Modern Materials Handling - October 2011

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MODERN special reportnumber has gone down, but thepallet industry is cyclical andthat number is going to fluctuate,he says.Pallet rentalAnother interesting point thatcame to light in this year’s palletsurvey is the increase in thoseconsidering certain pallet rentalsystems.Last year, 48% of our respondentsusing pooled pallets weremanaging their own pools. Thisyear, that number is down to35%, and respondents say theyare considering a helping hand.(Interestingly enough, readerstell us that the top reasons foroutsourcing pallet handling andrepair are the same reasons forkeeping it in house—cost effectivenessand convenience.)<strong>Modern</strong>’s survey included anumber of companies that lease, repairor manage pallet pools, including CHEP,IFCO, PECO, iGPS and Ongweoweh.Among them, CHEP saw interest and/or participation in their business jumpfrom 22% last year to 43% this year.While the increase wasn’t as dramaticfor the others, up is up.One reason for the increased interestcould be due in part to new guidelinesissued by big box retailer Costco.Last year, the company mandatedthat all by the end of2010, all deliveries must arriveon a four-way entry block stylepallet. This style of pallet has atrue four-way entry that makesit easier to unload and handlethe unit load, which ultimatelyenhances efficiencies.However, it’s more challengingto manufacture than the basicstringer style pallet and alsomore expensive.So, rather than buy moreexpensive pallets, end usersare considering the jump intoa pallet rental pool with palletslike those offered by CHEP,What type(s) of pallets are you not usingbut may consider for future use?Cardboard/CorrugatedMetalPlasticWood (new)Wood (used)WoodcompositeNo change11%9%7%4%9%3%7%4%12%12%23%21%Source: Peerless Media Research GroupPECO and iGPS. This option couldprovide cost savings for some operationsand ease the constant pressureto lower expenses by collaboratingwith vendors who can become partnersand focus on part of the operationthat is not directly connected with itscore competency. Simply put, as onerespondent said, “We are not in thepallet repair business.”But some companies are in the pallet2010<strong>2011</strong>59%62%What do you believe will be the primaryreasons for future changes regardingyour pallet usage?#1 Cost/Price#2 Durability/Better quality#3 Customer requirements/Demands#4 Increase in exporting and regulations#5 Increased sales/Business/SKU growth#6 Green/Eco-friendly#7 Availability by type of palletSource: Peerless Media Research Grouprepair business, which isgood news to nearly twothirdsof survey respondents.Of the readersusing wooden pallets,60% use a third party orpallet recycler to maintaintheir pallets, while28% sort and repair theirpallets internally.Wood wins, plasticplacesRegardless of who ismaintaining the pallets,it’s clear that wood continuesto be the overwhelminglydominantmaterial of choice inthe market, with 95%of respondents reportingthat they use woodenpallets at their facility.And within that figure,according to Scholnick, about80% of the wooden pallets in circulationtoday are reused. Over the pasttwo years, 32% of respondents say theyhave acquired more used wooden pallets,and that same number has plansto acquire more used wooden palletsfor their operation. Only 17% reportan expectation of using fewer usedwooden pallets in the next two years.While wood is the winner, plastic isgaining some traction.Thirty-nine percent ofour readers say that theyuse some plastic palletsat their location, comparedto last year’s 33%who said they use someplastic pallets. And, ofthose not currently usingplastic, 21% say theywould consider usingplastic pallets in thefuture.When consideringwood pallets, readerstold us the most importantconsiderations continueinclude the follow-28 O C T O B E R 2 0 1 1 / MODERN MATERIALS HANDLING mmh.com
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Modern Materials Handling - October 2011

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