The Humble Pallet
The humble pallet
In Promtel’s warehouse it is king. When storing goods at height in a warehouse, a good sturdy pallet is vital.
Some people regard the pallet as the single most important piece of hardware in the supply chain. Almost every object in the world requiring transport will, at some time or another, be moved on a pallet. Be it the strong sturdy hardwood variety of rented CHEPs and LOSCAMs, the plastic pallets often used for international shipping (no need for fumigation of timber on arrival) or the flimsy, single-use only-for-one-way variety, for movement of items around the world, pallets are a fundamental component.
Where did pallets originate?
The invention of the gas-powered forklift in 1937 strongly influenced the dominance of the ‘standard’ pallet, though standard is quite a loose term here. Standardisation is discouragingly lacking when it comes to pallets. This is surprising given the abundance of global shipping, There are no less than six different standards recognised by the International Organisation for Standardisation (ISO). There are also the inches -v- millimetres contradictions in sizing and suitability.
Shipping containers are built to a US customary standard, 20 feet and 40 feet, but European pallets measure 1000mm x 1200mm. Japan, on the other hand, has a standard 1100mm x 1100mm and then there is the Australian CHEP pallet, which is standard at 1200mm x 1200mm. Throw in the smaller skids and various made-to-fit-the-product single use (or one-way) pallets, and you have a potential problem when attempting to maximise the quantity of products that can be loaded into a container for global shipping.
The influence of World War II
A major factor in the rise of the pallet when shipping goods was World War II. For any military campaign to be successful, logistics cannot be overlooked. Historians have long agreed that logistics was in fact the untold story behind most successful military campaigns. The sturdy pallet played an enormous part in the world’s first truly global war, WWII. Rick Le Blanc in Pallet Enterprise notes ‘the use of the forklift trucks and pallets was the most significant and revolutionary storage development of the war’. Many millions of pallets were used, especially in the Pacific. Goods were shipped almost exclusively in bulk, due to the long supply chain.
Norman Cahners, a sailor with the American Navy during WWII, invented the four-way pallet. He was looking at ways to improve turnaround times for materials handling. Cahners’ design helped to revolutionize the shipping of supplies during WWII. The new design, which was a relatively small departure from the original, doubled material-handling output by allowing forklifts to pick up pallets from any side.
During WWII many hundreds of thousands of US soldiers were deployed in Australia. Another time I might talk about how that was for those soldiers, here to fight and die for us. At that time our White Australia Policy was in place. We were happy to have these brave men here. However, our Government asked politely if they could please make sure that the black soldiers did not frequent the inner-city areas of our major capitals. It might upset the (largely white city population of) locals. Their commander, General Douglas MacArthur eventually came to Australia and took our Prime Minister to task about our dreadfully racist attitude. But I digress. Pallets!
After the War in the Pacific was over the US Military left behind much of the equipment it had been using in Australia. There were many forklifts, cranes and over 60,000 pallets. The Australian government created the Commonwealth Handling Equipment Pool – CHEP to manage these resources. Users rented the pallets and CHEP took care of maintaining, delivering and retrieving them. This system is still in use today.
Maxing the Cube
Goods are shipped around the world in enormous numbers. Changes in population growth and the rise of the global economy are largely responsible for the shift in the way humans expect to obtain goods. eCommerce is the new normal. This constant movement of items around the planet has led to the need to ‘max the cube’, or ‘make sure every square metre of space is filled’. Thinner pallets now come into their own, but of course any pallet design change means changes down the supply chain line. How can companies with thousands of standard racks, built for existing pallets, re-invent the way they store incoming products? Retrofitting would be hideously expensive. These are challenges that many companies now face.
Ikea
Two such companies are Costco and Ikea. Both of these enterprises adjusted. Ikea abandoned wooden pallets in favour of a low-profile system called ‘Optiledge’. It is a system of cartons stacked onto little ledges with feet and held together with a giant band around the whole lot. One of the many benefits of this system is that the little ledges fit to the edge of the carton being shipped, whatever size the carton happens to be. No more requirement to make the shipping carton fit the size of the pallet. The ledges themselves are for one-way shipping and are completely recyclable at the end of their journey.
A truckload of Optiledges replaces 23 truckloads of pallets. That’s the great news. The not-so-great news was that once the flat-packed items were delivered to the store they needed to be put onto metal shelving. They could not be immediately lifted onto existing racking with a forklift. Ikea stores were re-fitted with additional shelving at great cost to the company. In Europe alone more than 500,000 new metal shelves were installed. The ongoing savings are significant and have justified the pain of change.
Costco
Costco has shifted to using ‘block pallets’. These pallets are essentially an improvement on the ‘four-way’ pallets invented during WWII. The pallet decking boards rest on sturdy blocks rather than long cross boards (these are known as ‘stringers’). This makes the pallets even easier for forklifts. They are also much easier for a person using a pallet jack, as there is no impediment (the stringers) to moving the pallet jack under the pallet at an angle.
Costco warehouse workers could not fit the long pallet jack forks into pallets if they were facing the wrong side. They would have to twirl the pallet around (think of that scene in the Austin Powers movie with the golf cart trying to turn around in the tunnel). When you consider that Costco staff members unload over a million trucks a year, you can see that small things can lead to enormous changes in efficiency.
Cost Effective Decisions – What price?
That, again, is the good news. The bad news is that block pallets cost more to produce than the existing stringer pallets. I have noticed that an inferior, one-way style of block-skid has begun to appear. These skids allow for good approachability by pallet jacks and forklifts, but the ‘sturdy blocks’ underpinning the decking surface are anything but sturdy. They are held together with staples, are made of some kind of spongy material and rarely survive beyond their journey in the container. The outcome is that many businesses, including my own, are saddled with finding useful ways to recycle these now useless items.
Pallet redundancy?
The pallet may slowly lose its place as the necessary giant of logistics supply chains. Changes are sweeping the world regarding how we shop. We now order units into our homes in small numbers. Bricks and mortar stores are on the decline and may no longer require pallet deliveries. This is sometimes known as ‘The Amazon Effect’. The Internet shopping standard impacts supply chains in a big way.
So far, however, there is no evidence that global pallet usage is demonstrably on the decline. I recommend reading Charles Fishman’s ‘The Walmart Effect’ to see what is happening in the USA with regard to bulk display and purchasing. Let’s wait to see what happens as Internet shopping becomes more mainstream globally. I believe we have even more interesting times ahead.