Pallet Survey: The pulse on pallets
Block or stringer
In January 2011, Costco became the first retailer to require its suppliers to ship product on block pallets, which are similar in design, construction and quality to the pallets available from CHEP, PECO and iGPS. In this survey, we wanted to see if the Costco requirement is having an impact on the pallet market.
We discovered a couple of facts. As with the new versus used question, block or stringer isn’t an either/or question. Yes, more than half (53%) of readers are shipping solely on stringer pallets and 24% are shipping solely on block pallets. However, another 23% are shipping on block and stringer pallets in equal measure. In other words, a significant percentage (47%) is shipping some loads on block pallets.
Second, among the respondents, more than half are shipping to major retailers, big box store operators and grocery store chains. Of those, 33% ship to Walmart, 26% ship to Costco, 24% ship to a major grocery chain, and 21% ship to Sam’s Club. Readers are also shipping to other major retailers such as Target, Home Depot, Lowe’s, Walgreens, JCPenney and Macy’s.
A significant percentage of all readers (82%) report that no customer required them to change the type of pallet they were using for shipments in the past year. However, nearly 19% reported that they had changed their pallet usage in response to a customer requirement.
Of those, 31% say that they are using more block pallets and 54% say they are using alternatives to wooden pallets. Only 15% are using more stringer pallets in response to a customer requirement. In other words, while a relatively small number of respondents have been asked to change the type of pallet they are using, most have switched away from stringer pallets.
Asked what type of business is requiring them to change the type of pallet they are using, 41% responded that it was a retail customer, 34% a manufacturing customer and 26% a wholesale customer.
For now, Costco appears to be one of the few companies planning to require its suppliers to ship on block pallets. Only three readers from our survey indicated their company was considering a similar strategy.
Get into the pool
Pallet pools have long been an alternative to purchasing new or used pallets. That has been true whether participation in a pool involved renting a pallet from CHEP, PECO or iGPS or a company managing its own assets. The latter is common among auto suppliers, food and beverage manufacturers, and the pharmaceutical industry that reuses plastic pallets.
Looking forward, it appears as if most companies plan to continue whatever strategy they are currently pursuing. Only 17% of readers said they are likely or highly likely to participate in a pallet pool in the coming year.
Of readers who would consider participating in a pallet pool, 41% reported that they would explore creating or managing their own pool; 28% said they have already evaluated or considered creating or managing their own pool.
Finally, we asked how interested are readers in using a pallet pooling service managed by the pallet industry as an alternative to established pools managed by CHEP, PECO and iGPS.
Roughly 14% indicated they are interested or highly interested. And, 66% indicated that they are not very or not at all interested.
That could indicate that the pallet industry needs to do more work to educate readers on what it may offer and how they may benefit from a new pool.