
Whitewood Under Siege: Wooden Shipping Pallets - drjohnson
http://www.cabinetmagazine.org/issues/52/hodes.php
======
MisterBastahrd
Note: I worked for a large grocery chain for 7 years

Plastic pallets are vastly superior in the long run to wooden pallets in terms
of durability, and many companies have used them for almost two decades
interchangeably with wooden pallets. One of the issues here is that once a
pallet enters the supply chain, who knows if or when you'll get them back.
When I first started working for the grocery chain, there were over 30 pallets
of back inventory sitting in the warehouse (this is a very bad thing and I
corrected it during my time with the company).

The main problem with wooden pallets is that they are largely made with
inferior wood that can't stand up to the stresses applied to them for a long
period of time. If any of the center slats break, there's no problem. If one
of the ends break, then you're probably going to be cleaning up a warehouse
floor from whatever was on the pallet. People are also more likely to walk
away with a wooden pallet since they have plenty of utility and are very
inexpensive.

That isn't to say that plastic pallets are without fault, even if they are
virtually indestructible. Most plastic pallets are manufactured with a diamond
plate pattern. That's nice and all, but it's still plastic and therefore,
slippery. Place some frozen or refrigerated food on a pallet destined for a
windy area and have fun cleaning bananas out of the back of the truck.

So the best of both worlds would be a plastic pallet with a non-slip coating
on the top of the pallet and the feet.

~~~
stephengillie
I also worked in the grocery industry for most of a decade.

My sister worked for local fast food and general retail chains (Taco Time &
Target) and I was always amazed at the lack of palletization they used. Target
especially.

Target sends several trucks a day to each store. Each truck is half-full, and
half of that freight is simply "stevedoered" into the truck, not put on
pallets. So emptying a truck is a several-hour process of moving individual
boxes of merchandise out of a truck by hand. What pallets they do use are
often poorly stacked (by retail grocery standards), not well wrapped, and
often fall over in transport.

Wal-Mart, by comparison, looks to have embraced the same "CHEP-only" policy as
Costco.

~~~
batmansbelt
What's taco time?

~~~
Kluny
An inferior version of Taco Bell, often found in Canadian food courts.

~~~
stephengillie
It's really strange to hear you describe one as inferior when they barely sell
the same food. True, they both sell food based around Mexican staples of corn,
beans, tomatoes, spices, and meat, but that's as far as the similarities go.

Taco Bell has trouble proving that up to 35% of its beef comes from cows:
[http://sanfrancisco.cbslocal.com/2011/01/24/lawsuit-filed-
in...](http://sanfrancisco.cbslocal.com/2011/01/24/lawsuit-filed-in-
california-court-over-taco-bell-beef/)

Taco Time's ground beef isn't even frozen:
[http://www.tacotime.com/menu/](http://www.tacotime.com/menu/)

~~~
shawnz
> Taco Bell has trouble proving that up to 35% of its beef comes from cows

Actually, Taco Bell had no trouble at all proving that their beef met the
standard, and the suit was dropped pretty quickly.

See: [http://www.reuters.com/article/2011/04/19/us-lawsuit-
tacobel...](http://www.reuters.com/article/2011/04/19/us-lawsuit-tacobell-
idUSTRE73I42U20110419)

------
dustin1114
I've worked in grocery logistics for several years, and can tell you from
experience just how political CHEP, PECO, and iGPS pallet distribution can be.
Because of the size of my organization's warehouses, CHEP especially requires
stringent audits, and if a truck sent out with CHEP when it was not supposed
to, the gestapo comes after you.

I will admit, though, that CHEP are the best when it comes to quality (other
than iGPS, perhaps). They are far less likely to have splinter, warp, and
degrade. They are also much more resilient to the abuse that the supply chain
puts on them.

An important point to remember is automation. The logistics industry is
becoming more and more automated. Consistent, high quality pallets are
becoming a must. The typical hi-lo is becoming less and less common, while in
its place are robotic automated guided vehicles, distribution conveyors, and
high-bay storage and retrieval machines. I know from experience how much pain
and frustration is caused by broken stringers, splinters, and warped whitewood
(in our industry, we call them GMA pallets [Grocery Manufacturers
Association]]. Literally days of lost time annually, which can equate to
millions of dollars.

I have no real opinion about what the best direction is. You either fork out
more up front for the good stuff (with all of its politics), or you just deal
with the bad quality and inconsistencies of whitewood.

I have to say, this was a very interesting article...a nice change from Python
2.7 vs. 3.X!

~~~
gig3m
Disclosure: I run one of the largest wooden pallet manufacturing companies in
the United States. My family has been in this business for 50+ years.

Your perspective on whitewood comes from a 3rd tier perspective (grocery, as
you say). In other words your various suppliers buy their pallets from various
sources and then ship their product into you on those pallets. You and your
(former?) employer are not directly involved in their procurement so you have
little say in what you get, and I'm sure the quality varies widely.

That being said whitewood pallets (or just wooden as we would say) are
actually a very cost effective and reliable way to ship product in the US,
much more so than plastic. There are many quality manufacturers around the
entire nation that provide great product and service, much better than your
experience seems to suggest. Plastic is expensive to buy, more expensive to
lose, and has various other problems and concerns.

To compare a built CHEP pallet with a "whitewood" pallet is a bit misleading
however in several directions, especially to come to the conclusion that they
are the "good stuff". They are the good stuff in terms of build quality
because (by my estimation) they are built roughly 3x as strong as a generic
48x40 (standard GMA pallet.) They also cost upwards of 3x as much to
manufacture and the process is no different than the bad quality pallets that
you have had experience with. (Estimated GMA is about $10-11 per, CHEP block
pallet would be above $30, depending on locale.) Of course they hold up
better, they are built to do so. However, the pallet industry has gone from
standardization on sizes in the last 20 years (GMA 48x40, Coke pallet 36x36
mentioned below) to being specifically engineered to the load it was made to
carry.

TL;DR: There are wooden pallet manufacturers out there that produce a high
quality product. CHEP and plastic are both expensive but have their own
issues.

~~~
aurelian
Aside from expense, what issues do plastic pallets have?

~~~
gig3m
There's a massive PR engine at work for both the wooden and plastic side, but
the things brought up most are fire and chemical composition. You would think
that nothing could worse for a fire than wooden pallets (It's a constant
concern for us, not so much pallets but just wood products in general) but
there's a serious hazard with the manufacture of some plastic pallets. (Think
oil fire.) I'm sure some of this has been overcome or can be, but it was an
issue just a few years ago for sure.

In order to combat the fire front manufacturers starting using chemical
composition to make their pallets flame retardant. One of the those chemicals
is called deca bromine and is considered to be extremely hazardous. This
creates a problem specifically in scenarios where food contact is common.

This is a dated article, but it references some of the concerns.

[http://www.palletenterprise.com/articledatabase/view.asp?art...](http://www.palletenterprise.com/articledatabase/view.asp?articleID=2886)

~~~
nikatwork
Not to mention the whole sustainability and foreign oil dependency issues of
plastic. Whereas plantation timber can be grown locally in the US, keeping the
jobs and money on home turf and lowering the risk of ecological issues from
oil drilling.

I guess fire and contamination risk is much more immediate to the company
bottom line, unless the material origin could be turned into a
branding/marketing factor - "We only use goddamn all-American pallets!"

------
stephengillie
Interestingly, this article completely leaves out soda (aka pop aka coke)
pallets. All of the major soft drink bottlers use about the same size and
shape pallet, and it's much smaller than the traditional whitewood pallet.
Often, they'll put their pallet onto a square pallet, then that one a
whitewood pallet, when they deliver to grocery stores.

Pepsi, Coke, and other soft drink and beer distribution companies even have
their own, smaller, powered pallet jacks. The powered pallet jacks that
grocery and other retail stores use are usually too big for these smaller
pallets.

These companies have been slowly moving to plastic pallets over the past
decade, and wooden pallets of those dimensions are hard to find today. The
plastic pallets offer some level of 4-way access as well.

\---

Edit: I had forgotten about these full-size plastic pallets. They are so much
cleaner and easier to use. Even new whitewood pallets leave behind a cloud of
splinters and wood dust. These leave behind some shipping dust as there are no
cracks for dust to fall through. They stack more securely and don't get
heavier when wet like wooden pallets. And you can stack about twice as many in
the same space.

[http://www.foodlogistics.com/article/11442316/smaller-
faster...](http://www.foodlogistics.com/article/11442316/smaller-faster-and-
sustainable)

------
dewey
There's also an interesting system in Europe called EUR-pallet. [0]

They are usually made out of higher quality wood and quite durable. The system
works by trading pallets for pallets, so if you receive some goods on a EUR
pallet the driver takes an empty EUR pallet from your stack and it'll be
reused at the other company.

[0] [http://en.wikipedia.org/wiki/EUR-
pallet](http://en.wikipedia.org/wiki/EUR-pallet)

~~~
gumby
EUR-pallet isn't the only alternative.

I'm fascinated that after all these years there isn't a standard pallet size.
I have tried to design products that can "ship on a pallet" and end up
shooting for a footprint one meter on a side which fits within a lot of format
but leaves plenty of wasted space:

[https://en.wikipedia.org/wiki/Pallet#Dimensions](https://en.wikipedia.org/wiki/Pallet#Dimensions)

~~~
gig3m
1) There are plenty of standards in the pallet industry, especially in the EU.
([http://www.palettes-cp.com/welcome-en.html](http://www.palettes-
cp.com/welcome-en.html)) The US has the 48x40 GMA which for many years was
used almost exclusive in the grocery chain. These standards were born of
similar or exactly the same needs from different customers. Things like 2x2
barrels, poly supersacks, square and octagonal boxes, etc. All those things
are standardized and so the pallet that goes underneath them is largely the
same.

2) Customization is a factor of efficiency. Why would someone shipping a
product want to buy a standard size pallet that doesn't fit or hold the weight
requirement for his use case? Instead, he consults with either internal
packaging specialists (in big companies) or a manufacturer directly to design
a pallet to fit his load. By doing this he actually knows the limitations of
the packaging (stacked x high, racked, weight distribution, unstacker and
rollerbed compatibility, etc) and also has some general idea that the product
he is receiving is correctly priced for his requirements. Many times those
requirements are customer driven, meaning my customer's customer.

Source: I make pallets, lots of them.

~~~
dustin1114
That's pretty neat: I discuss an interesting subject with someone on Hacker
News that directly affects my current industry, but I am a few levels down in
the supply chain. I deal more with product distribution and logistics, while
you deal with the actual manufacturing of the pallets they sit on. Thank you
for your expertise and insight!

~~~
gig3m
Believe me, the last thing I ever thought to see on HN was pallets! Glad to
have the conversation!

------
gohrt
YC application question: "How have you hacked a system in real life?"

> What is most vexing to many recyclers is the belief that the accumulation of
> blue pallets in their yards is not an accident, but a deliberate CHEP
> strategy. After all, collecting these stray pallets takes a lot of labor, a
> lot of miles, and a lot of trucks. If you are CHEP, why do this work
> yourself if you can get someone else to do it for you, at a price that you
> dictate?

> In 2008, a group of recyclers filed a class action lawsuit, claiming that
> CHEP was leveraging its dominant market position, and violating anti-trust
> law, by transferring its operational costs onto recyclers. The recyclers
> argued that CHEP had made them into a “conscripted collection army.”

------
quinndupont
Stunning to see Cabinet Magazine being referenced on HN. For those that don't
know, Cabinet is an excellent magazine that covers many topics, but has
something of a philosophy and art focus. Great article, as always.

~~~
sxcurry
This is why I read HN - fascinating article, knowledge of an industry I had
never thought about before, and a heads up about a new source of information,
Cabinet Magazine. Thanks, HN!

------
davidbanham
CHEP and Bunnings (the dominant hardware retailer here) had a big spat over
this recently.

[http://www.smh.com.au/business/bunnings-11m-pallet-
cleanser-...](http://www.smh.com.au/business/bunnings-11m-pallet-
cleanser-20100511-uupr.html)

They now refuse to allow any CHEP pallets on to any Bunnings site. LOSCAM,
whitewood or nothing.

------
vacri
The article is stacking the deck pretty heavily:

 _After all, collecting these stray pallets takes a lot of labor, a lot of
miles, and a lot of trucks._

vs

 _they receive blue pallets whether they want them or not_

So the recyclers' hands are tied because they _receive_ pallets mixed in with
white pallets when delivered by the truckload, but then they get to turn
around and talk of all the effort collecting them. It's not hard - just
educate your customers - "I won't pay for blue pallets, because they're rented
equipment. You can ship them to me, but I'll reduce the payout for a truckload
by the number of blues". What the article is promoting is that the recyclers
get to play the innocent... then directly profit off it.

Don't get me wrong, I think the idea of renting pallets is stupid, but then
again, I'm not making $3.5B/year. But the article seems to gloss over the fact
that selling something you do not own is not legal, regardless of how much
labour you put into it (otherwise burglary and fencing would be legal). These
pallets are _clearly_ marked; it's not like they're hard to confuse.

~~~
exhilaration
"I won't pay for blue pallets, because they're rented equipment. You can ship
them to me, but I'll reduce the payout for a truckload by the number of
blues".

Correct me if I'm wrong but my impression from reading the article is that
recyclers don't pay for those used pallets, they're just taking away what
would otherwise be trash. So there's no incentive they can offer to eliminate
the blue pallets from what they're receiving.

~~~
msandford
It depends on the place. If you only have a few pallets you probably get
charged for the pick-up. If you have many pallets you get paid a small amount.
There is a cost associated with getting a truck from one place to another
irrespective of how loaded down it is.

Part of the reason the whole CHEP thing happened is that there is very little
high-level communication that goes on around all this. The pallet supply chain
is mature and the folks managing it don't necessarily talk to the folks making
it happen day-in and day-out all the time. Getting them to enforce some kind
of rule that they will view as bullshit is going to be next to impossible. The
blue pallets will show up at your facility anyhow and are you going to pay to
ship them back? And then bill your customer for the cost of shipping them
back? Either they won't pay and you'll have to take them to collections when
they switch to a new recycler or you'll roll over since you want to stay in
business.

When you're moving $10k worth of stuff on a $10 pallet and paying $2 to get it
picked back up the $2 is a joke. When it costs $2 to pick a pallet up and $2
to send it back and your profit margins are probably 10-20% then if you get 5%
CHEP pallets you end up paying double for them if you try and do the right
thing (which eats up your 10% margin) or you just look the other way and don't
think too hard.

------
GFischer
A really compelling read.

How many hidden industries like the pallets one are out there, waiting for
software (or hardware) aid or disruption? I mean, 3.5 billion in pallet-
related revenues :) , and millions in losses due to lack of tracking... is
RFID really the best solution?

~~~
msandford
How much does a pallet cost to manufacture and how much does a lo-jack cost to
implant? Further, how much does it cost to keep the lo-jack running for a
decade?

I used to run a 10,000 sqft logistics facility (really tiny in that world) and
we kept a stock of about 20 pallets. I seem to remember the wooden ones
costing $2-$5 used and the plastic ones less than $50 new. The most expensive
pallets I could find from U-Line are $100 or so.
[http://www.uline.com/BL_8204/Rackable-
Pallets](http://www.uline.com/BL_8204/Rackable-Pallets)

Figure that adding an armored place to put a lo-jack would cost $5-$10 (gotta
protect it) and that the actual lo-jack would cost at least $50. It would need
to be metal encased with a way to sneak an antenna out, have a "lifetime"
battery (lithium-thionyl-chloride, not cheap [http://www.all-
battery.com/lithiumprimarybatteries.aspx](http://www.all-
battery.com/lithiumprimarybatteries.aspx)) and the whole thing would have to
be molded in to the pallet lest someone get clever and remove them cheaply.
The batteries MUST be an integral part of the lo-jack so that someone couldn't
just remove the batteries and neuter the device.

Then the data plan to keep it connected up to the world via the internet would
cost at least a buck or two every month (in HUGE bulk purchases, individually
it's something like $10/mo/device). Worse is that if someone puts them inside
a metal building or metal shipping container or metal truck they're going to
have a hell of a time getting a GPS fix and/or communicating with the cellular
network.

So now that you've done all this your $40 to $100 (max) pallet now costs at
least $50 and perhaps even $100 more PLUS it costs you something monthly
whether people are renting it or not. What do you get to charge for this? From
when I can tell, about $5 per trip.
[http://www.palletforum.com/tm.asp?m=26458](http://www.palletforum.com/tm.asp?m=26458)
That's on a nominal $20 pallet cost although they may cost more now, the forum
post is 2 years old.

I can't see how building a lo-jack into a pallet is going to be a compelling
value proposition given all the limitations.

~~~
phpnode
lojack won't work for the reasons you mention, RFID really is the best
solution because it's cheap and they don't need to change their existing
inventory. There's no need for plastic pallets, they could embed the RFID tags
into each of the wooden blocks which make up the corners of the pallet. If one
doesn't already exist, it's probably quite simple to produce a nailgun like
device which literally shoots an RFID tag into a block of wood, which would
make tagging existing pallets straightforward and cheap.

The palettes are cheap enough that they actually don't need the exact location
of each of them. All they need is the ability to track pallets at certain
points in the supply chain, which will give them a good indication of global
pallet movements.

RFID tag readers are also quite cheap so you could potentially fit a lot of
them at relatively small expense. They could be embedded into the flooring of
trucks, the entrances of warehouses and the arms of forklifts.

~~~
kbaker
The problem with RFID for pallets is that the logistics space is still too
decentralized. I work for a company which does a lot of custom RFID
integration (we have worked with the companies in the article for tracking
pallets.)

First, the RF properties of inserting RFID tags into wooden pallets just
doesn't work well; it is far better to stick a label on the outside of the
pallet. But then you get into durability issues, etc. So iGPS really had the
right idea here, with molding the tags into the actual plastic pallet itself.
Great read range.

The other problem is the hugely distributed nature of the supply chain. Pallet
poolers like CHEP just don't have the resources to stick an RFID reader at
every location that can possibly accept pallets, and distributors / store
locations have no incentive to help CHEP out with returning accidentally-
delivered CHEP pallets. RFID readers are unfortunately not cheap enough for
CHEP to start parking readers everywhere to see where their pallets go.

Trust me, as a manufacturer of RFID readers, our company would absolutely love
a scenario where RFID readers start being embedded in every trailer and on
every forklift, however realistically that solution is still at least a few
years out, and the cost needs to come down probably another order of magnitude
to be practical for use in the pallet industry. iGPS was just too early to the
game.

~~~
phpnode
thanks for the insight! regarding embedding the tags I was imagining a small
device around the size of a large coin with perhaps three prongs / nails
attached. The prongs would embed into the wood keeping the tag in place, and
the force of installation would depress the device into the wood slightly, but
the RFID tag itself would remain on the exterior of the wood, so it should
still be readable.

------
jessaustin
Maybe this is a rare streak of jingoism for me, but it seems odd that a
foreign company has been able to come in and dictate through the courts that
the whole industry should work on a completely different model. Perhaps the
reason "blue" is such a good deal for shippers is because much of the real
cost has been transferred to third parties. ISTM the courts should force CHEP
to include a significant deposit in its contracts, or else forgo the
discounted forced labor of the recyclers. It wouldn't have to be a 100%
deposit, but it would have to be high enough so that shipping destinations
were no longer indifferent to whether the pallet was returned to CHEP or
recycled or stolen.

~~~
Lagged2Death
_...it seems odd that a foreign company has been able to come in and dictate
through the courts that the whole industry should work on a completely
different model._

Remove the word "foreign" and that statement still makes sense and it still
describes an objectionable state of affairs. No jingoism required.

------
acomjean
One of the theories on how the Asian Long Horn Beetle (an invasive insect that
is also a wood boring bug) came to the US was in wood used in shipping. Either
palettes (skids is the term I've heard), or wood bracing in shipping
containers.

Plastic doesn't seem so bad.

~~~
ptaipale
As a software engineer, I have only once in my lifetime delivered something
for which I had a certificate that it was bug-free.

This was when the company was moving some work to be done in India. We shipped
a lot of used servers there, and they were on wood pallets. Prior to shipping,
the Indian customs required a paper called phytosanitary certificate for the
pallets. It meant the pallets had no bugs.

------
Cthulhu_
One major downside of the wooden pallets is the ever-present risk of fire. I
worked at a food/vegetable processing plant once, it'd get vegetables from the
field, we'd pack them, chuck 'em in boxes and stack them on pallets. (vacation
job, yay)

Next to the plant were huge stacks of wooden pallets. Years after I worked
there, the whole plant burned down; a fire started in the pallet stack, and
since they're awesome fire material they took the whole factory with them. Not
sure if it was accidental or intentional though.

Bonfires and world record attempts for bonfires often involve large amounts of
wooden pallets. Cheap, very open, stable/stackable, ideal fire material.
There's a picture of the world bonfire record in Norway where they build a
giant tower out of pallets.

~~~
ptaipale
Isn't fire also a danger with plastic pallets? Generally, plastic fire is even
worse than wood fire (in terms of heat and toxic substances generated). Wood
burns, but it isn't instantly flammable and may in some circumstances
withstand fire better than steel (though this is counter-intuitive).

You can add chemicals to plastic to make it resist fire, but those have other
problems, often with toxicity.

Generally, if you have huge stacks of some unused material in a place, and it
can catch fire, there is something wrong with the process. It would make sense
that those pallets are worth some money so you can get rid of them easily. If
not, should the local authorities control the amount of material stored if it
can be a hazard?

------
gadders
Typical:
[https://news.ycombinator.com/item?id=7672923](https://news.ycombinator.com/item?id=7672923)

No-one talks about it when I submitted it.

------
lotsofmangos
You could easily make a cheap machine that could make pallets to order out of
plastic packaging scrap on-site. Judging from this article though, that might
annoy a hell of a lot of people.

~~~
jacquesm
Have you ever seen an injection moulding machine that can produce something
the size of a pallet? Do you know how much energy it takes to run one and how
much expertise to keep it running? How much it costs? How much energy is
required to power the recycling process?

[http://i01.i.aliimg.com/photo/v0/1830977371/plastic_pallet_i...](http://i01.i.aliimg.com/photo/v0/1830977371/plastic_pallet_injection_molding_Machine_with_different.jpg)

These machines are viable because they run continuously (at least, when
they're not broken).

You don't make them 'on-site', you make them in a thing called a factory
because that's the only place where you can get the economies of scale to
justify your capital expenses and your operational overhead as well as your
energy supply arranged in such a way that you'll turn a profit.

I'm all for decentralization but there are good reasons why the word 'easily'
is not applicable in the sentence above. Annoyance does not come into play
until you've figured out how to do this economically.

~~~
mbreese
You wouldn't use injection molding for a pallet - it's too big. However
compression molding is an option. It's not as accurate as injection molding,
but it's significantly cheaper. Or at least it is at the scale my father-in-
law works at when he makes plastic pallets :). His pallets are custom designed
for a specific industry to fit in their manufacturing and logistics workflow.

~~~
Avshalom
The real problem is that "plastic packaging scrap" is not

A) unlikely to be a single type of plastic

B) unlikely to be the type of plastic you would want to use for a pallet

~~~
lotsofmangos
Plastic export pallets are already made from low grade mixed waste.

