Are Your Pallets Carrying Too Much Cost?

Look at your end-to-end supply chain for cost-saving pallet solutions.


Brindley has been covering the pallet and packaging industry for years and acknowledges he and his staff are material agnostic. “We believe there are places where plastic, metal, and wood fit well. I would encourage companies to sit down with different pallet providers to see what they have to offer and to ask a few providers to do a pilot test to see what works best for their operation. Because there is no way of knowing how your supply chain will react to anything until you actually use it.”

Take into consideration what you want to spend and whether you want to use a rental pool or a pool offering a specialty product, Brindley says. “You may find that by conducting an analysis of your supply chain, you can cut costs. Generally, the most expensive part of a unit load is not the pallet—it is the packaging on the pallet. So you might find that you can cut your total cost by retooling some of your packaging. You really have to consider everything per product line and figure out the best way to save money.”

In choosing a pallet solution, the primary differentiation is not going to be about the material, notes Hachtman at IFCO. “It’s going to be about which type of program is best suited to your operation—and that can be the difference between purchasing pallets or leasing them.” Food manufacturers with products having a very short shelf life that are being shipped only to a handful of very large distributors might want to consider a leased platform, he adds.

While some people might still perceive pallets as commodities, the truth is that much engineering goes into the design of a quality-made pallet, says Hannum.

“So whether your operation requires wood or plastic, you have to understand what your needs are based not only on your supply chain dynamics today—but what your future needs will be. We encourage people to bring in their pallet supplier early in the decision-making process, because there are a lot of pressures being put on the pallet—such as having to function efficiently in high-speed, automated environments. We also advise that people understand the engineering specs of their pallets. While a pallet might be advertised as having a load rating of 2,800 pounds—which is the GMA spec—that pallet might function fine if it is sitting on the floor; but it might not function well while supporting the load in a free-span rack.”

Orbis examines the supply chains of potential customers, notes Abby Verbeten, product manager for the Oconomowoc, WI-based company.

“We look at their entire supply chain from inbound shipments, to work in progress, to storage, to outbound shipments. Then we consider what their needs are for retail and display purposes. Not every company will be able to utilize our products throughout every stage of their supply chain—but there are customers that can.”

Verbeten says that some customers use plastic pallets for storage. “This is a place where they can contain costs because the pallets will not be leaving the facility. I also see customers transferring from plastic pallets to wood for their outbound shipments.” She adds that Orbis offers credit on future pallet orders for the cost of regrinding pallets that are no longer usable. “This is another way we help our customers cut their costs.”

Harrison notes that Rehrig offers both plastic and wood pallets. “We feel it is our responsibility to help our customers contain and reduce their overall supply chain costs, so we recommend whatever we can quantify to be the best value for our customers.”

Some companies use both wood and plastic pallets within their operation. “We have customers who use plastic or aluminum pallets for their internal processing,” reports Hachtman at IFCO.

“In cases like these, they might have a captured pallet pool within the confines of their manufacturing process like a chicken processor moving bulk raw chicken on a plastic or aluminum pallet from processing to packaging,” he says. Once the chicken is packaged, the products might then go on a wood pallet to be shipped downstream to their customers. So there is a place for both materials, even within a particular company.”

The value of the goods you are shipping is yet another factor to consider when choosing the most cost-efficient pallet solution, notes Moore at iGPS.

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