A pallet can bring a consistent return on investment (ROI) in the supply chain if the proper pallet is used. The present mantra of all major industrial companies is cost effective, waste reducing and environmentally friendly supply chains. Metal pallets are a great alternative to the more commonly used wooden or plastic options and can significantly revolutionize a company’s supply chain. It is practically impossible to break a metal pallet and now many of them are being custom engineered and designed based on the items they help store or transport. Metal pallets lower the amount of product damage, and there is no worry of debris left behind as in the case of broken plastic or wooden pallets. Materials used to make metal pallets include carbon steel, stainless steel and aluminum, with carbon steel having the highest quality at the lowest cost.
The resourceful management of RTI – Returnable Transport Items, is becoming significant in a modern supply chain. RTI such as pallets are sent to the customers together with the contents, after which they are delivered back to the issuing point. Of the various pallets available, the one that needs the least maintenance and that is delivered back to the issuing point unscathed or with little damage is the metal pallet. The ROI on a metal pallet is strong and continuous for the long term. Metal pallets usually meet both United States Department of Agriculture (USDA) and U S Food and Drug Administration (FDA) standards, so they are majorly used in pharmaceutical, chemical, grocery and food processing operations as they can be disinfected and steam cleaned. These pallets are best used in a slave system, where shipping is restricted to moving goods within or between specified plants and facilities.
Wooden pallets, the previous industry standard, is losing favor due to the rising cost of lumber, impact on the environment due to lumber harvesting, and low recycling rate. Additional factors influencing the demand for metal are wood’s deficiencies such as insect infestation, sanitation, fire hazard, and performance constraints. With awareness increasing about the benefit of metal pallets versus the financial and environmental impact of wooden or plastic, companies are now focusing on shifting their usage to metal pallets in their supply chain. Take the example of Compliance Packaging International in Columbus, Ohio, which deployed steel pallets to lower costs, improve supply chain sustainability, and protect inventory from damage. As per the company, some of the businesses that started using the metal ones in place of the traditional options, have seen less than 3 percent losses, as inventory is suffering less damage during transportation in comparison to wooden pallets. In another instance, Safelite AutoGlass expects an annual cost savings of $2.78 million by transitioning to steel pallets.
The benefit of using metal pallets is higher levels of supply chain efficiency, increased asset utilization and return on investment. The ever growing competitive market demand for returnables is driving substantial capital investment in metal pallets. These pallets are the strongest and most durable among the options in the market. Though at a higher initial acquisition cost, they deliver greater ROI in the long term as compared to it plastic and wooden counterparts.
Brickwork Sourcing provides end-to-end procurement research and consulting services to clients from all major continents. It specializes in assisting clients with low cost country sourcing as well as Indian market entry assessments.