Reusable Packaging: Is It Really So HARD TO HOLD? (Part 1)

Reusable pallet and container theft – this story first appeared in May 2010, and still contains useful information.

(Read a more recent discussion: Prevent reusable asset loss by giving reusables a voice)

Reusable Pallets and Containers: Why Do Some Pallet and Container Users Struggle to Maintain Control of Assets?

With the headline leading news in November 2009 about plastic pallet and container theft in the Baltimore area, the issue of reusable pallet and container control, was, at least for a short while, once again a high-profile subject. The efforts, led by Coca-Cola and other companies, underscore the frustrations felt by at least some users of pallets and containers about how to maintain long term possession of these valuable mobile assets. It is ironic that devices typically designed with ergonomic considerations such as hand holds to facilitate easy manual handling, are at times so hard to hold, at least regarding keeping a lid on pallet and container loss.

Plastic Pallet and Container Theft in the Baltimore Area

In the Baltimore case, a group of frustrated companies collaborated to hire a private investigation firm to curb theft. To summarize the story, a group of Maryland businesses, including Coca-Cola, Pepsi-Cola, H&S Bakery and Cloverland Dairy had hired J.R. Investigative Services to investigate unacceptably high levels of container loss. James Rood, a private investigator, and principal with the firm, observed a recycling company taking pallets into its possession that were marked as property of assorted other companies. As a result, 5 individuals were indicted for stealing $400,000 worth of reusable plastic pallets and containers from local businesses. The actual value of the packaging taken is thought to be over $1 million.

James discovered that plastic pallets and containers were repeatedly being stolen from retail locations and being delivered to a plastic recycler. The recycler was reported warned on at least two occasions to stop the practice of purchasing proprietary assets, but failed to comply, resulting in the indictments being issued last November.

The Ultimate Cause of Missing Assets: Lack of Management…or Theft?

Some industry insiders believe that theft is a key component of pallet or container loss. “Dairy processors are spending about $100 million a year in replacing milk crates and roll cages,” explained Vice President Clay Detlefsen of the International Dairy Foods Association. “Some of that would be normal wear and tear. Some of that would be disappearance for non-malicious reasons, like to build coffee tables. It is not proper behavior, but we are not unduly alarmed by it,” he said. He acknowledged that certain groups of society, such as university students, have been long known to illegally use milk crates.

“We are more concerned about theft for profit, where people are stealing plastic crates to grind them up and get the resin from them,” Clay emphasized. “And we think that 60% of our purchases are to replace those losses and possibly as high as 80%. – $60 to 80 million a year due to theft for profit.”

Joseph E. Harrington, Ph.D., President of the Harrington Group Brand Protection and Asset Tracking, is a reusable packaging program service provider. He agreed that theft is a problem, noting that container thieves in the Los Angeles area can cash in stolen plastic containers for anywhere from $1 to $1.50 each.

James Rood believes that users of reusable plastic pallets and containers can help themselves by ensuring that they are not purchasing products that are derived from stolen resin, in effect arguing for an inspection of regrind source locations, to help dampen demand for stolen regrind material.

In some respects, the theft versus mismanagement debate can be viewed as just opposing sides of the same coin. Pallets may disappear because they are stolen, as in the Baltimore example, but if pallets are inadequately managed, they are then made more vulnerable to theft. Without good management practices, knowledge of theft may be delayed for a lengthy period of time, until the pallets or containers run out and production is forced to stop or expedite an emergency purchase. In this respect we could argue that theft is to some degree a symptom of inadequate management.

Lack of pallet and container visibility can also lead to repeated theft, according to Harish Gouniyal, Senior Sales Manager at KeyTone Technologies Inc. Often, owners of containers and pallets do not have accurate information about the locations of their reusable assets, and where they are being lost. Keytone supplies a RFID reusable pallet and container tracking solution that can provide such visibility. In one application for the U.S. military in Afghanistan, Keytone employs RFID tagged containers, readers, and GPS to provide better asset visibility in transit.

Click here to Read Part 2 of Reusables – Are They Really So HARD TO HOLD.

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