Pleasing to the Pallet
The per-unit cost of plastic pallets is difficult for some shippers to swallow because there’s no guarantee pallets will be returned to their owners.
plastic pallet that may get lost in tran- sit, suggests Burke. “Customers using plastic pallets have come to us looking for heavy-duty oak pallets because they last longer. And some shippers value using low-density cottonwood or pine pallets for shipping because they weigh less,” he adds. SMIco is experiencing increasing demand for recycled pallets, which account for about 10 percent of its sales. This presents another economic alter- native for cost-conscious shippers. The nature of the materials han- dling industry creates a place for different types of pallets – injected molded, rotational molded, and wood. While plastic pallets or pallet pooling might be appropriate for one company, wooden pallets might be more suitable for another. “For companies moving products domestically without specialized equipment, that won’t be damaged easily, wood pallets have a reasonable life – three to four turns. That’s when it may make sense to go with wood,” acknowledges Kensill. Pallet Technology Evolves Increasing automation in the ware- house, however, may very well dictate the future evolution of pallet technol- ogy as automated storage, retrieval, and conveyance systems demand durable and precise equipment to carry their loads. As plastic pallet prices come down, pallet manufacturers will likely find more practical uses and demand for their products.
The strength of wood pallets can be questionable.
Another consideration in pallet selec- tion is recognizing integration issues that might arise among supply chain partners. For example, European pal- lets – which are different from U.S. standards–are increasingly pervasive in the global supply chain. These differ- ent pallet specifications create handling problems because they don’t fit conven- tional racks that are optimized for the Grocery Manufacturers Association’s (GMA) 48-inch x 40-inch pallet, the de- facto standard in the United States. “Euro pallets will fit in a rack inserted horizontally. However, in a conven- tional rack with 96-inch openings, only two Euro pallets fit. This wastes about 30 percent of the rack space,” Sisko acknowledges. For companies
using a mix of GMA and Euro pallets, he recommends racks with 144-inch openings that accommodate four Euro pallets or three GMA pallets, providing more efficient space utilization. Strategically, Kensill perceives the importance of pallet investment as a central element in today’s materials handling environment–and one that companies can ill afford to ignore. It is critical for businesses to plan out all the details–from the warehouse floor up–before they lay pencil to paper in designing and budgeting their ware- house systems. Otherwise, suggests Kensill, “it’s like buying a fancy race car and forgetting about the tires. The car is on your lot but you can’t drive it.” ■
132 Inbound Logistics • July 2007
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