Wood Pallets Still Lead in Volume for Export Pallet Selection 2016

Continued from Page 1 of Export Pallet Selection Trends 2016

Wood Pallets for Export and in Developing Nations

For Sukhi Brar of Surrey, B.C.’s Advance Pallet, the conversation around pallet selection, as it is for almost everyone, is largely driven by price. And that long attractive price and performance tradeoff has ensured the dominance of wood pallets in the pallet market. “Customers are always interested in cutting cost,” Brar said. One way that he helps customers is through attention to pallet design. “We may do things like converting someone from a 3-stringer pallet to a 2-stringer wing pallet when that will do the job. Whatever we need to do.”

While customers often are interested in lower cost recycled pallets, Brar typically recommends new pallets for export applications so as to avoid any possible issues with respect to legacy HT stamps.

This point of view is echoed by April Collier, Pacific Customs Brokers. “It isn’t just the cargo that is under scrutiny anymore,” she remarked at the 2015 Western Focus meeting held by the Canadian Wood Pallet & Container Association. “It is the pallets, it is the packaging. It is dunnage it is bracing, it is every piece of material going into that load.”

Michael Modugno, PGS

Michael Modugno, PGS

ISPM-15 stamps from certain countries have been connected with stamp irregularities, Collier stated. ISPM-15 markings from China and Mexico, for example, are more likely to draw the attention of U.S. customs inspectors. She advised exporters to err on the side of caution. While up to one-third of an HT compliant wood pallet’s components can be replaced with new compliant parts if the history of the pallet is known by the pallet supplier, it can be problematic for border officers when stamps from multiple countries are visible on the same pallet. It is more prudent for pallet providers to black out old stamps during the repair process and re-certify pallets through fresh heat treatment.

The importance of pallet recyclers and exporters following the rule of ISPM-15 has been stressed by appeals in both the UK from Brepal and in the United States. Offenses have led to monetary penalties – including one penalty amounting to $100,000, according to USDA. Companies looking to purchase compliant wood export pallets should purchase them only from vendors which participate in the ISPM-15 program. It is unlawful for non-participating companies to sell pallets as being ISPM-15 compliant, even if they are stamped as being compliant.

Stepping aside from the issue of whether to use new or recycled wood pallets, there is also the point about what pallet footprint to employ, where there is flexibility in selection. Maximizing container utilization is one consideration, advantageous not only in terms of space saving but also with respect to eliminating voids that might result in shifting and possible costly product damage.

Another rule of thumb is to ship goods on a pallet footprint accepted in the country of destination, such as an 1100×1100 pallet to Asian countries or an EPAL pallet to Europe. When it comes to customer satisfaction, having the product arrive on a pallet that immediately meets their needs can be a huge benefit. Brar finds, however, that the conversation around choosing a pallet to fit the country of destination usually ends when the price of providing that pallet enters the conversation.

For Michael Modugno, Vice President of PGS, a major EMEA pallet provider, an important initial step in fitting a customer with a pallet is in better understanding the application. “We always want to understand the specifics,” Modugno explained. “Most of the time, when they buy plastic pallets for international shipment, it is an issue of no wood pallets available locally with the quality and quantity required. They buy plastic in the emerging countries because of non-availability of wood pallets.”

Modugno continued, “sometimes it is required for some activities such as food or pharmaceutical, and in such case we sell plastic, metal or whatever.” Overall he sees an increase in non-wood pallets, but mainly due to a lack of suitable wood pallets in some emerging markets. “Even in the Middle East where oil is cheap, it is cheaper to buy a wooden pallet,” he said.

Continue to Page 3: Plastic Pallets for Export and New Products