcodes. "That meant hauliers could sell their wares at a fixed cost, which is probably the first time that they were able to do so." In exchange, Devey would charge £2.85 for every pallet moved.


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But with the bank refusing to back her, Devey had to sell her house and car, raising £112,000 to start the business in 1996. She and her son moved into a rented flat in Southend with "under-floor heating from the fish fryers" in the chip shop below. Now the owner of a second-hand Ford Scorpio, Devey drove 2,000 miles a week, convincing hauliers around Britain of her business plan's merits. "I met a lot of misogynists along the way, asking questions like 'Can you drive a truck love?'" But she was "100% focused".

By November, she had 30 firms on board, and on 29 November 1996, Pall-Ex was launched from a disused RAF hangar in Leicestershire. "It had no running water or electricity, so I had to put generators and chemical loos in." Within a month she'd signed up 40 member companies, becoming cash-rich quickly. "We signed up all the hauliers to seven-day terms. So come what may, on a Monday those invoices went back on those trucks and the following Monday, the cash came back." But after paying all the drivers and office staff that December, she had "about 11p left. So I called up my mother and asked her to bring the Christmas dinner round. And then I said, by the way, would you like to buy your grandson a bike?"

Within 12 months, Pall-Ex moved to the old British Gypsum site in Nottingham, breaking even on turnover of £120,000. The business grew fast. In 1999 it handled its millionth pallet; by 2002 it had 80 member depots, sending three million pallets through her hub each day. This year, it should do £110m turnover, despite the slowdown, and Devey is optimistic. "When I started, Pall-Ex was my entire life... and I'm no less focused today. We'll survive this recession and come out the stronger for it."

Jody Clarke

Jody studied at the University of Limerick and she has been a senior writer for MoneyWeek for more than 15 years. Jody is experienced in interviewing, for example in her time she has dug into the lives of an ex-M15 agent and quirky business owners who have made millions. Jody’s other areas of expertise include advice on funds, stocks and house prices.