November 2010 | Commentary | Green Landscape

Pallet-Sharing Programs: Better for the Planet

Tags: Green Logistics, Materials Handling

Hillary Femal is director of marketing, IFCO Systems. 813-463-4124

When evaluating a pallet program against your operational criteria— including environmental concerns— the best result comes from looking at the issue in two parts: the pallet itself, and the pallet program.

The pallet’s source material, production method, size and specifications, and impact on transportation efficiencies has received much attention and discussion. But the pallet program— the way in which pallets will be delivered to production and retrieved after final sale— can have an even greater impact on the environment.

For shipping and receiving, there are three basic types of pallet programs:

1. Single-use or one-way programs. In single-use pallet programs, new, lightweight pallets— typically made from cardboard or thin wood— are delivered to production facilities for use in shipping “one way”— downstream to a retailer or final customer. Once a retailer finishes using the pallet, it is disposed of, which results in landfill waste. And because a new pallet is required every time, more natural resources are consumed.

Of the three programs, one-way programs are the least environmentally friendly. The material waste, combined with the expense of purchasing new disposable pallets for every shipment, is why one-way programs comprise only a small percentage of the market.

2. Extended-use or buy/sell programs. Buy/sell programs utilize extended-use or reusable wood stringer pallets, which are sold to manufacturers then repurchased back from retailers by a local pallet-management facility prior to being either repaired and reissued or recycled. Local repair and reuse of wood stringer pallets minimizes transportation, fuel use, and emissions, offering sustainability advantages over pallet leasing.

Because of this pallet management companies network, the extended-use whitewood pallet exists in an “open pool.” Thousands of pallet recyclers buy/sell pallets and independently integrate to create the most comprehensive retrieval network in the world, continuously recycling and reusing the pallets.

This model blends attributes of both pooled and single-use pallet models: it capitalizes on extended reuse like leased pools, but at the same time features a change in ownership of the pallet like single-use models. For these reasons, the reusable stringer pallet model reduces both costs and environmental impact.

If, after repurchase from a retailer, a pallet cannot be repaired and reused, its components are recycled for use in repairing other pallets, or the wood is ground for use as mulch, animal bedding, or wood-stove pellets.

3. Leasing or rental programs. In pallet leasing or rental programs, pooled plastic, metal, and wood pallets are leased to customers. After use, pallets that have not been lost are transported to a central depot for storage until they can be redeployed to another customer elsewhere in the country. This travel across long distances increases fuel consumption and greenhouse gas emissions.

Due to their heavier construction, pooled pallets require a more expensive and less environmentally friendly repair and disposition process. This is because component-level repair is not always feasible, particularly with plastic and steel pallets, thus the replacement of damaged pallets equates to unit-level replacements. More repairs mean greater expense and more resources used.

Pallets are an integral part of nearly every supply chain, and the programs through which they are obtained and retrieved can have significant impact on our environmental footprint.