IKEA to phase out wooden pallets

Home furnishing retailer says it can save millions in transportation costs.

By ·

Costco is not the only major retailer to take a hard look at its pallet program. Last month, IKEA, the iconic Swedish home furnishings retailer, announced that it will phase out wooden pallets on a global basis. Wood will be replaced with a shipping platform IKEA is calling the material area paper pallet.

“The objectives of this change are to decrease costs and create a more sustainable business by having less impact on the environment,” IKEA explained on its website. “This change will impact all functions within supply chain as well as all stores and suppliers in Europe. For example new handling and storage solutions need to be installed in store racking and supplier plants need to rebuild or adapt the packaging lines in order to use of alternative handling material.”

IKEA has been experimenting with alternatives to wooden pallets for several years now. Modern described how IKEA was using three standard, unique pallets at its operations near Savannah, Georgia as well as the Optiledge, a unique, recyclable plastic shipping platform that makes more efficient use of the space inside shipping containers.

According to a report from Rick LeBlanc of PackagingRevolution, the elimination of wooden pallets will “involve the upgrading of IKEA’s racking storage systems through the company to support unit loads built on paper pallets and the [plastic] Optiledge system.” LeBlanc added that “IKEA believes that it will achieve better fill rates in ocean containers and trucks.” Other reports indicate that IKEA believes it can save $193 million a year in transportation costs.

Both Costco and IKEA are examples of how leading companies are looking beyond the low hanging fruit for the next round of cost savings. They are also examples of the importance of a continued focus on the basics of materials handling that many companies take for granted.


Subscribe to Modern Materials Handling Magazine!

Subscribe today. It's FREE!
Find out what the world’s most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today!

Article Topics

Costco · IKEA · Packaging · Pallet Report · Pallets · · All Topics
Latest Whitepaper
Evaluating Goods-to-Person Technologies
This white paper overviews the various, self-contained, goods-to-person AS/RS systems available for handling the totes, cases and eaches most frequently faced by e-commerce order fulfillment operations, and the typical applications for each.
Download Today!
From the May 2017 MMH Issue
Every company considers itself an innovator. It’s time to include materials handling leaders in that category.
Top 20 Worldwide Materials Handling Systems Suppliers 2017
ERP Suppliers’ Changing Role
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2016 Warehouse/DC Operations Webcast: Confronting omni-channel complexity
During this webcast we’ll examine the current activities, trends, and best practices in warehouse and DC operations management and how companies plan to address complex issues associate with omni-channel fulfillment.
Register Today!
EDITORS' PICKS
Materials Handling Innovation (and why it matters)
Every company considers itself an innovator. It’s time to include materials handling leaders in...
Thrive Market’s Startup Distribution Network
How does a fastgrowing, e-commerce startup company build out order fulfillment capabilities? Thrive...

U.S. Roadmap for Material Handling & Logistics: Version 2.0 released today
On Tuesday, the U.S. Roadmap for Material Handling & Logistics: Version 2.0 will be released on...
2017 Productivity Achievement Awards
Modern’s annual Productivity Achievement Awards honor companies that have made exceptional...