Why selling the environmental benefits of pallets is a heavy lift
Shipping pallets: Not a topic that typically rises to the top of the sustainability agenda for most companies.
Perhaps it should. As companies probe ever deeper into their supply chains in search of ways to reduce waste, energy, greenhouse gas emissions and other negative impacts, pallets are poised to carry more weight in the conversation.
That’s my conclusion after spending time last week with leaders from the pallet industry. I keynoted the Annual Leadership Conference of the National Wooden Pallet & Container Association (NWPCA) and had the chance to learn how sustainability fits into the industry’s agenda, its efforts to promote wooden pallets’ environmental benefits and some challenges in doing so.
Selling pallets’ sustainability issues to customers can be daunting, especially for smaller companies.
First, some stats: Nearly 2 billion pallets are in service on any given day in the United States, plus 3 billion in Europe, about 95 percent of which are made from wood. Each is manufactured from between 10 and 17 board-feet of lumber — typically oak or southern yellow pine. The industry claims that 90 percent of America’s supply chain moves on a pallet, about 90 percent of which are constructed from wood.
For decades, the wooden pallet industry has been vying to be seen as the environmental choice, compared with plastic, its main competitor. (Decades, indeed: I first wrote about this very debate in 1994.) The messaging and marketing challenges mirror those faced by many sectors: telling a compelling story that favorably compares oneself to a competitor, including combating myths and misunderstandings about one’s product, including those perpetrated by those same competitors.
It turns out to be a heavy lift.
The pallet sector is diffuse, spread among hundreds of companies in the United States alone, mostly smaller firms, making it difficult to build a unified messaging force. Environmental considerations don’t loom large for most pallet buyers — primarily those in the operations and purchasing departments of manufacturers and retailers — frustrating wooden pallet makers who feel they have a compelling story to tell. Price and availability trump nearly every other consideration.
Still, the environmental story is compelling. I won’t bother with the litany of facts the industry touts — you can find some of them here — but was particularly struck by these two tidbits: 95 percent of wooden pallets are used multiple times and, when they are no longer usable or repairable, 97 percent end up as new products, such as boiler fuel, mulch, animal bedding or pellets to make biofuel.
That’s an enviable sustainability story to tell, although the industry is finding it difficult to break through. One challenge is that plastic pallet makers — about 5 percent of the market — believe they have a compelling story, too: They tout plastic pallets’ safety, cleanliness, durability and cost-effectiveness. Along the way, they trash-talk wooden pallets, which they say are heavier, difficult to keep clean and have a higher risk of infestation and contamination when damp, a particular issue for the food industry.
The wooden pallet folks, for their part, counter that plastic pallet makers’ claims of environmental superiority aren’t based on verifiable life-cycle data, which would portray them unfavorably in an apples-to-apples comparison. They also hope to capitalize on the current wave of anti-plastic sentiment by showcasing wood as a "natural" product.
When I met with the NWPCA’s board following my speech, I advised them to avoid vilifying plastic — the problem, after all, isn’t plastic so much as plastic waste — and to do a better job of telling their story. For example, many of their biggest customers — the world’s largest brands and retailers — need help gathering sustainability data from their supply chains, and pallets are an obvious (yet overlooked) part of that. Solving customers’ problems is usually a better bet than disparaging the competition.
There are signs of progress. For one of the first times ever more pallet companies are utilizing sustainability reporting as a selling tool. There are increasing reports sustainability become a real selling point.
Still, for most pallet companies, selling pallets’ sustainability issues to customers can be daunting — again, a situation common across sectors, especially those dominated by smaller companies.
"I think a lot of it is capturing what you're already doing, and then going ‘OK, how can we make sure that we are having a sustainability conversation within our organization and that it is one of our corporate values,’" counseled Chaille Brindley, vice president of operations and publisher of Pallet Enterprise magazine. "I think every company out there is going to have their own unique sustainability or ESG story."
Building the right toolkit is critical: Amassing the data that can become proof points, crafting messages around those proof points, arming the sales and marketing teams with talking points, testing those messages with customers, continually assessing what’s working, then pushing out what works.
Having a supportive trade association helps, too. NWPCA has built several tools for irs members, including a Pallet Design System, a proprietary software package to help manufacturers incorporate the latest data, engineering and technologies into their pallets. Licensees of the software are automatically certified under the U.S. Agriculture Department’s BioPreferred program, providing manufacturers with a product eco-label.
The association also developed an Environmental Product Declaration (EPD) for wooden pallets, which includes a life-cycle assessment for all stages, including production, use and end of life. The tool was verified under the UL Environment EPD program and developed in compliance with ISO standards. Meanwhile, some pallet makers have created carbon calculators on their websites (example), another useful sales tool.
It's still early days — the environmental benefits of wooden pallets will take time to become a sales attribute for most customers — but I was impressed with the sector’s earnest efforts to make it a true product differentiator. And as more companies plumb their supply chains to address environmental and social issues, it’s inevitable that some of them will take note of those ubiquitous wooden workhorses that carry their goods to market.