Palletization is a challenging process, to say the least. It’s a daunting task for companies to align plastic pallets and stack them uniformly, and then look for a cost-effective way to return all pallets to the beginning of the supply chain.
So, how do you counter the growing transportation and management costs? Most companies look to get their answer through pallet pooling. Keep reading to learn the ins and outs of this helpful strategy.
How Does Pallet Pooling Work?
Simply put, pallet pooling is renting out or leasing pallets from a shared pool managed by a separate company. The independent pooling company is responsible for managing and ensuring that your pallets remain in good condition and ready for use whenever you require them.
In addition to in-house management, the same company is also responsible for managing the pallets that are taken to other companies or used to take products back to your manufacturing site.
All in all, having a pool service provider saves you the hassle of the logistics of a supply chain, which involves collecting pallets from the sites they’ve been transported to.
The core objective of a pool is to reduce the costs for the company obtaining it. The complexity of pallet procurement, coupled with management, recovery, repair, and waste management can lead to a significant addition in the total costs of a business.
When opting for pallet pooling, businesses look to concentrate on their capital expenditures and routine chain operations that constitute the core of their business – abolishing the costly distraction of owning and also maintaining a sizeable stock of pallets.
Furthermore, businesses that opt for making use of reusable pallets and further managing them in-house are torn between two tasks. To make matters worse, the two additional tasks don’t even constitute the core operations of the business!
Running a parallel pallet supply chain, in addition to staying on top of critical daily tasks, results in the accumulation of significant transportation and labor costs. Not only is it distractive, it is also a prime example of inefficient resource allocation.
One-Way Stringer vs. Reusable Pallets
One approach to dodging transportation and management costs is by using one-way stringer pallets. One-way pallets are most commonly graded by Grocery Manufacturer’s Association (GMA) – judged on how many rounds they have experienced throughout the supply chain.
A ‘club-grade’ pallet is one that is yet to be used and therefore, has never been repaired. It is priced at a premium due to its quality, and one that several manufacturers are willing to pay multiple times to ensure retailer acceptance.
Why? Because large retailers have very specific acceptance criteria which need to be met in order for the load to be received – and one of those is the quality of the pallet. These large retailers, in order to protect their quality levels and reputation, only accept high-quality pallets. Low-quality ones can repel potential customers.
Manufacturers that are reliant on one-way stringer pallets buy them just to make sure their loads are accepted. In addition to the premium pricing, these pallets are provided by a complicated and interdependent chain of producers which makes pricing highly unstable and unpredictable.
Why Opt For Pallet Pooling?
When choosing between one-way stringer and reusable pallets, the choice is clear – the sturdiness and durability of reusable pallets give them a better chance of passing through the strict acceptance criteria.
However, in order to make full use of reusable pallets, a business must invest in a complete network that receives, categorizes, makes necessary repairs, and prepares the items to be sent out again.
This is where opting for pallet pooling emerges as the most cost-effective and time-saving alternative. By taking care of maintenance, a pallet pool saves your business from the added expenses of storage and maintenance, as well as the wages of the workforce specifically dedicated to pallet maintenance.
Additionally, pooling reduces the transportation costs of the company, as there are no more empty loads consisting of nothing but pallets.
Why Plastic Pallets Trump Wooden Pallets in Pools
Tightening quality standards as well as rising transportation costs have led to companies abandoning reusable wooden pallets for plastic ones. Here’s why:
- Wooden Pallets Can Cause Product Damage: Rough edges, splinters, and changing of shape due to wear-and-tear can puncture the packing while a geometrically impaired wooden pallet can cause problems when storing.
- Wood Leaves Debris: A damaged wooden pallet leads to debris that can include splinters, sawdust, and It can contaminate edible items and litter the warehouse while also risking employees.
- Plastic Is More Durable: Although both types meet the same GMA specifications, plastic ones are more durable and sturdier.
- Plastic Is Non-Absorbent: Plastic pallets are a made of a non-absorbable surface which means it is easier to clean and devoid of bacteria or other micro-organism contamination as wood.
If you’re ready to make the switch to plastic pallets, contact PTM Solutions. We specialize in durable pallets that are made up of completely recycle plastic. In fact, we collect more than 14,000 tons of plastic materials each year. Get in touch with us to see which type of pallet is right for you!