Pallets: Is a global pallet in your future?

If you’re in the wholesale food and grocery industry or ship to a big box retailer, chances are good that you ship on a 48-inch x 40-inch pallet. The GMA, and its equivalent from CHEP, PECO or iGPS, has been the king of the pallet hill in North America for decades.

But could the increasing globalization of business bring an end to the GMA’s reign? And if so, what should a pallet user do next?

The catalyst behind those questions is the inherent inefficiency in the way most companies handle containerized imports today, says Marshall White, president of White and Co., (http://www.whiteandcompany.net) a unit-load design and consulting firm.

“We are a significant net importer of goods, with a lot of product coming into this country,” says White. “But, we don’t have many pallets coming into the country. Most of what we receive is floor-loaded in containers.”

That has an impact on receiving efficiency. White points out that it takes four to eight hours to unload a container by hand. Floor-loaded containers also consume a lot of dock space. Meanwhile, we can unload a palletized container in 30 minutes or less. “Yes, you lose some cube in the container if you palletize, but that is more than offset by the efficiency you gain in unloading,” he says. “So, I think it’s predictable that a lot of pallets will flow into the country under load.”

The leads to another question: How do we handle this change?

That’s where the design of the pallet comes into play. The grocery, beverage and big box retail supply chains are largely optimized around the standard 48-inch x 40-inch pallet design. Likewise, many automated materials handling systems already in place were engineered to work with a 48-inch x 40-inch pallets. Most of the pallet jacks in use work with a stringer that’s 3.5 inches tall.

The problem is that the 48-inch x 40-inch pallet is not the standard among our current trading partners in Japan, Korea, China or Europe, where they have their own set of standards. “Our ability to influence them on pallet design is probably limited,” says White. That’s a challenge since so many companies try to reuse the pallets they receive: The odd sizes may not work as well in the systems we already have in place.

What’s more, a 48-inch x 40-inch pallet only optimizes the space in a standard shipping container if it’s pin-wheeled – loaded from the side. That works fine with a block pallet like those used by pallet pooling companies like CHEP, PECO or iGPS. But, those pallets are more expensive. It’s more difficult with the standard GMA design.

Last, to really optimize the space inside the container, you need a pallet with less than a 3.25-inch height. But, that would require new dock equipment.

What are the takeaways?

1) If you’re importing merchandise from overseas, you need to begin to rethink your pallet design. “You need to realize that labor rates are increasing in China and India, and eventually, they will increase in non-industrialized countries as well,” says White. “Increased labor costs are going to drive palletization.” Beyond the cost of labor, White urges pallet users to also consider the cost of the additional loading dock space and repalletizing.

2) Consider a block pallet design. Although a block pallet may cost more up front, White believes it’s a more versatile design that will result in savings over the long run for companies that receive product from overseas. He adds that several big box retailers are already looking at this issue for their operations.

3) Think about your dock equipment and whether you can migrate to a lower height pallet that would use lower profile pallets.

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