It is an established fact that the cost per pound to move materials will decrease as the size of the unit load increases. It is cheaper to handle a full case of product than individual consumer packages, and significantly less expensive to handle a 40-case unit load than individual cases.

Six options are recognized for unitized materials handling:

  • Purchase of reusable wood pallets (with few exceptions, wood pallets are reusable through recycling and remanufacturing programs)
  • Leasing/pooling of reusable wood pallets
  • Leasing/pooling of reusable nonwood pallets (plastic, metal, etc.)
  • Purchase of nonreusable pallets (corrugate, pressed wood, etc.)
  • Use of slip sheets or clamp trucks
  • Floor loaded (not unitized)

A short history of unit loading

After the forklift truck was developed during the 1920s, users recognized the need for a platform to hold the material that rode on the forks. The initial product, known as a skid, had no bottom deck and was useless for stacking. However, few warehouses at that time had clearances above 10 feet, so there was no need for high stacking.

Use of the lift truck expanded with mobilization for World War II, and the skid was converted into a more durable wooden pallet. With post-war construction of high bay storage buildings, users designed pallets having substantial lower decks, to increase stability in stacking.

Unfortunately, there was no standardization in the design of materials-handling equipment, including pallets and pallet racks.

During the late 1950s, a young warehouse manager invited representatives from the major grocery chains in Columbus, Ohio, to a dinner for the purpose of discussing pallet exchange. While the guests enjoyed the dinner, they all agreed the concept was impractical, because each chain used a different design for both storage racks and warehouse pallets.

A few years later, during the early 1960s, General Foods introduced a standard pallet design and urged its vendors and customers to collaborate by exchanging pallets of identical specifications. The company was zealous in policing adherence to its standard, which included strict specification of the number and width of the deck boards, the spacing and thickness of these boards, and even the type and quality of lumber and nails to be used.

Control of the General Foods pallet was eventually transferred to the Grocery Manufacturers Association, and to this day it is known as the "GMA pallet."

Unfortunately, with the transfer came a total breakdown in the policing of pallet quality. Users found creative ways to cut costs by using cheaper wood and thinner deck boards. The only GMA specification that survived is the exterior 48-inch-by-40-inch dimension, translated outside the U.S. as 1-meter-by-1.2-meters.

As quality control disappeared, cynical users referred to pallet exchange programs as "pass the trash."

Pallet pools

Meanwhile, in Australia, another method evolved. The huge military buildup during World War II resulted in the abandonment of vast amounts of surplus military equipment, including pallets. Because of military standardization, most of the pallets were the same size, and entrepreneurs used them in the creation of a business: Commonwealth Handling Equipment Pool (CHEP).

The leasing of CHEP pallets became popular, and the company was acquired by British interests who spread the concept to Europe and America. Currently, CHEP has a dominant position in pallet leasing. The quality of the pallets is well-controlled, and they are painted bright blue, for easy identification.

PECO, a leasing company committed to the wood pallet, provides competition to the existing giant.

In other countries, notably Canada, pallet pools having strict control have been maintained, so pallets can be exchanged without compromising quality. In effect, they have maintained the system originated by General Foods.

The U.S. Postal Service has a private pallet pool. It buys all of its pallets and controls the quality. They can be "borrowed" by major postal users. Unfortunately, control of the pool has become a challenge.

Other options to wood pallets

Palletless handling options have been used for decades. One option is the clamp truck, originally used with side arms to grasp cotton bales or paper rolls. Eventually the clamp arms were redesigned to handle major appliances and consumer packaged goods (see image at right).

In the early days of clamp use, there were some unfortunate accidents. An appliance manufacturer filed a large lawsuit because improper application of carton clamps in a public warehouse resulted in damage to thousands of home appliances.

As the technology and packaging improved, such incidents virtually disappeared. However, opponents of clamps still claim the technology is dangerous.

Slip sheet handling has existed as long as the clamp. The slip sheet is a fiberboard platform that is used as an expendable pallet. The cost of the sheets is a fraction of the cost of a wood pallet. They are easier than pallets to handle and store, and they occupy less space in a truck or container.

However, slip sheets can be moved only with a "push pull attachment" that is more difficult to operate than a conventional forklift truck. A lip on the sheet is grasped by an attachment, in order to slide it onto wide steel platens that support the load. Until lift truck operators acquire training and practice, slip sheet handling can be slow and difficult.

Both clamp and slip sheet handling share a significant virtue: They enable easy transfer of a unit load from a storage pallet to an expendable shipping platform. While many regard both technologies as impractical, our personal experience indicates both are workable, given proper training and equipment maintenance.

Among nonwood pallet options, plastic is the most popular. Plastic pallets are considered safer than wood, because they are lighter and have no splinters or nails. Many users claim they are more durable than wood, and even though the initial cost is higher, the cost per trip is competitive. Thermoformed plastic pallets do not have the strength to be stored in pallet racks.

Metal pallets are a far more expensive option than either plastic or wood. While dollar expenditures for plastic pallets have increased each year, dollar volume for metal has remained relatively level.

An innovative option is the corrugated pallet, constructed of corrugated cardboard with hardboard inserts enabling the pallet to be stored in pallet racks.

Some other significant viewpoints

Management at reverse logistics specialist IFCO Systems believes the most viable alternative to pallet leasing is wood pallet purchasing and recycling. This option offers a residual value at the end of pallet use.

Unlike plastic and metal pallets, wood can be repaired easily, enabling the pallet to remain the lowest cost alternative. Unlike leased pallets, which usually must be repositioned, recyclable pallets are retrieved, repaired and resold in the local market.

Because many pallet users do not want the additional job of pallet management, IFCO and its competitors allow the pallet user to focus on core business, while they manage pallet delivery, reverse logistics, repair, recycling and sale of used pallets.

Where do we go from here?

Years ago, industry experts presented the following options for solving the challenge of unitizing grocery products:

  • Develop a new design for a warehouse pallet that can be readily exchanged
  • Develop an economical one-way pallet for shipment without exchange
  • Develop a pool of pallets owned by third parties

We see no evidence of progress toward the first option. The corrugated pallet could be a way to address the second option. Pallet leasing and recycling continue to grow in popularity as solutions to the third option.

Pallets constructed of wood have inherent disadvantages. High piles of empty pallets are a fire risk, and wood pallets stored outdoors will deteriorate or be soiled by birds and rodents. Unless properly treated, wood pallets also allow insect infestation. Unlike plastic or metal, a wooden pallet cannot be steam cleaned effectively.

In spite of these problems, the wood pallet remains the most efficient way to handle cargo.