While standard pallet sizes are critical to the function of many industries, pallet size is often taken for granted in mature industries. But things haven’t always been that way. Back in the mid-1990s, a produce packaging committee identified 37 different pallet sizes used in the U.S. fresh produce industry, a practice that required major retailers to reboard or double pallet many products. As a result, produce warehouses were required to position many unit loads on the floor. This system resulted in a loss of overhead cube utilization as well as non-value-added handling labor.
Can you imagine the chaos if distribution centers received pallets that were incompatible with storage and handling systems or if the pallet sizes prevented shippers from optimizing trailer fill? And how would companies get rid of the pallets after emptying them if they were of a size that no one else wanted?
Modern supply chains require palletized products to flow efficiently from start to finish and, as such, have made investments in equipment geared to optimize operations around the standard size. Using a standard footprint means, for example, that the forklift operator won’t have to dismount to adjust fork openings or that a nonconforming pallet won’t get snagged in automated equipment and require manual intervention. Here are some reasons why using a standard pallet size is important:
- Cube utilization: When supply chains are built around a common pallet size, material handling, storage, and transportation equipment can be designed to optimize that size, allowing for superior cube utilization.
- Predictability and efficiency: Using a common pallet size of prescribed quality means that products can move more efficiently through supply chains, eliminating disruption required to reboard products or otherwise devious from standard operating procedures.
- Promotes the use of automation: Aside from promoting supply chain efficiency, standardization is a requirement for most automated storage and handling systems.
- Elimination of labor: As mentioned above, non-standard pallet usage can result in labor inefficiencies, such as reboarding products from non-conforming pallets or manually intervening to deal with odd-sized pallets malfunctioning in storage or conveyor systems.
- Promotion of reuse: Standard-sized pallets help promote reuse compared to many custom pallets. In the case of standard pool pallets, empty pallets can be shipped to any nearby pool participant, thereby avoiding the need to relocate the custom pallets back to the original shipper.
- Elimination of solid waste: After being emptied, non-standard pallets tend to accumulate due to a lack of marketable value. Where significant volumes of used empty standard pallets are generated and where substantial customers for the used pallet exist, however, a strong secondary market may emerge. Secondary markets for 48×40 whitewood pallets and europallets, for instance, are very strong. In the case of 48×40″ pallets, they are readily accumulated for refurbishing by pallet recyclers and then resold.
- Competitive pricing: Where standard pallets that can be made in high volumes, and where used pallet recovery/refurbishment is well established, high volumes and the availability of used pallets usually translates into more competitive pricing
3 Disadvantages of Standard Pallet Dimensions
While standard pallets offer a range of benefits, as outlined above but there are also potential pitfalls to consider.
- The standard size does not optimize a particular application: Keep in mind that a standard pallet optimizes many supply chains, it might not be the best fit for a particular product or application. Non-standard pallets remain very important. In the U.S., these “other” pallets were determined to encompass 39% of pallet production.
- Obsolescence: Using a standard pallet size may become suboptimal over time. For example, if transportation, distribution channels or international markets change, the standard size may become suboptimal compared to other options. Where a pool is not owned by a single operator or actively administrated, the standard may be extremely difficult to change. In the case of the ad hoc North American 48×40-inch whitewood pool, for example, even as customer preference has shifted gradually toward block pallets, stringer pallets endure as the standard.
- Switching cost: Once supply chains have been standardized around a particular pallet size, the cost involved in changing to a new standard size could be staggering. In 2002, for instance, an Australian report looked at the feasibility of switching from that country’s 45.9×45.9-inch standard size to the more popular 48×40-inch or 1200×1000 mm footprint to eliminate inefficiencies. While the analysis indicated that there were multi-billion dollar financial benefits to be derived from the move, it would have required an expenditure of $600 million over 10 years for new pallet purchase and other required equipment modification. Australia’s 45.9×45.9 footprint remains the standard in that country.
Clearly, a limited number of standard sizes will not work for every application. Custom or bespoke pallets are crucial for some operations. Nonetheless, standard pallets play a critical role in a great many supply chains, and the opportunity exists to expand the range of standard pallet options.