Millions of pallets are manufactured every year, and all of them require replacement or repair. This is a major issue for distribution and manufacturing facilities that require huge volumes of pallet inventory but do not desire the overhead costs of their upkeep and repair.
The solution is pallet hire, especially pallets that can be reused, such as plastic pallets. Pallet hires or pallet pooling are a mode used by such high-volume operations to lease and use pallets without the problems associated with actually owning the pallets.
Pallet pools are systems with closed-loops wherein pallets are returned to the original manufacturers after they are used. It is the manufacturer's responsibility to conduct all maintenance and repairs of pallet inventory. Of course, the benefits of pallet pools come with a price premium.
In brief, the main benefits of plastic pallet pooling are as follows:
● Guaranteed delivery of pallets.
● Pallets are strong and meet all needs.
● No need to incur direct costs of repair.
● Makes the processes of logistics and purchase simple.
In detail, the following are the advantages of pooling plastic pallets all the way down the supply chain:
Like in most industries, associated costs are always passed down the supply chain. Hence, savings can also be passed down. Pallets also have associated costs.
The pallet costs can cover the costs of initially buying the pallets, their maintenance, replacement, and transport. The higher they are, the more expensive will be the handling of goods. But there are prospects for savings.
The first savings can be made on materials utilized for pallets. Plastic pallets are highly cost-effective. When one switches to pallet pooling, it implies less need for replacement because plastic pallets are strong. Such savings can be passed on after coverage of initial investment.
The second savings from pallet pooling is when the pooling company rents out pallets on a short-term or long-term basis, they also deal with their management and maintenance. Hence, the hiring company enjoys much savings. The latter does not need to cover the costs linked to managing and maintaining a fleet of pallets. As such, the company saves money.
Hygiene and safety
Mass transport of goods can lead to accidents and damages impacting both people and goods that involve a major cost. However, when the right pallets are used, this cost can be eliminated.
Plastic pallets do not have nails and other protrusions or splintering. It is also easy to disinfect plastic pallets, making them highly hygienic, particularly to transport medicines and food items. Plastic pallets are thus low on maintenance costs. The maintenance part will be taken care of by the pallet pooling company.
Because of the ease and low cost of making single-use pallets, it has been tough to standardize their dimensions and size, leading to problems in their transport and handling. Problems and disruptions cost money.
But this issue can be overcome by using reusable pallets. Since they need specialist manufacture, they can be easily regulated and monitored as per their dimensions and size. By standardizing their features, they become less problematic and cheaper to work with.
Impact on environment
One of the ways in which pallet management can prove beneficial for the complete supply chain is by its impact on the environment. This is a rising issue in the transport industry. Savings can be made by dealing with both management and the use of materials.
By switching to reusable pallets, there will be a lesser need to make more pallets overall. The reason is that these pallets endure for a long time and do not need to be replaced as often as single-use pallets. Also, after the replacement of a pallet, it can be recycled without choking the landfill.
When one switches to pallet pooling, fuel bills can be cut down along the chain of supply. The reason is that pooled pallets, though strong, are not as heavy as single-use pallets. When the load is lighter, the fuel bill is lower, and the savings are much more.
There can be more environmental savings when companies switch to pallet pooling instead of using their own pallets. The reasons are that pallets may be in use only in the busy business seasons and may lie dormant the rest of the year. When many companies do this, it adds up to a huge number of unused pallets. Through renting pallets, companies will not waste money by drawing them from a reusable fleet for renting. Pallets that remain from the downtime of one company can be utilized by another company in their busy season.
In sum, though pallets stand for a small product for the logistics industry, their massive number makes them very important. Benefits of plastic pallet hire can transfer cost savings along the chain of supply to the retailer as well as the final consumer.