Calculating the value of palletized handling
Figures from a new Italian report reveal the benefit to FMCG companies of the contribution of pallets at 2.5 billion Euro each year with savings of 1.8 billion over the same period, staggering figures with widespread implications if extrapolated across global supply chains.
Academics at the LIUC University, in Cattaneo, have used the 20th anniversary of the arrival of the European Pallet Association (EPAL) in Italy to publish its self-confessed ‘surreal scenario’ into whether a world without pallets would stack up.
In the 30-page report A World Without Pallets – is it Sustainable? Professor Fabrizio Dallari and his associates examine and compare scenarios where the standardized wooden packaging system has created an optimized world of efficiencies and time and financial savings across Italy.
A surreal scenario
“Starting from a surreal scene of a world where logistics takes place without pallets, the research shows how much more it would cost companies and the country system to handle, transport and store goods, referring particularly to the consumer goods sector which annually uses more than 60 million EPAL pallets,” said Professor Dallari, the director of the Logistics and Supply Chain Management Centre at LUIC-University.
“The results appear even more significant if we consider the savings that a single EPAL pallet brings for companies during its nine-year average life: compared to an investment of only 12.5 Euro (9 Euro to purchase and 3.5 to repair) more than 1,200 Euro in logistics costs are avoided – 100 times the investment itself.”
The implication here is that extrapolated out across the globe, the contribution of the humble pallet – a series of planks and blocks nailed together – to a global circular economy would work out at tens of billions of Euros.
The report also looks at specific supply chain scenarios including loading, storage, product integrity (reduction of damage) and health and safety of workers involved in the handling of products in the supply chain.
In this latter category, given the number of households in Italy – 25 million – the financial benefit of reduced ‘occupational diseases’ – which factors in an average of 21 days off work and hospitalization costs – results in each family in Italy being 100 Euro better off each year.
In terms of vehicle loading, it takes 1.2 minutes to load a pallet on a vehicle and 40 minutes for the entire truck, compared to 495 minutes, or eight hours, if the consignments had to be loaded manually.
Frans Colthoff, corporate marketing and communication director at Faber Halberstma Group, one of Europe’s leading poolers of sustainable wooden pallets to the industrial and retail supply chains, said: “The humble wooden pallet is too often overlooked and taken for granted, but the research from the University of Cattaneo shines a forensic light on its contribution to everyday life to highlight that we would be very much worse off without it and the circular economy in which it operates.
“Although this was a purely hypothetical exercise, the findings of the report bring to life the real and quantifiable benefits in terms of efficiencies, productivity, and cost reductions to economies, not just in Italy but across the world.”
Source: Faber Halberstsma Group.
Click on the link to read the report, (in Italian) A World Without Pallets.