Each year, roughly 80 million wood pallets are sold for export in the United States. Now a little black and white beetle may single-handedly spark a worldwide pallet revolution that could boost the popularity of plastics.
So why all the fuss over one little insect? That beetle, the Asian longhorn beetle—along with at least 40 other species of wood-boring insects—posts a huge environmental threat. The insect lays eggs in holes that it bores in tree trunks. When those eggs hatch, the larvae feed on the wood and can eventually kill the tree.
Those insects had not existed in the United States until the mid-1990s, when they began showing up in New York and Chicago. Thousands of trees had to be destroyed as a result.
The insects are believed to have traveled to the United States inside solid wood packing material from China, and have since been intercepted at ports and found in warehouses throughout the United States and other countries.
To prevent infestations elsewhere, more than 130 countries around the world have adopted the International Plant Protection Convention (IPPC) standards requiring that all wood pallets presented for import bear certification that they were either heat treated to a core temperature of 132 degrees for at least 30 minutes or fumigated with methyl bromide to prevent infestation. Pallets that have not been treated or do not carry the proper certification markings can be embargoed, turned away or destroyed—along with their contents—at the port of entry. Other options include unloading and crossdocking the product at the port of entry while the pallet is treated on site; an act that will carry high fees.
The regulations, called the International Standards for Phytosanitary Measures (or ISPM-15) also affect the many cross-border shipments of food and related items between the United States, Mexico and Canada, as all three countries adopted the standards in September. Many of the countries to which U.S. companies ship the $51.3 billion in food exports a year, and from which U.S. retailers receive the $48.7 billion in food imports a year, are also among those that have adopted the standards (See the list on page 36).
In response to those standards, a number of pallet manufacturers have just started to ramp up production and marketing of a whole new class of plastic export pallets that are exempt from ISPM-15. Even Orlando-based CHEP, whose reputation is based on its signature blue wood pallets, offers a line if plastic export pallets. “We are ready to go to market, and once demand is there, we can ramp up,” says Per Ohstrom, the company’s director of marketing. “Fumigation requirements might increase the demand for plastic.”
These new plastic pallet types are pricing out at half the cost of traditional plastic pallets, causing international shippers to at least give plastics a second look.
Prices for plastic export pallets start at $12. They are more expensive than wood pallets, even those that have been treated, but, for shippers who cannot afford to have product delayed at borders or in port, there is a lot more at stake than money.
“Plastic costs a little bit more [than wood], but you can sleep at night because you know your products are going through,” says Curt Most, national pallet sales manager at Orbis Corp., Oconomowoc, WI, which offers three plastic export pallet lines.
“If there was a way to guarantee that a shipment on wood pallets would get through, there’s no reason to pay $10 more for a plastic export pallet,” admits Jerry Koefelda, director of new business development at Rehrig Pacific, based in Los Angeles. “But, there are so many different regulations for each country and even different ports within those countries, and different levels of documentation that you have to have.”
Adds J.D. Coult, business development manager at Rehrig, “With just one hiccup because of a wood pallet, plastic pallets will more than have paid for themselves.”