Tags: Warehousing, Cantarero Pallets, Inc., Pallets, Sustainability
From materials handling to retail operations, pallets support supply chains and sustainability goals.
If you want to see what keeps pallet company executives awake at night, walk through the nearest warehouse store, where you might see the latest fashions displayed on a plywood table lifted to waist height by a stack of pallets at each corner.
The sight of supply chain assets such as pallets sitting idle is similar to a semi-trailer being used as a temporary warehouse instead of hauling loads across the country. While they should be humming through the supply chain, those pallets are building up dwell time.
A pallet sitting too long in one place effectively reduces the supply of pallets, driving up costs and consumption of resources to make them.
The problem is, that pallets are everywhere, and people sometimes take them for granted. Pallets, and related products like skids, have been around for nearly a century and evolved alongside the development of the forklift.
During World War II, their use took off, and they have been a critical link in the supply chain ever since. Those first pallets were made from wood, but over the years pallets have been constructed from corrugated cardboard, steel and other metals, and plastic.
More than 2 billion pallets are in circulation in the United States, and more than 90% of all goods are shipped on pallets, according to industry estimates. A large percentage of pallets are made of wood, the industry standard for years. As warehouse automation technology develops and supply chains are under pressure to be more efficient, wood and plastic pallets are in the spotlight like never before.
KEEP THEM MOVING
Take the issue of dwell time that makes pallet executives cringe. Dwell time is counted from the time a pallet reaches a point of use, such as a manufacturing plant or distribution center, it's loaded with product, delivered, and then turned back into the pallet pool for reuse.
At iGPS, an Orlando, Florida-based plastic shipping pallet supplier, the average pallet dwell time is about 30 days, according to Jeff Pepperworth, president and CEO. During 2020 and the supply chain disruption due to COVID-19.
Due to the shift in consumer demand and the supply chain during the pandemic, it was more important than ever to keep pallets circulating to supply consumer goods such as food and beverages, cleaning supplies, and paper goods.
"When you look in your pantry, those products were pretty much all the volume that we saw from categories that have excellent growth," Pepperworth says. "Being able to utilize our fleet in a way that expanded another turn and a half was very advantageous."
THE LONGEVITY OF PLASTIC PALLETS AND THE FUTURE OF WOOD PALLETS
Oconomowoc, Wisconsin-based ORBIS Corporation offers plastic pallets in pools and management services and works to manage dwell times. Plastic pallets are designed to handle the longevity of being in a system without imposing added costs for items that may not move as quickly.
"Products that are captive to a warehouse, distribution, or fulfillment center and have 'high' dwell times are the best fit for reusable plastic pallets," says Alison Zitzke, senior product manager for pallets, ORBIS Corporation.
Whether in a tight, closed shipment loop or inside a facility, the life of a plastic pallet will skyrocket. In a study conducted at Virginia Tech, a plastic pallet lasted more than 200 turns versus a white wood pallet at 11 turns.
"This could mean an additional 20 years added to the life of a plastic pallet," Zitzke says.
SMARTER PALLETS
Until very recently, pallets were siloed assets because there was no supply chain connectivity or way to engage. That's changing as technology plays a more significant role across the supply chain and pallets are getting smarter.
“For companies considering investing in warehouse automation, pallets should be a part of the planning process rather than an afterthought,” says Pepperworth.
Family-owned wood pallets manufacturer and supplier Cantarero Pallets, Inc., based in Wauconda, Illinois, has been strategically expanding its’ operations by adding additional warehouse facilities throughout northern Illinois. At the same time, they are studying ways to integrate RFID tags and other technologies into their pallets’ product mix. “We see a lot of potential integrating RFID and similar technologies into wood pallets also,” says Cantarero.
Increasingly more pallets fleets are equipped with RFID tags and barcodes to interface with standard automation technology, so that capability could be built into the system. Instead of tagging every carton or product, shippers can incorporate the RFID tags to track products through the warehouse and the rest of the supply chain.
RFID technology is non-proprietary, so it can be used across many different systems and pallet product lines, from point of sale to ERPs. That's especially useful for companies that have grown through mergers and acquisitions and haven't integrated technology systems.
"An RFID chip and a barcode are universal across scanning technologies," Pepperworth says.
Pallets that can communicate are game changers for warehouse automation.
"We have customers that have replaced what they would consider their license plate on a pallet with our RFID chip, so pallets are now a smart asset," Pepperworth says. "Every time I visit a customer, there's always some kind of new utilization, and we're on the cusp of explosive automation growth over the next 10 years."
The tracking technology could also assist with immediate product recalls. The product in question can be tracked to the pallet and the location in the warehouse to remove it from circulation.
Plastic pallets are favored for highly automated operations because they are dimensionally consistent and create a smooth interface between automated systems and product loads. Wood pallets have a higher likelihood of broken boards or nails popping out, causing potential downtime in an automated system, as well as possible product damage.
“Wood pallet manufacturing and quality build processes have greatly improved,” says Anwar Cantarero, CEO of Cantarero Pallets, Inc. “Because of the sheer numbers of wood pallets already in use and the universal nature of scanning technologies, we see accelerated growth and new integrated technologies rapidly developing in the wood pallet product line also,” Cantarero said.
LONGEVITY AND READABILITY
"Plastic pallets offer long-term, repeatable performance and easy readability by photo eyes and sensors that are critical to seamless integration in automated environments," Zitzke says. "Pallet users should consider these factors when they calculate return on investment for reusable packaging to gain a holistic picture of cost."
Plastic pallets contribute to a higher level of uptime in automated operations. Wood pallets may be damaged or become damaged and leave behind debris and dust in the automated system. That can lead to shutdowns for cleaning or repairs.
"Plastic pallets are a consistent asset that can fit into those automated environments," Pepperworth says.
The cleanability of plastic pallets and their long service life make them ideal for integrating with a new or existing automated system with added benefits of ensuring the plant is kept clean and products are protected. Plastic pallets are even offered in FDA-approved material for direct contact applications that require high hygienic standards, such as food and beverage manufacturing. However, because of growing concerns about plastics and harm to the environment, there still is high demand for wood pallet products.
“Natural hardwood pallets are part of our environment from the start,” says Cantarero. “Excess scrap from wood pallet manufacturing and use ultimately gets returned to the environment from where it came, so no environmental harm is done. Wood is a renewable resource,” Cantarero says.
PALLETS AND THE PANDEMIC
During the early pandemic lockdowns, pallets were considered an essential service to keep store shelves stocked. When product shortages arose, pallets had to be available to move goods to the grocery and healthcare channels. The growth of home delivery and curbside pickup didn't lessen the demand for pallets.
"It still takes pallets to get bulk loads down to fulfillment and single distribution," Pepperworth says.
As pandemic restrictions ease, consumer buying habits may be forever altered, leading to new supply chain patterns. Consumers may shop less frequently but buy more per visit, requiring new strategies to maintain fulfillment levels.
Zitzke sees COVID as a catalyst for rapid, significant change in the supply chain and warehousing and distribution environments. Programs that used to take years to justify are being implemented more quickly because companies are being pressured to adapt to new trends like increased consumer e-commerce buying patterns or the need for washable, hygienic pallets.
"During the pandemic, plastic pallets were crucial in the transportation of essential goods like toilet paper and cleaning materials," Zitzke says. "Suppliers needed to cube out pallets and trucks to transport as much as they could in a single load due to trucking and freight labor constraints."
SUPPORTING SUSTAINABILITY
Supply chains are under scrutiny regarding their environmental impact, and pallet suppliers are supporting sustainability trends. Many large shippers and receivers set sustainability goals, including reducing their carbon footprint or manufacturing/packaging waste, and consumers are paying attention.
"The sustainability trend has encouraged companies to seriously investigate plastic pallets and other reusable solutions as replacements for expendable packaging," Zitzke says. Plastic pallets are considered more sustainable than wood pallets in many respects, even though wood is a renewable resource.
The usage of plastic pallets reduces lumber waste and the amount of emissions and water it takes to manufacture or recycle wood pallets after their limited use.
Most wood and plastic pallets are fully recyclable at the end of their service life, and many of them are also manufactured with 100% recycled material,” Cantarero says. "Several customers request us to reuse their wood scrap in their pallets to achieve their sustainability initiatives."
This strategy also helps reduce pollutants generated during the production of virgin resin, as the recycling process has lower emission output.
"COVID has accelerated this consumer trend and is pushing companies to change the way their supply chain works and the packaging materials they choose," Zitzke says. "Companies are taking this opportunity to come out of the crisis with more sustainable operations and move toward reusable solutions when the cost is justified."