Pallets: Chaos in the food supply chain network

A food industry executive speaks out about pallets.

By ·

A few weeks ago, I received an e-mail with an attached article from Richard Kochersperger, the former CEO of a $300 million regional food distributor and a food industry consultant who focuses on supply chain issues.

He described a visit to a 1.2-million-square-foot food distribution center shipping more than 1 million cases of food a week. The facility, he wrote, was in great shape and the workforce was well-trained and highly motivated.

All the same, there was a glaring problem in red, white and blue: Pallets. He saw new ones and used ones, plastic ones and wooden ones, pallets that had been purchased and pallets that were leased from the big three, PECO, CHEP and iGPS.

Not only was there a variety of pallets, the distributor and others like it were allocating valuable dock space, dock doors and trailers, and time to sort the pallets for return to the pallet pool or a recycling center.

“The bottom line,” he wrote, “Stacks of pallets are everywhere taking up space, equipment and manpower.  None of the work is productive.”

Hence, the chaos on the dock, where all those pallets are collected, sorted and returned to the pallet pool facility. “It took the food industry 25 years to standardize on a 48-inch x 40-inch hardwood pallet, as a common platform which significantly improved industry productivity and performance,” Kochersperger wrote. “Now we have messed up the situation big time and it costs every company in the food supply chain a lot of money at a time when all food companies are searching for ways to squeeze out costs from the operation.”

What’s the best pallet? Kochersperger says that after he looked into the matter, he discovered that food manufacturers and distributors were anything but aligned in their preferences. Manufacturers preferred wooden pallets, especially pooled pallets, because they were cheaper, which was a benefit if the pallets never came back to them. Distributors, on the other hand, preferred plastic pallets because they are significantly lighter, reducing worker compensation claims; they enable the dispatcher to put more product on a truck; and they deliver more trips per life cycle than wood. 

When he tried to find out whether plastic was better than wood, whether wood was greener than plastic, which could work better in racks and which was the worst fire hazard, the consistent answer was: It depends.

His conclusion was that years after the introduction of the GMA, the food industry is ripe for a new, effective platform to ship product from the source to the final point of sale. “We need a complete supply chain solution because the piece meal solutions add costs,” he wrote.  “Representatives from every segment of food supply chain need to step up and work towards this common goal.”

That would be a pallet with RFID or another technology for tracking; one that can work in the full range of temperatures; one that is rackable; lightweight yet durable; and one that will work for years with minimal maintenance.

Kochersperger described the development of such a pallet as a major opportunity for the industry, one that would enable all players to share in the efficiencies to be gained. “This is a multi-million dollar issue that needs attention now,” he concluded.  “We need to stop the chaos that currently plagues the entire food supply chain network.”

Pallets and containers: A CHEP off the old block
More than a decade after entering the North American market, CHEP continues to be the leader in pallet pooling.

Pallets: Pallet pooling for the other guys
Upstart PECO Pallet brings competition to the pallet pooling market

Pallets and containers: The plastic pool alternative
iGPS offers pallets users an alternative to wood


About the Author

Bob Trebilcock
Bob Trebilcock, editorial director, has covered materials handling, technology, logistics and supply chain topics for nearly 30 years. In addition to Supply Chain Management Review, he is also Executive Editor of Modern Materials Handling. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.

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!

Latest Whitepaper
Your Guide to Voice for the Warehouse
Is voice a good fit for my operation? How would voice work in my warehouse? With the help of the Vitech Guide to Voice, you can find all the answers to your voice questions in one place.
Download Today!
From the October 2017 Modern Materials Handling Issue
An early adopter, Rochester Drug Cooperative is using robotic piece-picking technology to complement picking of slow-moving items. System report for Rochester Drug Cooperative, Robotic picking and inventory management, Innovative distribution center robotics solutions , IAM Robotics case study
Injecting agility into WMS implementation
The Big Picture: Business as Unusual
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
The State of the DC Voice Market
A lot has changed in the last 10 years, especially in voice technology. This webinar will cover the state of the voice market, review two leading voice solutions and help you gain a better understanding of the options and capabilities available today.
Register Today!
EDITORS' PICKS
Rochester Drug Cooperative: Robots ready for work
It’s still early stages, but Rochester Drug Cooperative is proving that mobile robotic piece...
Manufacturing Day: 2,716 events from Hawaii to Alaska to Puerto Rico
Events to be scheduled throughout the month, so the remaining 249,185 manufacturing firms in the...

System Report: Pouch sorter powers Stage’s fulfillment needs
How a hometown department store chain transformed its e-fulfillment processes with pouch sortation...
Cubing and Weighing Equipment: Measure Up
The use of cubing and weighing equipment is growing beyond dimensional weight applications.