Material Handling: Pallet Update

Balancing Cost, Quality, Strength, Service


Wood, plastic or steel? Today’s food companies have a number of pallet choices.

Advancing technologies continue to move every industry toward ever-increasing optimizations in production, quality and cost efficiencies. Pallet providers are responding to these advances by rethinking how their products and services can help their customers meet the rigors of pallet passage throughout the food supply chain with cost-effective solutions.

Highly automated material handling equipment—such as automatic retrieval systems, robotics, and laser-guided driverless forklifts—subject today’s pallets to a more rigorous journey through the supply chain than ever before. Consequently, a gentle debate now exists in the pallet industry concerning the superiority of one material over another and whether wood, the leading pallet material for generations, should be replaced with plastic or steel.

But even plastic pallets do not escape the debate; critics cite them as being just as prone to the rigors of the supply chain. Of course, providers of a particular material have a vested interest in that one material.

We asked providers of wood, plastic and steel pallets to note a few top requirements their customers are seeking in pallet products and services. The consensus is that customers today want a whole lot more and they want it for less.

Quality and dimensional precision: Highly automated material handling equipment, designed to increase productivity, is putting pressure on shipping platforms for dimensional precision and a higher-quality platform, notes Derek Hannum, director of marketing for Orlando, FL-based CHEP USA. The company maintains a pool of 75 million predominately wood pallets in the U.S.; it also uses plastic and wood pallets throughout the world.

Steve Letnich at Worthington Steelpac Systems submits that the rigors of today’s supply chain undermine the consistent quality and dimensional precision of wood pallets. “We believe you will see a significant move from wood toward alternative materials in the next few years,” says Letnich, vice president of sales and marketing for the York, PA-based company. Letnich reports the company has 50,000 pallets in circulation throughout the U.S., and that the number is growing daily.

Service and management: For Yonkers, NY-based PECO Pallet Inc., it’s all about setting standards, says David Lee, CEO. “We see ourselves as professionals in setting standards we want to provide to our customers.”

The company maintains a national network of 120 sub-contracted third-party pallet recycler depots for its pool of 3.5 million wood pallets. These depots inspect, repair, and issue pallets according to PECO Pallet standards.

“We don’t put a limit on how many we will repair,” claims Lee. The company also maintains a service team to anticipate and resolve any customer needs quickly.

Another facet of service customers want is a closed-loop returnable supply, says Letnich at Worthington. The company’s galvanized steel pallets are the first of their kind on the market providing edge-rackable pallets exceeding GMA standards, adds Letnich.

Orlando, Florida-based iGPS Co. provides the first pallet rental service offering all-plastic pallets with embedded RFID tags, says Bob Moore, chairman and CEO, a former global chief executive for CHEP. The RFID tags are multi-use tags, explains Moore.

“There is a pallet serial number and other data that we use to track and trace these assets. Some of our customers use the RFID tags to put away and retrieve products from their racks with their automated retrieval systems,” says Moore. “So the RFID tags were designed to accommodate our needs to track and trace our assets as well as to accommodate our customers’ requirements to identify their SKUs to particular pallets.”

The pallets with their RFID tags and barcodes are also easy to trace if a food-safety problem or product recall arises, simplifying administration and accounting procedures, he adds.

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