3 R's to Saving Money with Pallets

3 R's to Saving Money with Pallets

Even though Slate magazine referred to the pallet as “the single most important object in the global economy,” the humble pallet has long been marginalized – perhaps because it is ubiquitous in shipping and supply chains. In fact, a report by Freedonia Group predicts continued growth in the use of pallets, with a 1.9 percent increase in the United States in 2019 expected to bring the total number in circulation to more than 2.5 billion units.

Whether or not you agree pallets are the most important object in the world economy, there’s no denying their importance. Even so, they’ve often been looked upon as expendable. This attitude has changed in recent years, as businesses have come to understand they’re more than just a means of conveying goods from point A to B.

Pallets can be, and should be, considered capital assets. As such, your pallet supply can be a means of profit and savings, if handled appropriately. Of course, conversely, they can be an inefficient cost center if not addressed wisely.

Reuse, repair, recycle

Every manufacturer, shipper and warehouse has different needs and operations. There are times when it makes sense to purchase and use one-way pallets. But increasingly, companies are looking to reuse their pallet supply. Aware of the waste in casting aside such a useful asset, reusing pallets provides companies with not only financial benefit, but also helps advance sustainability efforts.

Logically, the more pallets get used, the more wear they endure. Pallets can take a beating, which is why it’s important to consider that a cheaper pallet for sale may not ultimately be the least expensive choice. Cheap pallets that break down quickly could end up costing more to replace in the long run.

Quality pallets, on the other hand, can often be repaired to extend their lifespan, allowing them to get reused over and again. Simple pallet repairs can lead to big savings over time. Often these repairs can be made with parts from other damaged pallets as opposed to using new, more expensive wood. An important part of reusing pallets is having the experience and trained eye to know when a pallet is good for use, needs repair or needs replaced.

When pallets can’t be repaired or reused in circulation, a third option for saving (or making) money exists: recycling. Most pallets of any material (it’s estimated that 93-95% of pallets currently in use are wooden), including plastic pallets, can be recycled. When boards can’t be used to repair other wooden pallets, the remaining wood can be processed for items like mulch, animal bedding or certain types of fuel. A 2018 study by Virginia Tech found that over 95% of all wood pallets are recycled, and according to Nature’s Packaging, an estimated 474 million pallets were recovered for recycling in 2011 – a number that has likely skyrocketed since then.

Speaking of plastic pallets, it’s possible they – though more costly upfront – could save money over the long term depending on your specific supply chain. The plastic option is well suited for closed loop chains, where you get back all of your pallets.

A tactful analysis of your supply chain can determine if plastic pallets might be a viable cost-saving alternative for your company.

The best savings of all

While reusing, repairing and recycling can all help save and/or make money in your supply chain. The best proceeds come from a coordination and efficiency of all three. Like all underutilized business assets, such as vehicle fleets, facilities or even staff, inefficiency equals a poor return on investment.

Whether it’s wooden pallets or plastic, knowing how and when to buy pallets, reuse, repair or recycle is key to tapping the most benefit from your pallet supply. This task can be more complex than it seems, often demanding the needs of a specialized role – which is why outsourcing can frequently be the best option.

Consider further that the pallet industry, especially wooden pallets, is quite regionalized. This is despite an increasingly global economy, but because of the nature of pallets. They aren’t inexpensive to ship, and building pallets on one coast to ship empty to the other coast doesn’t make good business sense. As a result, getting pallets to and from suppliers can be a specialized task beyond the scope of general warehouse staff. If your company has a nationwide footprint, working with dozens of regional pallet suppliers or poolers becomes progressively cumbersome.

Thus, it pays off to have a third-party expert at maximizing savings and value from your pallet supply. Anyone can throw away a damaged pallet, but it takes expertise to know how to turn that damaged pallet from trash to cash. Well, OK, maybe not cash, but certainly savings in your supply chain.