BlogPallet PoolingManaging pallet inventory via pooling

It takes literally billions of pallets to keep supply chains in the United States moving. Hundreds of millions of new pallets are produced every year just to maintain the numbers needed to keep the stream of goods flowing from manufacturers to retailers and consumers. Even a single manufacturer or distributor deals with a huge number of pallets, and keeping track of them all as they come into the warehouse and are loaded with products and shipped to retailers is a substantial task.

In fact, managing pallet inventory is such a hassle that many companies do not even bother to do more than ensure they have enough pallets on hand to make a shipment. They treat their pallets as disposable, shipping them one way and foregoing retrieval. This treatment is understandable when the pallets being used have a short lifespan. However, many retailers are tired of receiving damaged stringer pallets and are demanding the use of more durable, higher-quality pallets in order to reduce product damage during shipping and make pallets safer to handle once they arrive. Walmart, for instance, demands products be shipped to them on high-quality block pallets that meet or exceed the highest Grocery Manufacturers Association (GMA) pallet grades. These sturdier block pallets cost too much to be thoughtlessly disposed of, and as a result, many companies are being forced to develop a means of managing a pallet inventory.

The Challenges of Managing Pallet Inventory

Pallets are simply a form of product packaging that make it possible to move products with forklift trucks. However, while products and product packaging make a one-way journey, pallets are capable of making a two-way journey; they can go from manufacturer to retailer, then back to the manufacturer for reuse. In order to reuse pallets in their inventory, companies should be able to arrange for the following to be implemented:

  • Recovery: The return trip a pallet must make to the manufacturer in order to be reused effectively doubles the transportation required to keep the supply chain running. Perhaps the bigger challenge, however, is the administrative work involved in keeping track of how many pallets are in each location and when enough pallets have accumulated at a location to make it worth sending a truck for retrieval.
  • Sorting: Once pallets have been returned to the warehouse or distribution center, the ones that are damaged will need to be sorted from the ones that are still fit for use as-is. Damaged pallets will need to be further sorted to separate ones that can be repaired from those that are too damaged to be used again.
  • Repair: Damaged pallets that can be salvaged will need to be repaired either by swapping out broken boards or by adding reinforcement. While this isn’t a complicated task, it requires employees who possess skills in the safe use of tools as well as appropriate wages, equipment, and a facility for doing the work.
  • Storage: Pallets are bulky, which means that safe idle pallet storage requires a large amount of space at production facilities or a separate storage area with transportation to bring pallets to where they will be used.
  • Disposal: Pallets that are damaged beyond repair must be properly disposed of. Typically, pallets at the end of their useful life are taken to the local landfill where dumping fees are based on weight. For an additional labor cost, nails and screws can be removed from the pallets and they can be ground up and used as mulch or wood filler.

In an internal pallet pool, pallets effectively become additional products requiring dedicated transportation and maintenance facilities.

The steps above demonstrate just how significant the costs of managing a pallet inventory can be. In an internal company pallet pool, pallets effectively become additional products requiring dedicated transportation and maintenance facilities. Providing these services is a large investment in both time and money that only companies that move huge volumes of products nationwide usually have the facilities to undertake. As a result, many companies continue to rely on stringer pallets, which are used once and discarded, ultimately wasting resources as well as money. The solution for many businesses is to contract with a specialized pallet pooling service that manages pallet inventory for them.

Outsourcing Pallet Management with a Pooling Service

Pallet depot with inventoryPallet pooling services specialize solely in pallet rentals and maintain a broad nationwide customer base and regional pallet depots for sorting, cleaning, and repairing pallets. Focusing solely on pallets allows pooling providers to more easily manage the administrative side of reusing pallets. Having a nationwide reach makes it possible to optimize the transportation side of pallet reuse. As a result, contracting with a pallet pooling service allows companies to enjoy the advantages of a pallet inventory without the administrative hassle and associated costs of running their own pool. Participating companies simply receive the pallets they’ve ordered when they are needed, while the pooling service handles the pallets’ transportation, repair, and cleaning. However, not all pallets–or pallet pools–are created the same.

Unlike wood pallets, which are made from individual wood boards that may break or come loose, plastic pallets have a unitized construction.

In the past, limited numbers and types of pallet pooling services existed. Most pooled pallets were wood block pallets that belonged to one of a handful of pallet pooling programs. Recently, however, new pallet pooling programs have emerged, along with new types of pallets. Companies are increasingly seeking engineered products with predictable dimensions and reliable strength in order to improve supply chain automation. Plastic pallets have emerged to fulfill this need–they’re stronger and more reliable than wood pallets, with predictable weights and dimensions. Unlike wood pallets, which are made from individual wood boards that may break or come loose, plastic pallets have a unitized construction. Because of their material and construction, plastic pallets do not use fasteners like nails and screws that can snag and damage products from the warehouse. As a result of these advantages, plastic pallets cause less product damage and make a more sustainable and hygienic platform than wood pallets. Perhaps even more importantly, new pallet pooling programs are distinguishing themselves with excellent customer service and responsiveness.

The iGPS pallet pool provides a high-quality GMA spec plastic pallet along with superior customer service. We meet your pallet needs using a network of depots across the U.S. and Canada.  Give our team a call at 1-800-884-0225, email a specialist at [email protected], or visit our contact page.