December 20, 2005
Volume 1 Issue 41

Save Thousands of Dollars with Pallets

Pallets are used to ship products efficiently, with minimal damage to goods.  The way your company manages pallets has an impact on the bottom line.  Re-evaluating your pallet handling options may identify opportunities to save money and reduce what you throw away as waste.

Each year, roughly 500 million new pallets are manufactured in the United States.  You depend on your pallets to ship your product efficiently and successfully, and you do not want your product damaged because of a broken pallet.  There are many choices as to how you can manage the use of your pallets.  Consider cost savings:

• Reduced product damage due to pallet breakage.  

• Reduced worker's compensation costs due to injuries from working with pallets.

• Lower waste disposal costs; fewer pallets thrown away as garbage.

There are several options as to how you can minimize the cost of wooden pallets. 

• You can rebuild and reuse.  Pallets are only made for one or two trips; so your company may want to consider purchasing a more durable wood so they can be reused, which means additional trips and long term savings.   

• You can also do pallet recycling to save money.  Pallet recycling avoids costs on waste disposal. 

• You can join a “pallet pool” where you join a network of pallets that is operated by a pallet rental service. 

To ultimately save money and get the most out of your pallets, you may consider the alternatives to wooden pallets.  The alternatives would be plastic, corrugated cardboard, or a combination of these materials.  These options are more expensive; however, they will save your company money in the long term.  

Things to be considered when operating in a program of reusable pallets:

• Is your shipping system closed or open loop?

• What is the average weight of a pallet load?

• Is the load stackable and/or stable? How frequently are pallets shipped?

• What type of storage system?

• Is it rackable?

*Note: The cost comparison above is intended for illustrative purposes only. Actual costs to your firm will vary. Other factors that affect costs include transportation costs, actual life expectancy, quantity discounts, etc.

If you are using a closed loop system, where the pallets are always brought back by your delivery people, plastic pallets would be a good investment and will save the extra handling dollars in dealing with broken wooden pallets. Sometimes the initial investment of being the lowest is not the best long term solution for cost savings.

“In 1994, Frigidaire Freezer Products, St. Cloud, Minn., implemented a new reusable transport packaging system. This included working with one of their suppliers to switch from wooden pallets to covered, collapsible, plastic palletized containers. Frigidaire prevents 12,000 pounds of waste and saves approximately $5,200 annually.”

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