Pallets are here to stay
Think the pallet is headed for the landfill in the sky? Think again. Pallet use is not only pervasive but growing, according to our biennial survey of pallet users.
By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 6/1/2002
Catalogs, the Internet, and other direct-to-consumer channels of marketing were supposed to be the death of the wooden pallet.
After all, who needs a pallet to ship a sweater, VCR or CD one at a time by UPS, Federal Express or the post office?
And let's be honest: Few users would shed a tear over the demise of the pallet. They're tough to get when you need them. They clutter up the dock. And then you have to pay to get rid of them.
Yet, after more than 50 years, no one has come up with a
more economical, useful or versatile alternative to the pallet for shipping
product from point A to point B.
That's why despite all the complaints about pallets, most users expect to buy the same number or more as they're using now in the coming years.
That's one of the most important findings of a recent online survey of Modern Materials Handling readers on pallet use.
We heard from 425 materials handling professionals representing more than 15 vertical industries, including electronics, food, metals, automotive, consumer goods, apparel and the furniture industry.
We asked for their opinions about buying and using pallets. What types are being used, and for what applications? What criteria are important in their selection and purchase of pallets? And what are the advantages and disadvantages of using wooden and plastic pallets? Here's what they told us.
Pallets on the risePallets are still one of the most widely used materials handling tools. Nearly 96% of the respondents use or plan to use pallets at their current location. That is a significant increase from May 2000, when we last did the survey. Then, 88% said they were using or planned to use pallets.
What's more, they use a lot of pallets. More than a third of our readers buy more than 10,000 pallets a year. Nearly 16% purchase 30,000 or more a year, an average of more than one truckload per week.
Finally, the number of pallets in use is increasing. More than half of the respondents now use more pallets at their location than they did five years ago. Of those, 42% have increased their usage by 10% to 20%. Only 13% of those responding have reduced the number of pallets in their operations.
Despite a move towards more single item and parcel shipments, which don't require pallets, we expect the upward trend to continue. In fact, 53% of respondents expect the number of pallets they're using to increase over the next five years. Only 10% expect to buy fewer pallets in the next five years.
Got wood?Although many alternatives have been tried, wood remains the most common material for pallet construction. Eighty-six percent of those answering use wooden pallets.
Plastic was a distant second at 8.7%. While that figure seems slight, it does show the inroads plastic pallets are making in the market. In 2000, plastic represented just 4% of pallets purchased. They were just 2% of the pallet market in 1997. What those figures suggest is increasing use of plastic pallets in applications where the performance of plastic offsets the initial cost of plastic pallets.
Rounding out the field were wood composite (2.1%), cardboard and corrugated (1.7%) and metal (1.5%).
Performance, availability, price
What are the most important characteristics when selecting pallets? We asked respondents to rank 13 characteristics, from pallet availability to durability to purchase price, based on whether they were: very important, important, somewhat important; or not important at all.
The three most important factors for wooden pallets were the strength of the pallet, ranked as very important or important by 92% of those responding, followed closely by availability (88%) and price (87%).
What are the least important considerations when purchasing a wooden pallet? Only 26% of respondents thought the fire rating of pallets was an important or very important consideration, and only 38% gave serious consideration to the repairability of their pallets. Users, it seems, want to ship them and forget about them.
Plastic pallet users had similar concerns. The three most important considerations in the selection of plastic pallets were the durability, or longevity, of the pallet, ranked as very important or important by 73% of those responding, followed closely by strength (70%) and price (67%).
If you think about it, those findings make sense: Given the high price of plastic pallets, users apparently want to be sure they're going to last long enough, and have the strength to perform, to recoup the investment.
The least important factors when purchasing a plastic pallet? Only 31% of respondents thought the fire rating of plastic pallets was an important or very important consideration, and only 32% gave serious consideration to the repairability of their pallets. Since plastic pallets are typically used in captive systems, that lack of concern may be a testament to the durability of the products.
VersatilityWhy are pallets still so widely used?
One reason is versatility. The vast majority of our readers, 82.2%, use pallets for both warehousing and shipping. Just 10% use their pallets only for shipping, while 7.8% use them only for warehousing.
What's more, pallets are durable. While 24% of those responding use their pallets for one trip or use, more than half get 2 to ten uses out of their pallets. Nearly 17% of those responding say they got up to 20 uses from a single pallet.
Globalization is also a trend driving pallet use: 40% of respondents use pallets for export.
Rent or buyNearly 70% of our readers get more than one use out of their pallets, so you would think that pallet users would be interested in pallet repair, recovery and leasing programs.
Surprisingly, that's not the case. Despite the high cost of owning and disposing of pallets, only 20% of respondents participate or plan to participate in a pallet rental program, (where users pay for the number of trips a pallet makes) or have instituted a pallet retrieval and repair system to extend the life of their pallets.
Those who participate do so for many reasons, including the elimination of pallet disposal issues (56%), lowering the cost of their pallets (51%) and complying with a customer requirement (43.8%).
On the other hand, 32% say they aren't interested in pallet rental or pallet repair, and 11% have never heard of those systems.
When you consider how many respondents used their pallets in multiple applications, pallet repair and leasing programs may represent another area of potential savings for pallet users who take the time to investigate the advantages.
So there you have it. At the end of the day, the pallet is still royalty in materials handling and will reign for years to come.

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