Environmental Claims About Pallets More Than Material

Here’s a quiz. Customer A buys a pallet rated for 100 trips, but the pallet is lost after the fourth trip. It ends up at a pallet recycler, and it goes into a grinder or is shipped overseas as an export pallet, so it is no longer usable in local applications.

Company B buys a light-weight pallet classified for single use, but through proper handling and effective pallet management, it lasts for 12 trips before being sent to a recycler for processing.

Which pallet is most ‘environmentally friendly’?

While the examples above do not provide enough information to make that determination, the point is obvious. If pallet management and effective secondary markets created by the pallet recycling industry are not fully utilized, and pallets are lost or damaged prematurely, then we fail to reap the maximum environmental benefit of the wooden pallet. If they are effectively reused for multiple trips, then we will easily exceed those expectations.

The trade press has been flush with claims and counter-claims in recent months about the environmental superiority of one type of material over another (wood or plastic) and with respect to specific pallets or pooling systems. Pallet users can find themselves bewildered by competing claims, many of which are supported by independent third party analysis.

Pallet users need to realize that there is more to the question of environmental responsibility than whether a pallet is plastic or wood (or another material) or which pooling company owns it. If they ‘leak’ plastic pallets that wind up in a grinder or ship on rental pallets to distant customers and the pallets are irrevocably lost from the pool, then generalizations about the environmental benefits of a pallet or pallet program are really a moot point.

Some reusable applications have had problems. For example, the U.S. Postal Service has reported losing millions of plastic pallets from its pool, and the North American automotive industry spends about $750 million annually to replace reusable pallets and containers.

Even pallet pooling companies are not immune. Earlier this decade, CHEP lost track of 14 million pallets in Europe. Many other cases of large scale losses of pallets or containers are never disclosed.

Supplying pallets or pallet programs that provide superior cost effectiveness and environmental benefits involves more than the right material for the pallet or the right pallet pooling system. Solutions also should be grounded in proper handling and control of pallets and containers to maximize their useful life.

Frito Lay, the grocery manufacturer, finds best value by collapsing and reusing corrugated containers for shipping its products. With a light-weight product and company drivers performing delivery services, it is in a good position to make this approach work.

Generally, pallet users can minimize costs and maximize environmental benefits by properly managing pallets – maintaining better control, and working with distant or fragmented customers to ensure that pallets can be reused or recycled when they are emptied.

What should pallet users do? While environmental claims are about pallets are important, they only speak to generalities. Environmental best practices are much more than a product selection decision when it comes to pallets. It is no less than a product management decision. A so-called ‘green’ product without a ‘green’ attitude to daily operations is not going to win the day.

Pallet users can take the following key steps to improve management of reusable pallets and containers.

Create an executive imperative. Shout from the mountain top. I have found that it is easier to generate overall commitment for an environmental goal than for a cost reduction target, especially for a program that has clear management commitment behind it.

Cascade that desire into an action plan. Look at the dollars (and environment benefits) and act accordingly. In spite of the size of the investment, action plans can often be incomplete or superficial. Take the time to put a plan in place that is in proportion to the opportunity.

Communicate and train. Pallet management and control should not be a corporate secret. Companies often fail to recognize how many people in the chain of custody – from commodity buyers to store clerks – actually make decisions impacting pallets. As a result, many of these decision makers may not be properly trained.

Execute and track. It starts with people and tools. Like workplace safety programs, successful execution relies largely on appropriate front line behavior. This requires management resolve over time to build commitment and make it stick. Regular stock taking can identify losses earlier rather than later, when production comes to a stop because a business ran out of pallets. Tracking technology can make the job of pallet management easier; the options range from RFID to relatively inexpensive software like that from 2ic Pallets (www.2icsoftware.com).

Review and reinvigorate. Don’t wait for a flat line before you get out the paddles. Sometimes we don’t look past the initial pallet purchase, rather than recognizing it for what it is – just one step in a pallet management system. Periodic reviews can identify emerging problems or fresh opportunities and keep the system in better sync with overall logistics priorities.

For a lot of businesses, pallets are an expensive budget line item that is largely taken for granted as a cost of doing business. Ditto for environmental claims made by vendors and interest groups. In order to fully reap the environmental and financial benefits, it is important to invest in pallet management.

Over 25 years ago I had a boss who said that my approach to pallet management was like hitting a mosquito with a sledgehammer. However, when I cut our company’s spending by $600,000 per year by improved pallet management, he started helping me swing it.