Anyone who has worked in logistics knows that wood pallets have their place in the supply chain and always will. However, the disadvantages of wood pallets are clear, especially in highly regulated industries like food and pharmaceuticals. In these cases, switching from wood to an alternative pallet material like plastic can reduce the likelihood of product contamination that could lead to a recall. For those storing and shipping heavy industrial equipment, plastic pallets provide a stronger and more resilient platform that is less likely to crack. And in warehouses using automated equipment, the uniform shape and weight of plastic can help increase throughput by minimizing machinery errors and jams.
So why is wood so popular? For one thing, wood is often less expensive upfront than man-made materials. It’s also widely available, meaning that pallets can be sourced from a number of suppliers. Finally, in many cases, wood pallets are used out of habit, simply because they have always been used. However, supply chain and operations managers using wood pallets may not realize just how many of the issues they deal with every day can be traced back to wood pallets–and just how expensive those issues can be.
How the Disadvantages of Wood Pallets Cost Companies Money
Most supply chain managers considering the disadvantages of wood pallets are concerned about their bottom line. They want details on how their pallet choice is impacting their Total Cost of Business (TCOB).
Wood pallets need to be replaced much more often than pallets made of alternate materials.
There are a few ways that wood pallets can cost companies money when it comes to supply chain management:
- Rejected Loads: In some cases, when pallets aren’t up to par, retailers have a policy of refusing them on sight to avoid taking on damaged products or risking injuries to their employees, and equipment caused by broken pallets. When a load is rejected, perishable products have to be discarded, causing significant losses for manufacturers. Even returnable products have to be transported back to the warehouse to be repacked, increasing overall transportation costs. Retailers may even charge a “bad pallet fee,” which can quickly add up.
- Transportation Costs: Wood block pallets may weigh as much as 80 pounds, and this weight can ultimately increase transportation costs, as more fuel is required to ship a heavier load. Trucks transporting heavy products may not be able to carry as many loaded pallets due to the excess pallet weight, requiring more trips to carry the same amount of product. Overall, those in the transportation industry could save as much as $2.76 per pallet turn if they eliminated wood pallet use and switched to plastic.
- Product and Equipment Damage: Wood pallets can break apart and leave behind splinters that can cut into packages and damage products. The hardware used to hold these pallets together, like nails and metal fasteners, may come loose and puncture products, contaminating shipments. These wood splinters, hardware, and debris also get into automated machinery and cause jams, which may result in equipment damage and backlogs.
- Contamination: When wood decays or breaks due to stress, sharp pieces may fall into food or pierce packaging and be left behind in the product, causing foreign material contamination. Wood is also porous, making it prone to absorb water, which can lead to mold, mildew, and bacterial growth. The pores of wood, which are very difficult to clean, may also hold chemical contaminants that can transfer to products and lead to an increased risk of illness for consumers.
- Replacement Cost: Wood pallets need to be replaced much more often than pallets made of alternate materials. Wood block pallets are typically retired after a maximum of 20 trips, while plastic can last up to 100. Wood pallets will require more maintenance than plastic over their lifetime, increasing the cost of keeping them in use.
- Higher Labor Costs: Wood pallets come with a greater labor cost because the wood debris they leave behind in truck trailers and warehouses must be cleaned up regularly. Businesses could save as much as $0.26 per pallet turn on housekeeping costs alone if companies chose a more durable pallet option like plastic.
These are just a few ways the disadvantages of wood pallets can increase the cost of doing business. For manufacturers with concerns regarding durability, sanitation, and uniformity, plastic pallets are an alternative that offers long-term cost efficiency.
How Plastic Pallets Can Reduce Supply Chain Costs
Plastic pallets are able to reduce supply chain costs over time because their very design eliminates many of the disadvantages of wood pallets. Plastic platforms are up to 35% lighter than wood ones, which not only reduces transportation costs but can also reduce employee injuries associated with handling pallets as well as wear and tear on forklifts and other machinery.
The disadvantages of wood pallets are clear when you understand that eliminating them from the supply chain would also eliminate anywhere from $750 million to $3 billion in supply chain waste.
Crucially for manufacturers and retailers in the food or pharmaceutical industry, plastic pallets won’t absorb moisture and have unibody designs that eliminate the need for fasteners and hardware. As a result, plastic pallets are far less likely to break down and contaminate products or cause damage to equipment. They’re also much easier to clean than wood, as bacteria stay on the surface and can be removed through sanitization.
The disadvantages of wood pallets are clear when you understand that eliminating them from the supply chain would also eliminate anywhere from $750 million to $3 billion in supply chain waste. Those who transport food, beverages, medicine, paper products, heavy industrial items, or who simply handle a large number of products using automated systems may find that plastic can help reduce their TCOB while ensuring they are able to provide fast and reliable service to retailers and other customers. For many manufacturers, plastic pallets offer a major opportunity to improve the efficiency of just about all aspects of the supply chain.
iGPS plastic pallets eliminate the disadvantages of wood pallets while providing measurable reductions in Total Cost of Business. Through our pooling program, you can outsource your pallet maintenance and replacement to enjoy even more long-term cost savings. For more information on our options, contact us at 1-800-884-0225, email a specialist atswitch@igps.net, or visit ourcontact page.
