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Wood pallets are highly sustainable, in part because of their high rate of recyclability. According to the latest research available, 508 million wood pallets are produced annually in the U.S. each year, while only 25 million of them end up in landfills, down from 178.5 million in 1998.

Old wood pallet material is utilized in many creative ways. With a laudable recycling rate of 95%, most end-of-life wood pallets are processed to create other products. Recovered lumber is used for pallet repair or re-manufactured pallet components as well as other purposes, while unusable lumber is reduced to fiber for many applications.

This approach improves the economics as well as the sustainability of pallet recycling. Recovered wood is much less expensive than virgin material, and as such, it provides cost advantages versus new components both for repair as well as pallet re-manufacturing.

There are also sustainability advantages associated with this practice, known as “cascading use”. Cascading use refers to the method of recovering material for the next most valuable alternative – such as pallet boards, and eventually, fiber. This approach reduces the carbon footprint impact at each stage of use thanks to recycled material availability, which is much less carbon-intensive to produce than virgin fiber alternatives.

Here is what happens to end-of-life pallets:

Recovered pallet repair components

When pallets are too severely damaged to repair, or they are not a popular size, pallet recyclers typically dismantle them using a bandsaw dismantler. Broken components are sent to the grinder, while pallet recyclers use intact pallet boards or stringers to repair other pallets.

Recovered components used to build combo or re-manufactured pallets

Recyclers also use intact recovered pallet components in the assembly of combo or re-manufactured pallets. The variability of sizing in recovered pallet boards and stringers makes them more challenging to work with than new material. Increasingly, the pallet industry is turning to automated nailing systems as well as lumber sizing and sorting machinery to enhance the efficiency of re-manufacturing.

Recovered solid wood used for upcycling crafts or architectural projects

Old pallets have become extremely popular for upcycling arts and crafts projects, as well as pallet art. Architectural trends such as industrial chic embrace the look of weathered pallet wood material. As a result, some pallet recyclers are also now selling recovered pallet lumber to home builders for installations such as feature walls.

Fiber used to manufacture new products

Where nearby manufacturing plants exist, fiber can be utilized in wood composite products such as particleboard and fiberboard sheets for construction, and as filler in absorbent socks for spill containment. Wood fiber is also used in material handling products such as wood composite pallet blocks, molded wood plugs and pallets.

Fiber for mulch, bedding, and soil amendments

Popular applications for recycled fiber including colored landscaping mulch as well as animal bedding and soil amendments. A soil amendment is when wood fiber is added to soil to improve its water retention, permeability, water infiltration, drainage, and aeration. The goal of a soil amendment is to create a better environment for roots to take hold within the soil.

Fiber for biomass

Wood fiber is used as boiler fuel as well as in other applications to generate energy. Aside from bulk fiber, wood fiber can also be compressed or densified into more compact products such as pellets, cubes, briquettes or fire-logs. Densified products have a higher value and are more economical to ship a greater distance.

Fiber for emerging applications

Ongoing research continues to uncover new applications for wood fiber, while other markets are anticipated to grow. Fiber applications expected to play a larger role in the future include biochar, a soil amendment utilizing charcoal, and cross-laminated timber (CLT). CLT involves the usage of smaller pieces of wood to manufacture larger panels.

The discussion above illustrates how pallet recycling follows the cascading use principle, utilizing material for its next most valuable use, whether as pallet boards, feature walls, or several fiber products. Such an approach optimizes the economic value of wood while enhancing its sustainability story.

As supply chain decision-makers urgently turn their focus toward sustainability, they are looking at opportunities to reduce CO2 emissions through initiatives such as renewable energy, transportation optimization, IoT (internet of Things), and more. But have you considered how wood pallet and packaging recycling can make a difference for your sustainability aspirations?

The funny thing about pallets, like other things in life, is that if you aren’t aware of them, they are easy to overlook. In the United States, there are 2 billion of them hiding in plain sight. If we assume 50 lbs of wood per pallet, that amount translates into 100 billion pounds of wood, which sequesters roughly 45 to 50 billion pounds of carbon. We will return to the CO2 reduction benefits of wood pallet and container reuse and recycling in the next post.

Once people become aware of pallets, however, some folks are surprised to realize that pallets are on the job almost everywhere in supply chains from inbound material at the production plant to supporting unit loads arriving at the retail outlet.

As the National Wood Pallet & Container Association states, “Pallets Move the World®”. According to one report, around 94% of industrial and consumer goods in the United States travel on a pallet at some point in their supply chain journey from producer to distribution location to end customer.

Wood Packaging in the Supply Chain

The MH1-2016 standard defines the pallet as a “portable, horizontal, rigid, composite platform used as (a) base for assembling, storing, stacking, handling and transporting goods as a unit load; often equipped with (a) superstructure.” When products are stacked on top of a pallet, the combination of goods and a pallet is known as a unit load.

The mechanized handling of materials in unit loads offers many benefits versus the manual handling of goods. This practice helps protect sensitive products from damage associated with “touch labor” or manually repositioning each box, for example. The pallet also protects products during interaction with material handling equipment such as forklifts, conveyors, pallet storage racks and automated storage and retrieval systems. Palletized unit loads can be stored more efficiently than unpalletized goods in most storage systems or through the stacking of unit loads. Palletization also dramatically increases the speed of loading and unloading versus floor loaded or unpalletized goods, and through the avoidance of manual handling, improves workplace safety.

Pallets or wood packaging may be used for a single supply chain link or to move goods through multiple links. For example, plywood orchard bins move fresh tree fruit to the packing shed where it is packed and palletized onto a wood pallet. The bin is reused in the orchard, while the pallet is employed for delivery of packaged fruit to a grocery distribution center, and then perhaps as the base for a full unit load or a mixed pallet load assembled for delivery to the retail outlet. In a mainframe computer supply chain, on the other hand, components may arrive palletized, with the sensitive finished product then shipped in a custom wood container to the customer location.

In part 2, we will take a look at the life cycle and recycling of wood packaging and the positive impact that recycling has on carbon emissions.

Sustainability for Corporate Leaders

The buck stops at the top when it comes to corporate leadership and environmental responsibility. Sustainability has become a core element of corporate strategy, and the creation of effective policies and programs plays a crucial role in supporting it. From the time the term was coined over 25 years ago, the Triple Bottom Line of Planet (environmental performance), People (social performance) and Profit (economic performance) has increasingly found its way into the lexicon of leadership.

Not that many years ago, recycling and zero waste initiatives were viewed by executives as convenient proxies for sustainability. Having an active recycling program was offered as proof of a company’s commitment to the environment. Now, however, companies are grappling with a broader view of sustainability that also focuses on carbon footprint, water conservation, plastic pollution, and other environmental priorities.

Business leaders must also be mindful of greenwashing claims and the reputational damage it can cause, as well as address the challenges of achieving high recycling rates in increasingly complex supply chains. It is well worth the effort, however. An emphasis on zero waste and sustainability can help deliver positive economic outcomes.

Creating Recycling Policies and Programs

Recycling policy, like other corporate policies, provides guidance, consistency, accountability, and clarity on how an organization operates. While policy speaks to guiding principles, programs are interventions designed to help achieve policy goals. For instance, a company may have a zero-waste policy and institute programs to support it such as facility recycling or composting initiatives.

In Sony’s recycling policy, for example, the company states that it “subscribes to the principle of individual producer responsibility (IPR), that is, the idea that a producer bears responsibility for its products over their entire life cycle.” In order to meet this commitment, the company is “focused on recycling-oriented product design, collection and recycling used products, and building global recycling systems that suit the needs of individual countries and regions.”

The development of a recycling program typically stems from the creation of a policy, followed by nominating a project manager and assembling a team. One of the early steps in the process is to conduct a detailed waste audit to clarify the types and volumes of materials involved. From there, a recycling plan can be created. After launching the program, it should be monitored to measure its success in diverting materials from the trash. And by celebrating the program’s accomplishments, the company can help build employee engagement and reinforce behaviors that support the recycling effort. Recycling@Work offers a 10-step action plan for implementing a workplace recycling program.

Greenwashing

The term “greenwashing” refers to the practice of making unsubstantiated or misleading environmental claims by a company about its products, services, or operations. Another definition refers to it as a situation when a company invests more in marketing itself as environmentally friendly than on minimizing its environmental impact. Customers and employees alike are becoming increasingly sensitive to greenwashing. It can damage brands and employee engagement. It is also against the law.

In 2019, for instance, Miami Beach-based retailer Truly Organic Inc. (Truly Organic) and its founder and CEO were ordered to pay $1.76 million to settle a Federal Trade Commission complaint alleging that their nationally marketed bath and beauty products are neither “100% organic” nor “certified organic” by the U.S. Department of Agriculture (USDA). The company advertised its products as vegan, even though certain products contain non-vegan ingredients like honey and lactose, according to the complaint.

Organizations can guard against greenwashing claims by taking safeguards such as the following:

1. Avoid using fuzzy or general claims such as natural, eco-friendly, sustainable or planet-safe
2. When using more specific green terminology, understand the meaning and ensure that you use the terms accurately.
3. Make sure that claims are evidence-based, and that you have the data to back them up.
4. Do not make claims about environmental improvements your company has made if they were required to achieve regulatory compliance.
5. Transparency matters. Be honest about where your company is in its sustainability journey. Don’t lie by omission, for example, if your efforts to be more green pale in comparison to your overall footprint.
6. Do not tout your sustainability superiority if you have suppliers or customers who have a very poor sustainability record.

Recycling in the supply chain

Corporate recycling programs that concentrate on a facility approach can successfully divert recyclable materials but find themselves hard-pressed to address the challenges of nonrecyclable or difficult-to-recycle materials. Companies are coming to recognize that in order to achieve zero waste, a supply chain approach to recycling may be required. Through aligning procurement with the recycling initiative, companies can make more powerful change. They can leverage their buying power to request packaging that is easily recyclable, for example, as well as packaging that is made from recycled material. Having a corporate pallet policy and working with suppliers, for instance, can help companies avoid accumulating and dealing with broken or odd-sized pallets.

Recycling is also an important consideration from the customer perspective. As in the case of Sony, mentioned above, companies are increasingly mindful of the recycling implications of their packaging and products for customers. Ease of recycling is part of overall customer engagement with a product and can no longer be ignored. According to the 2019 EcoFocus Trend Survey, 71% of consumers overall, and 76% of Millennials, said they feel positive towards companies that use recyclable packaging.

The Positive Economic Impact

A Triple Bottom Line approach is the right thing to do, and it is also good business. Attention to recycling and sustainability resonates with many customers and helps improve brand image. It also strikes a positive chord with employees. According to the Deloitte Millennial Survey 2019, younger workers “show deeper loyalty to employers who boldly tackle the issues that resonate with them most, such as protecting the environment.”

As for the relationship between sustainability and profitability, Bank of America Merrill Lynch found in 2018 that companies with a better ESG (Environmental, Social and Governance) record than their peers delivered higher three-year returns, had a greater likelihood of becoming high-quality stocks and were less likely to experience large price declines or bankruptcy.

As the Triple Bottom Line approach becomes more pervasive, sustainability concerns are becoming integral to corporate strategy. Corporate leaders are embracing the importance of recycling and zero waste initiatives within the broader context of their corporate sustainability aspirations.