By Carol Radice
Published: April 1, 2010
While the materials differ— wood, plastic, steel and various combinations—the pallet industry appears to be committed to safety and sustainability.
As grocers and CPG firms continue to squeeze money from their transportation budgets by building more-efficient truckloads and delivery route and streamlining distribution centers, experts say some companies are overlooking a crucial element that could improve operations—pallets.
Options include wood, plastic and steel, as well pallets that combine these materials. While each material has its own set of qualities and features, as well as issues and challenges, one thing remains clear—from an environmental standpoint, the pallet industry has set its sights on producing the most sustainable transportation methods possible.
Before making any decisions about pallets, experts say that companies should fully understand their supply chain costs and the impact that each element has on overall expenses. “Whether you are evaluating wood, metal, plastic or any other type of pallet material, ultimately you have to ask if it will do the job in the most cost-effective manner possible,” says Jerry Welcome, president of the Arlington, Va.-based Reusable Packaging Association. “The bottom line has to be safety and performance.”
Officials at the Reusable Packaging Association say that in almost every instance, a reusable pallet program meets all of these criteria. “Reusable pallets have to be strong, kept in good repair and must be maintained in a sanitary fashion to ensure their long use,” says Welcome.
In broad scale use since World War II, wood remains the material of choice for most grocery companies. “There are more than 1.2 billion wood pallets in service in the U.S. each day,” says Bruce Scholnick, president of the National Wooden Pallet and Container Association, based in Alexandria, Va. “Globally, wood pallets comprise 93% of the entire pallet market. Pallets are made from derivative lumber that is strong and durable, but has low cosmetic value. Odds are it would likely be thrown away.”
Scholnick adds that the waste produced from making pallets and the material from pallets no longer able to be repaired is often turned into products such as playground mulch and wood stove pellets.
While the material has remained the same, there have been changes in the construction of wood pallets, according to Scholnick. He says the trend is moving away from stringer pallets toward block-type pallets. “The different design of the block pallet makes it easier to maneuver on a forklift and more attractive in retail settings,” he says. “Today, block pallets comprise about 45% of pallets and going forward that figure is expected to increase.”
Scholnick says the industry stands by its safety record. “When all is said and done, years from now the grocery industry will still be using wood as their primary choice for pallets,” says Scholnick.
Mike Hachtman, senior vice president of sales and business development for Houston-based IFCO Systems, says wood pallets are cost-effective and versatile.
He says that while prices are up a bit they are nowhere near historic highs. “There have been some reports that cost is pushing companies to consider outsourcing wood from other countries where prices are cheaper but standards might not be the same as the U.S.,” he says. “However, I’m just not seeing this done. The overwhelming majority of companies producing pallets in this country are utilizing North American lumber sources.”
MIXING AND MATCHING
Derek Hannum, director of marketing for CHEP USA, based in Orlando, Fla., says that while the company is best-known for its wood pallets in the U.S., globally it has pallets made from a variety of materials including plastic, as well a merchandising pallet made from a combination of wood, plastic and steel. “We consider ourselves material agnostic,” says Hannum. “Based on our global experience, we think we have a fair amount of understanding of the different pallet materials available, their limitations and their strengths. We don’t really have an overall preference and prefer to make material and design choices based on the particular need and the availability of the materials in the market.”
He points to China as an example. “In China, we launched the first pooled plastic pallet in the world that is repairable,” he says. “They requested plastic from the beginning, in part because the availability of timber is limited in their country and importing it would have been cost-prohibitive.”
Hannum says that in the U.S., wood is CHEP’s predominant material choice. “Wood is 100% renewable and recyclable,” he says. “We are very diligent and active in only supporting those timber producers that practice managed forestry. These forests actually have a net-positive growth profile, meaning more trees are planted than are harvested. And because of the way it is managed, forest land acreage in the U.S. has remained largely unchanged for 100 years, despite the fact that the population and consumption has increased four fold.”
That said, Hannum adds that CHEP does source some of its raw material from other countries. “Our quality control process is very strict. We employ a third party to audit the material on a regular basis and to analyze samples of the timber to ensure there are no unintentional chemicals in the wood.”
He says that CHEP sanitizes its pallets with heat rather than chemicals.
“We feel this approach, while more costly, is better for the environment,” he says. “We are very proud of the record wood pallets have and its 50-year history of being a safe method to transport products.”
While plastic pallets comprise about 15% of the total pallets in circulation today, company officials at Orlando, Fla.-based pallet provider iGPS expect the number of plastic pallets to represent between 40% to 50% of the market. “We buy $1.2 million of pallets every day, seven days a week,” says Bob Moore, CEO and chairman of iGPS. “We’re building the fleet as quickly as we can to keep up with the demand, spending about $75 million a year in this endeavor.”
According to Moore, plastic pallets offer a wide range of cost and environmentally sustainable features. “Plastic pallets are lighter, stronger, safer and greener than conventional wood pallets,” says Moore. “iGPS’s plastic pallets are 100% recyclable which means they don’t end up in a landfill when destroyed.” Moore says if a pallet is damaged, the material is used to make new pallets.
According to Moore, plastic pallets help preserve fossil fuels as well. “Given that our plastic pallets are 30% lighter than their wood counterparts, they are easier to handle, lower the likelihood of injury and offer tremendous savings in transport costs,” he says. “For example, one our large consumer packaged goods customers has been able to eliminate 1,800 trailer load trips a year because our lighter weight plastic pallets allow them to get more product onto the trailers.”
He adds that plastic pallets have a long lifecycle. “Each pallet is warranteed to last 12 years, but our research shows they have the ability to last as long as 20 years,” he says. “The inclusion of an RFID tag makes these pallets traceable and trackable.”
Another plastic pallet company, Pallet Technologies, based in Barrington, Ill., has taken the concept of sustainability one step further with the introduction of a biocomposite pallet made with a combination of 100% recycled plastic resin and corn-based polymer.
According to company officials, when a pallet reaches the end of its lifecycle, it is recycled into new pallets. Other advantages of composites, note company officials, include four-way entry, lightweight, high strength and stiffness, corrosion resistance, easily sanitized, design flexibility, durability and excellent insulation capabilities.
“We felt there was a better option possible than what existed in terms of producing a fully rackable pallet that was long lasting and better for the environment,” says Jeff Hunter, co-owner of Pallet Technologies.
After much research, the company opted to use recycled plastic sourced from places such as the consumer and automotive industries and a compostable byproduct of the ethanol manufacturing process. “Essentially, we’ve been able to incorporate two materials into our pallets that would have otherwise been thrown away.”
Under the current method of production the amount of biocomposite material in each pallet is about 10% to 20% with the remainder recycled plastic, but Hunter says his company is actively investigating new technologies that would allow them to increase the amount bio material within the pallet to as much as 80%.
One thing that will remain the same as time moves forward, according to Welcome of the Reusable Packaging Association, is that businesses need to find the best balance of procurement cost, performance in the supply chain, safety, material handling, warehouse efficiency, transportation efficiency, product protection and environmental sustainability.
“There are many different types of shipping platforms in use today, each has a very specific application depending on the product being shipped. No matter what material type is selected, reusable transportation pallet solutions reduce overall waste,” he says.
“Companies will always need some type of a platform to ship their product safely from Point A to Point B. We believe that a reusable pallet is the best possible solution for our nation’s supply chain.”
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