When it comes to buying wood pallets, there are several factors to consider. Modern Materials Handling Magazine’s 2018 annual survey found that purchase price was the most important factor in the selection process for 57% of respondents, although this was down from 59% and 60% in the two preceding years. Other criteria registering high scores included strength, durability, reusability, availability, meeting customer requirements, and cost-per-use. Here are some missteps to avoid.

Relying on outdated wood pallet specifications

Supply chains evolve over time. Companies acquire other companies that have different equipment and processes. Even at existing plants, investments in material handling equipment, evolving product offerings, and a changing customer base may all present new challenges in transporting the unit load on a legacy pallet.

A periodic review of the pallet specification with your pallet supplier can achieve continued unit load optimization, even as the supply chain transforms.

Approved pallet supplier cannot perform a site visit

As a busy pallet buyer, it can seem inconvenient to allow approved bidders on site to review pallet conditions and processes, especially considering COVID-19 precautions. It is an essential part of the process that will pay dividends.

A site visit allows the bidder to accurately capture important information about the pallet application, and in a timely manner. This approach can help expedite the bidding process. A site visit can also help pallet suppliers identify cost savings opportunities or other insights that can provide value to pallet users.

Inflexible on hardwood vs softwood pallet types

In the United States, the West and the South are more commonly associated with softwood, while the East is typically oriented to hardwood production. Pallet specifications can propose either hardwood or softwood in their build.

However, if a new plant begins operations in a different part of the country, or if comparative prices of hardwood and softwood change due to market conditions, it makes sense to revisit the pallet specification with regards to available lumber supply.

When market volatility increases the spread between hardwood and softwood prices, it can make sense to explore pallet redesign options with a pallet supplier.

ISPM-15 Heat treatment and mold on wood pallets

There is a common conception that the heat-treatment required for ISPM 15 compliance will help to prevent the occurrence of mold on pallets.

While heat treatment will initially kill surface mold on pallets, mold can easily re-colonize wood pallets that have a moisture content of more than 19%. A better approach to mold prevention is assuring that pallets arrive in a dry condition from the pallet supplier and that they are kept dry when received and put into storage prior to use.

Overlooking transportation opportunities

Products such as pallets have a relatively low value in comparison to their weight and volume. Such products are referred to as having a low value density.

Given the low value density of pallets, transportation can quickly become a significant portion of pallet cost. At the same time, the number of trucks running empty is significant, estimated at 20% or higher. By working with pallet suppliers to examine carrier and route information, possible synergies can be identified to help reduce costs and transportation miles.

Underestimating the value of customer service

When buying pallets, there is more to consider than price. Do not underweight the importance of customer service. Your company will have expectations about reliable quality and availability, delivery schedule, type of delivery vehicle, whether pallets are banded, and more.

Shortcomings in customer service can result in costly downtime, double handling, and customer dissatisfaction. The result can be increased production and distribution costs, and potentially lost revenue. The direct savings in pallet purchases can become overwhelmed by increases in indirect cost.

The list of false steps mentioned above provides a useful starting point in addressing the blind spots that pallet buyers can encounter. The common thread in these cautions is the importance of keeping an open line of communication with your pallet supplier. Communication and trust are critical to optimizing the purchase of new pallets for your supply chain.

COVID-19, Supply Chain Trends, and Pallet Selection-What’s Important Now!

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.

Sanitized Wood Pallets

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.

Consumer Behavior and Wood 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.

COVID-19 and Supply Chain Automation

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.

Re-manufactured pallets present a new opportunity

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.

What are the advantages of re-manufactured pallets?

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.