It's A Green World After All

Companies are learning that business processes and investments which are ecologically viable are also economically beneficial.

"Some companies are trying to reduce the amount of stretch-wrap they use, trying different kinds of strapping methods instead, for example. And vendors of the material are also pitching in, trying to find the lowest mil rating available (plastic density) that is sufficient to do the job well, in order to cut down on waste and improve resource utilization."

Probably the biggest area where food distributors can have an impact is in reuse of certain materials, in particular, pallets. In many warehouses, discarded wooden pallets represent their single largest category of waste.

The Pallet Conundrum: Wood Or Plastic
There are basically two approaches to controlling pallet waste: switch to sturdier materials like plastic, or find ways to make wooden pallets last longer. The average pallet manages about seven to 10 trips before it can no longer be reused, according to Curt Most, national pallet sales manager with ORBIS. "Then it's ground into mulch or if it's good enough quality scrap it might go into paper, but there's not a whole lot of value in broken wooden pallets."

Plastic pallets, on the other hand, are engineered to sustain anywhere from 150 to 200 trips on average, Most says.

"That's a lot of wood that doesn't have to be harvested and made into pallets and a lot fewer pallets on a lot fewer trucks that have to be shipped to a DC," he points out.

The environmental argument in favor of a pallet pooling system like CHEP's is similar, even if the mechanics are different.

"One of the intrinsic environmental benefits with a pallet pooling concept is that you generate less solid waste because you can reuse the pallets a greater number of times. There are a lot of pallets that were put into service in the 1990s, when CHEP was first introduced to the U.S., that are still in service," points out Per Ohstrom, CHEP director of marketing, CHEP pallets last longer because they are built stronger from the start and because the company, which rents them, has a keen proprietary interest in their maintenance.

In 2006 CHEP USA issued approximately 220 million pallets, Ohstrom notes. According to a company report comparing their use and longevity to standard "white wood" pallets, the use of CHEP wood prevented the generation of some 1.2 billion pounds of solid waste and 596 million pounds of greenhouse gases.

Which is better, pallet pooling or plastic? It depends on whom you ask and also on the specific application.

"With our block design, if any component breaks, we can just replace the broken section. When a plastic pallet breaks, you have to discard the whole thing," Ohstrom says.

The most frequent objection to plastic pallets is cost.

Most says this issue disappears once you break down the numbers to look at cost per trip.

"With an average wooden pallet, if you can get seven to 10 trips you're doing well, so you're looking at a cost of about 80 cents per trip. Average cost for a plastic pallet is around $60, which sounds like a lot. But getting anywhere from 150 to 200 trips from the pallet, your cost per trip is only about 30 cents," he points out.

Moreover, this cost advantage for plastic doesn't yet take into account all the factors that enter into true cost.

"The plastic in our pallets is completely recyclable. When any of our pallets breaks or is no longer usable, we'll buy it back. The average price paid is about 20 cents per pound or $10 per pallet. So now, taking that into consideration, you're looking at a true cost of only about 25 cents per trip." That still doesn't factor in the extra labor typically involved in inspecting, repairing and eventually scrapping wood pallets.

"While companies are definitely becoming more interested in the sustainability benefit of reusable plastic pallets, our strongest argument in their favor still comes down to economics," Most notes.

The main limitation with plastic pallets is that they don't generally make sense in most wholesale operations."When you spend $60 or more on a plastic pallet, you have to know you will get them back," Most acknowledges. "If you don't have 100 percent control over your pallets, it's hard to justify the investment."

However, for internal operations—moving product within a facility, or between plants and distribution centers operated by a single corporate entity, for example, plastic reusable pallets are an elegantly economical and environmentally-friendly solution.

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