2009-09-18- The rise of the plastic pallet
While plastic pallets still represent a small slice of the total pallet market—with wood comprising more than 90% of market share—they've been steadily growing in use over the last few years.
"The Material Handling Industry has stated that the plastic pallet market has doubled in size over the last 10 years," says Margot Beesley, director of marketing communications for Buckhorn (800-543-4454, www.buckhorninc.com). "One reason is the trend toward increasing sustainability throughout the supply chain, as we've seen with Wal-Mart's recent Sustainable Product Initiative. As companies are trying to be more eco-friendly, the reusable nature of plastic pallets makes them more attractive."
The environmental advantages of plastic pallets correlate to their ability to be repeatedly used. Wood pallets are generally expected to last for somewhere between seven to 10 trips before retirement—and that lifespan includes several refurbishments to replace broken or missing deck boards or nails, says Curt Most, Orbis Corporation's national pallet sales manager (800-890-7292, www.orbiscorporation.com).
"Conversely, plastic pallets could realistically make between 200 and 250 trips," Most says. "When a plastic pallet is deemed unusable, it's ground up back into resin and reformed as a new pallet. True, you can chip up a wood pallet, but there is a cost to having the nails and metal removed. Therefore, using plastic pallets decreases a company's landfill costs."
Plastic pallets also tend to be lighter than their wooden counterparts. That lighter weight makes them more ergonomic and easier to handle in manual operations, addressing OSHA guidelines that recommend a single person lift no more than 50 pounds.
Although the exact characteristics of plastic pallets vary depending on the type of resin and the molding technique, these pallets are more uniform in size, shape and weight. With more and more industries turning to automation for manufacturing and warehousing, that uniformity is a prerequisite to effective operations.
"When replacing wood pallets with plastic pallets in automated operations, equipment uptime will improve dramatically," says Bill Mashy, general manager of Rehrig Pacific's materials handling group (800-421-6244, www.rehrigpacific.com).
"In the soft drink industry, for example, we've observed line efficiencies improve because the consistency of the pallet eliminates downtime at the palletizer," Mashy says. "The plastic pallet does not cause jams, resulting in more uptime and improved line speed."
Further, plastic is recognized as being more sanitary and easier to clean, than wood. The material doesn't absorb moisture or harbor bacteria, such as salmonella, E. coli, or listeria. This makes plastic pallets a popular choice for processing and handling in food, beverage, dairy and pharmaceutical industries.
"Although companies in food processing and distribution are still primarily using wood pallets, plastic pallet use is increasing 4% yearly due to current FDA regulations that put pressure on suppliers to eliminate contamination and damage," says Abby Verbeten, pallet marketing specialist for Orbis. "For example, the food industry has pallet washers for work-in-process pallets. Using hygienic plastic pallets, there are no concerns about rust from nails or bacteria and molds growing in a pocket or creeping under the boards as in wood pallets."
Companies transferring grains, for example, eliminate the chance that a chunk of wood from a pallet might wind up in a loaf of bread, Verbeten explains. Likewise, if a split decking board from a wood pallet punctures through a carton of pharmaceutical ingredients or finished product, the load is considered contaminated and must be trashed. "These two industries see tremendous opportunities to improve safety and handling from plastic pallets because they're shipping high-value products," she adds.
Additionally, plastic—unlike wood—doesn't need to meet phytosanitary requirements for international transport. Although heat- or chemically treated wood pallets are accepted for imports, the appropriate paperwork certifying their adherence to the regulations has to be processed. And, as with any bureaucratic system, time is not necessarily of the essence.
"If you're shipping really high-value goods that you don't want held up in customs, having a plastic pallet speeds the process," explains Rehrig Pacific's Mashy. The electronics industry, for this reason, has been increasingly turning to plastic pallets for border-crossing shipments of components and finished goods. However, as most international shipments are one-way, the cost justification for use of plastic pallets typically overrules their use.Closing the loop
Which brings us to the principal disadvantage of most plastic pallets: their cost—which is sizable enough to be classified as an investment by most of the major plastic pallet manufacturers. Most companies that invest in durable plastic pallets plan to reuse them again and again and, therefore, must develop an effective pallet management system to make their investment worthwhile.
"The easiest way to justify the investment in plastic pallets is if you have a closed loop system—they need to come back to you," says Buckhorn's Beesley. "While the upfront cost can be sizable, most plastic pallet companies help users determine their return on investment on a system."
The return on investment tends to happen relatively quickly, she adds, because—in addition to the extensive number of return trips each pallet can make—eliminating wood pallets also eliminates ongoing purchasing and replenishment of broken wood pallets, expenses and labor to repair them, and the time and disposal fees associated with getting rid of those that are beyond repair.
For companies that lack either the manpower or will to keep track of a fleet of plastic pallets, and to make the cost of plastic pallet use more palatable, a few plastic pallet pooling companies have been established. For instance, iGPS, Intelligent Global Pooling Systems, offers a standard 40 × 48 × 5.62 inch Grocery Manufacturers Association (GMA) pallet for lease at a pricepoint comparable to renting wood pallets, says Bob Moore, the company's chairman and CEO (800-884-0225, www.igps.net).
"I think the growth in plastic pallet use is because of pooling, because they are expensive. Depending on the price of the commodity—oil—at any given time our pallet runs between $60 to $70, making it a huge investment to buy your own fleet," explains Moore.
With iGPS' fleet of six million pallets being issued to users five times a year, Moore calculates that's the equivalent of 30 million plastic pallets circulating annually, rented at approximately the same rate as a wood pallet and at a price point lower than purchasing a wood pallet. "Renting plastic pallets is really the thing that has broken the market open and made plastic a viable way to ship goods," he says.
Plastic pallets reduce trip costs
Huhtamaki, one of the world's leading packaging companies, produces plastic cups, bowls, plates and other food packaging for food and retail companies. The Finnish company's U.S. corporate headquarters is located in DeSoto, Kan., with 13 manufacturing plants throughout the Americas.
At its New Vienna, Ohio, plant, Huhtamaki manufactures cups and lids for a major food manufacturer. It used wood pallets to ship cartons of cups and lids from its facility to the customer in standard 53-foot trailers. At the customer's location, the product is off-loaded and sent to production to be used in the packaging process.
Both companies were experiencing wood pallet breakage that caused downtime in their automated systems. In addition, they sought a shipping solution that was more hygienic, easier for employees to handle and more cost efficient on a per-trip basis. Huhtamaki's customer used plastic pallets in other parts of their plant and wanted to collaborate on a reusable plastic pallet program for the incoming shipments of cups and lids.
Huhtamaki worked with a supplier (ORBIS Corporation, 800-890-7292, www.orbiscorporation.com) to analyze product flow and subsequently select a stackable 44 × 51 inch reusable plastic pallet. The footprint optimized unit loads while maximizing trailer space for more efficient incoming shipments. With a very tightly controlled supply chain, the reusable pallets are quickly returned to Huhtamaki for replenishment.
Since implementing reusable plastic pallets, Huhtamaki has eliminated recurring costs associated with wood pallets and effectively reduced its pallet cost-per-trip by at least 50%—a savings that will continue to grow over the service life of the pallet. Further, with dimensional consistency, the plastic pallet offers repeatable performance for both Huhtamaki and its customer, which has strengthened the customer/supplier relationship.
Produce ships safely on plastic pallets to grocery
Riverside, Calif.,-based Wild Rocket Fresh & Natural Foods, a full-line processor of convenience fruit and vegetable food products, today delivers produce in reusable plastic pallets and containers to Fresh & Easy Neighborhood Markets throughout southern California, Las Vegas and Phoenix. England-based Tesco, one of the world's largest grocery retailers, owns Fresh & Easy Neighborhood Markets.
"When Fresh & Easy Neighborhood Market approached us in 2007 about options for pallets, they were well on their way to incorporating a European-style approach to returnable/reusable display systems for their stores—as was their parent company, Tesco," explains Bob Nelson, vice president of sales and marketing at Polymer Logistics. Nelson's company is a leading provider of one-touch/retail-ready packaging (RRP), and the supplier of plastic reusable pallets and food handling containers to Wild Rocket, and in turn to Fresh & Easy.
Both Tesco and Fresh & Easy were undergoing a major green initiative at the time, Nelson recalls, making reusable/recyclable pallets a perfect fit. Polymer Logistics selected reusable plastic products a supplier (Buckhorn, 800-543-4454, www.buckhorninc.com) because it satisfied the company's need to provide customers with a strong, highly durable product.
"Our pallets, as well as all of our RRP, are subjected to a lot of abuse from forklifts and we can't have a product in the supply chain that is constantly breaking," says Nelson. "Over time, that adds up to tremendous added expense and we want to keep that to a minimum."
Polymer Logistics uses two different structural foam-molded 48 × 40 inch pallets: an edge-rackable, straight-wall model with a dynamic load capacity of 7,000 pounds, and a space-saving, nestable standard duty unit with 9 reinforced feet for uniform load distribution. The company also implemented a plastic reusable container with a 24 × 40-inch footprint that cubes both pallets. Further, Polymer Logistics provides all grocery retailer logistics services including product transportation, quality inspections, cleaning, repairs and inventory management reports.
Food safety is a primary concern for Nelson's company. "We conduct a regular swab test on the pallets to look for any sign of contamination, and since the surfaces are smooth and easy to clean, this minimizes the risk in terms of food safety," he adds. "Clients in the meat, poultry, produce and bakery industries need clean pallets in their food processing environments."