Lately we've been focusing on the driver shortage and how Brexit has added onto the Covid bonfire. However this week, we'll look at the unsung heroes of the supply chain, wooden pallets.

The pallet is a simple object. This seemingly benign item can be found in warehouses, industrial and tractor-trailers all around the world. Business owners, warehouse workers and even the final consumer all too frequently mistreat and misuse these vital shipping instruments. It's not uncommon to witness unused wooden pallets being gathered from all areas of the warehouse and thrown into a fire. People might think twice about how they handle their wooden pallets if they realised the true value of each one, both monetary and logistical.

The principle of movement underpins supply chains. Moving raw supplies to manufacturing centres, finished goods to their respective markets and finally, the consumer's hands. A supply chain is more akin to a river that flows continuously from its source to its destination. Pallets give your supply chain the dynamics it needs to keep things running smoothly. Pallets aren't just for moving products and materials upstream in your supply chain. They also play a number of other important roles, such as:

  • Transporting freight while accommodating load weight.
  • Protecting freight from rollovers and other consequences.
  • Providing a point of attachment for forklifts and other loading machines.
  • Using as little space as possible during transportation.

Despite the fact that pallets typically go unobserved through each phase of the logistics process, they are an essential aspect of practically any company's supply chain. The pallet shortage has the potential to harm everyone's operations and bottom line until the global supply chain is straightened up. Goods will continue to flow from their point of origin, the trick is to deal with the higher prices that follow. If the price of timber continues to rise, the cost of transportation and the cost of the items themselves will rise as well.

Re-imagining the system through environmentally friendly alternatives:

Do our pallet supply chains require a complete overhaul? Some claim that there are better, more environmentally friendly alternatives than producing and purchasing tens of thousands of wood pallets each year. And for many, it's a financial decision.

Friendly alternatives entail either repairing used wooden pallets or purchasing recycled-material pallets. Although wood pallets remain the most popular; plastic, wood composite, metal corrugated/cardboard and other types are also widely used, albeit in smaller quantities. Recent challenges faced by producers have prompted companies acquiring wood pallets to seek other materials.

Plastic pallets have become increasingly appealing to users as a result of changing conditions, such as specific needs, preferences and environmental goals. Supply chain interruptions have generated increased demand for reusable pallets. Reusable plastic pallets are gaining traction and customers are speeding up conversion timescales. It's often not a question of which material is best, but which materials are best for specific applications.

What potential solutions are there?

Renting pallets or joining a pallet pool is an option that can be beneficial. Pallet pooling where a closed ecosystem of pallets is utilised, maintained and reused is often a desired alternative. Renting has become popular among larger merchants who have vast fleets of pallets in their system and a well-established supply network. They tend to buy if they want more control over their fleet. Customers who deal with pooled/rented pallets may not be able to get them right now because there aren't enough wood pallets on the market. Pallet renting is popular when the pallets can be tracked, traced and recovered. Otherwise, the costs of obtaining a pallet outweigh the costs of losing a pallet.

How would you change the current system if you could?

Resources:

https://www.forbes.com/sites/harrybroadman/2021/09/30/global-supply-chains-crisis-is-much-bigger-than-the-pandemic-the-transformation-theyre-undergoing-is-the-cure/?sh=19147ec77f80 https://www.symbia.com/blog/2021/7/15/wooden-pallets-unsung-hero-supply-chain?locale=en https://supplychaindigital.com/logistics/pallets-hidden-linchpin-supply-chain https://www.producebusiness.com/the-effects-of-a-tight-pallet-market/