The COVID-19 pandemic has impacted supply chains and consumer behaviors worldwide. It has heightened the awareness of sanitation and is accelerating shifts involving shopper format preference and palletized handling automation. Here are three changes to consider from the pallet usage perspective.
In the wake of the COVID-19 pandemic, concern about pallet sanitation and cross-contamination briefly became a talking point during initial concerns about contact surfaces as a means of spreading the infection.
While that conversation has somewhat faded, sanitation remains an ongoing item of interest for savvy shippers. According to the U.S. Food Safety Modernization Act (FSMA Final Rule on Sanitary Transportation of Human and Animal Food, the design and maintenance of transportation equipment, including pallets, must “…ensure that it does not cause the food that it transports to become unsafe.”
As such, pallet users should ensure that pallets used for food shipments are clean, dry, and sound.
Wood pallets compare favorably to pallets made from other materials. Recently released research undertaken by Institut für Holztechnologie in Dresden on behalf of the European Pallet Association (EPAL) in Germany compared the microbial properties of wood and plastic pallets. It found that bacteria had a lower survival rate on the wooden surface than on plastic.
The wooden pallets are suitable for use in hygiene sensitive areas, including food processing and transport. As stated in the report, wood has natural antibacterial properties that prevent microorganisms from spreading. It reported that wooden pallets have an antibacterial activity that is more than 13x higher than that of comparable plastic pallets.
Consider that in April 2020, online retail sales grew by 120%, accounting for almost 10% of everything sold. COVID-19 has acted to change shopper behavior, with more people moving to online ordering and frequenting smaller footprint retail locations.
Likewise, there has been a significant shift away from the food service sector to online and grocery retail as restaurants struggled with closures during the pandemic. Online shopping and the retail formats favored by customers could influence pallet selection in the future.
Smaller pallets can provide easier handling in the narrow aisles of convenience stores and help speed up delivery. An increase in small format retailing would suggest a greater opportunity for smaller wooden pallets.
However, a decrease in supermarket shopper traffic and more home delivery or curbside pick-up would suggest less demand for display pallets for floor and in-aisle placement. The influx of new technologies, such as automated micro-fulfillment systems at retail, increases the efficiency of ecommerce and will help accelerate this trend. Such a shopper behavior shift could dampen the anticipated growth of half and quarter size pallets, as well as point of sale displays.
Current and future consumer behavior shifts add a layer of uncertainty to optimal pallet selection in the food sector. Wood pallets, which can be easily customized to a specified size, as opposed to plastic pallets that require costly molds, provide much greater flexibility and a much quicker response to possible shifts in the wake of the pandemic.
Another area of uncertainty is how the pandemic will influence the uptake of automation. A report from McKinsey suggests that in the short term, COVID-19 has negatively impacted capital investment. Several observers, however, feel that the pandemic will escalate interest in automated solutions.
“Automation that shields workers from sickness while ensuring the delivery of critical goods and services could initially be welcomed by workers and the public at large,” one expert observed recently. He observed that companies that invest in automation are “likely to come out faster – and perhaps stronger – as the economy rebounds.”
Automation can affect pallet requirements. Typically, automation requires a quality-controlled and uniform pallet. Issues such as poor-quality or missing bottom boards, missing or damaged components, and excessive deflection can impact pallet performance in automated systems.
If we do witness a rush to automation, pallets must be considered an element of the project design process. And after installation, a robust quality assurance program will help ensure that wood pallets will continue to perform at a high level.
The pandemic has resulted in several uncertainties for supply chain participants, and changes may impact pallet selection. Luckily, the flexibility offered by wood pallets and the industry’s professionalism will enable operators to keep pace with any shifts in customer demand as we transition into the future.
If you haven’t heard about combo and re-manufactured wood pallets, you just might be missing out on an important opportunity. Re-manufactured custom and standard wood pallets can provide great value and enhance the sustainability of your supply chain. They can be more cost effective than new pallets, and provide consistency as well as the opportunity for customization. As circular economy supporters have noted, refurbishing and re-manufacturing existing materials are more sustainable options than end of life recycling. The construction of re-manufactured pallets from recycled components is a green solution that can enhance corporate sustainability performance and improve the bottom line.
Combination pallet (Combo) – a wood pallet that is manufactured from a combination of new and recycled wood components.
Remanufactured pallet (Remand) – a wood pallet that is manufactured completely from recycled wood components. Some pallet companies use other terminology, so be sure to check with your pallet provider.
Since it’s beginning, the wood pallet recycling industry has been responsive to new ideas and opportunities. It is hard to believe today, but back in the 1980’s many companies did not reuse pallets. As stockpiles of empty used pallets accumulated at plants and warehouses across the country, a light bulb clicked on. Entrepreneurs recognized that they could refurbish and sell them. All it took was customer acceptance that more affordable used pallets could fill their needs. With that buy-in, the recycled pallet market began to boom.
But what happens when wood pallets can no longer be economically repaired? One way that pallet recyclers address this situation is to dismantle them. The usable boards and stringers (components) can be used to repair other pallets. But over time, pallet recyclers found themselves with excess pallet material and not enough recycled pallets to meet all the demand in the marketplace. Then in the 1990s, a few companies began to build combo pallets, a practice that allowed them to best utilize surplus pallet parts. And more recently, re-manufactured pallets have emerged as an outlet for the excess material recovered from unrepairable pallets. The re-manufactured pallet represents a new stage in the evolution of the pallet recycling industry.
As recycled pallets can accumulate from a wide variety of sources, they can vary somewhat in deck board thickness and placement, pallet height and other details. Remanufactured pallets, on the other hand, offer the opportunity for greater consistency. Recyclers typically sort recovered deck boards as “thins” (generally boards ⅜” – ½”) or “thicks” (typically boards 5/8″ – ¾”). Some recyclers also resize recovered stringers to provide uniform height. As a result, re-manufactured wood pallets can provide a more consistent product than recycled.
There are additional benefits. Remanufactured pallets are not limited to standard sizes. Remanufactured pallets can also be built to custom sizes – although they are typically limited to sizes the same or smaller than the recovered material. With remanufacturing, the buyer also has much more control over the specification regarding board count and placement as well as regarding nailing. To be clear, the degree of precision does not match that of new pallets but can be a step up from recycled pallets.
One of the challenges for re-manufacturing pallets is that it is still often a manual process, with pallets nailed together by workers using nail guns. However, the landscape is changing. Automated nailing equipment designed for re-manufactured pallets is increasingly available, a development that should make them more widely available in the future.
In the right application, re-manufactured pallets can deliver solid value and a sustainably superior solution. Talk to your pallet provider to see if re-manufactured pallets could be a fit for your supply chain.
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.
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.