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.
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.
* Trailers are 9-10 feet high, so a fully palletized truck would (a) Have very tall unwieldy pallets, and you'd have to carefully order things so boxes on the bottom don't get crushed, (b) need racks or something similar to hold multiple tiers of normal-height pallets, or (c) be half-empty
* Even with the current process, getting boxes off the truck is not even close to the bottleneck. When I worked at Target, 2 people threw boxes onto rollers, 5-6 people sorted the boxes onto pallets organized by area of the store as they went by, 2 people rolled those pallets onto the sales floor and threw each box in front of the appropriate aisle, and ~20 people opened the boxes and stocked the shelves. The 2 people unloading the truck could always keep well ahead of the 20 on the sales floor.
* An alternate strategy might be to sort the boxes into pallets by store area at the distribution center rather than at the store. You might get some economies of scale out of doing this process for 100 stores at 1 distribution center, but it may still not be worth it to put all that needed floor space, latency, and congestion in what I imagine is already a very congested point in the supply chain. Better to distribute that part to the endpoints, since you already have 100k square feet per store to work with that's just sitting there while the store's closed.
Part of Target's madness might be in the extremely different kinds of merchandise they're selling, but most of those products are small, and Winn-Dixie solved the problem by sending these products in plastic totes.
The largest Taco Time is an international chain of restaurants, found in the US and Canada.
The smaller Taco Time, officially Taco Time Northwest is a franchise local to Washington State, largely the greater Seattle area, where I grew up.
Taco Time NW has generally higher quality food than most other fast food restaurants, and seems "higher end". I always really enjoyed going there, and when I moved I was surprised to find these other places named "Taco Time" that were really different.
 - http://en.wikipedia.org/wiki/Taco_Time
 - http://en.wikipedia.org/wiki/Taco_Time_Northwest
That said, anyone craving Taco Bell while in the Portland/Vancouver area would still be well-advised to check out a local Taco Time instead -- it's still better quality food. Or at least it was 10-15 years ago.
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...
Taco Time's ground beef isn't even frozen: http://www.tacotime.com/menu/
Actually, Taco Bell had no trouble at all proving that their beef met the standard, and the suit was dropped pretty quickly.
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!
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.
Generally, these are the pros and cons I see with the major types of pallets:
GMA: inexpensive, standard, lightweight (a VERY big deal when cubing out a truck), easy on the supply chain.
CHEP: pretty consistent, longer lifespan
iGPS: very consistent, easy on automation, they feel indestructible
GMA: generally a shorter lifespan, inconsistencies between manufacturers, quality varies
CHEP: expensive, heavy, red tape
iGPS: extremely expensive, heavy, red-tape
And yes, depending on the vendor, the quality of GMA pallets varies. There are excellent pallets that hold up and seem to be built with quality material, and there are others that feel like they break into pieces after a few handlings.
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.
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!"
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.
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.
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:
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.
Thanks for weighing in!
>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?
This surprises me. I certainly understand the fact that each product class will have different needs, but since transport is containerized I am astonished that the world hasn't converged on a pallet that maximizes container footprint, with the special cases being rare. I.e. people would adapt the number of units per pallet in order to optimize for the rest of the supply chain (warehouse footprint, ubiquity of available availability of etc etc). Clearly this is what Walmart et al are trying for.
But instead, to use a software analogy, abstraction is frozen at the container level but below that everything is largely bespoke. I don't know if there is some path dependency for this or if it's simply that the other parts of the supply chain are still highly fragmented and/or specialized.
Thanks again for your comment!
> 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.”
They now refuse to allow any CHEP pallets on to any Bunnings site. LOSCAM, whitewood or nothing.
After all, collecting these stray pallets takes a lot of labor, a lot of miles, and a lot of trucks.
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.
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.
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.
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?
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
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) 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 That's on a nominal $20 pallet cost although they may cost more now, the forum post is 2 years old.
I can't see how building a lo-jack into a pallet is going to be a compelling value proposition given all the limitations.
A GPS car tracker costs a lot less than what you're quoting, when purchased in bulk from China (I don't know about reliability figures though :) ). I think it was in the U$ 15 range for the entire thing. Certainly not the armored thing you're describing, which sounds pretty expensive.
And the cell phone data plan could be negotiated way down (I think your estimate is correct, about U$ 1 or 2 per month). What I pay here as a consumer in Uruguay is less than U$ 5/month for 384 megabytes. Getting a fix is definitely a problem, but you can track it until it gets inside wherever it lost the signal (hopefully it's a warehouse).
That said, there's a lot of low-hanging fruit to start putting GPS trackers on pallets :) (I still don't see them being ubiquitous with pets and other higher-value items to track).
If it wasn't feasible for cars (MUCH more expensive than pallets), then I agree with your estimate that it won't happen soon, but it's going to be possible sometime in the near future (and somebody is going to be ready for that, and make a killing).
Worse is that even if the ENTIRE lo-jack is built into a single monolithic chip (which will take millions to engineer) you still have to power the thing. The transistors might be getting exponentially cheaper but the batteries aren't. And you need quite a bit of batteries to make this happen.
If you can get a fix to a warehouse you're OK but once the pallets go into an intermodal shipping container and stacked, you're SOL. Shipping container bottoms are made out of wood, not steel so sitting up on a truck they can still get signals. But once they're stacked you're in a world of hurt. Sure the containers might pop back onto the grid once they get unstacked but that might happen once they're out of the country, potentially to countries where you don't have subsidiaries who can go get them back.
So you have two fixed costs: batteries and data/cellular. You have to buy these and you have to pay for them on an ongoing basis. I think what would end up happening is that your battery and data (and plastic recycling and lo-jack refurbishing) costs will end up eating whatever profits you might manage to eke out such that it's not that great of a business to be in.
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.
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.
Without that free enforcement, these $5-$50 items would not be worth fighting over.
I don't believe that police protection should be a fee-for-service business, but are there no checks and balances on the use of public services for private gain?
In your hypothetical example, I believe you are referring to a physical storefront where the primary revenue generating activity is to sell merchandise.
If your hypothetical shopkeeper had a shop that made more money from forcing shoplifters to pay a fine for scaling, then... perhaps. I don't think your hypothetical shop exists, so it's tough for me to answer.
Within one standard deviation of the mean, all of them.
Most hackers trying to 'disrupt' things naturally only work on what they know. So a lot of solutions are developed for industries everyone knows about: restaurants, travel, education, etc.
But most of the world's industries are not conducting business out in the open. They are operating inside factories, warehouses, labs, shipyards, trainyards, depots, private buildings, on the road, and in the field.
This is why a little niche knowledge is so powerful. Many industries only see innovation from people within the industry. But they usually have the same technical background as everyone else there, and the same blind spots. The hacker who has (or can get) enough domain knowledge to apply hardware and software in the right places is basically a Wizard.
Remove the word "foreign" and that statement still makes sense and it still describes an objectionable state of affairs. No jingoism required.
Source: I run one of the largest pallet manufacturers in the US, 50+ year old family business.
Welcome to the world outside the US.
Plastic doesn't seem so bad.
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.
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.
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?
No-one talks about it when I submitted it.
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.
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