Goplasticpallets.com Managing Director, Jim Hardisty, explains how retailers can generate revenue from owning a pool of plastic pallets.
The food retail industry continues to become more demanding. Like many, it is reliant on international product supply and distribution. Spanning multiple stakeholders from local and international suppliers and manufacturers, distribution hubs and finally out to the stores, each counterpart is responsible for the smooth running of their “link” in the chain.
With this in mind, it’s no wonder that we’ve seen plastic pallets becoming ever popular within the food retail industry. Not only because they are hygienic, durable, consistent, and designed with the application in mind, but because they offer a high return on investment.
Historically, large food retailers have relied on wooden rental pallets, but now, plastic pallets are being recognised more and more as a resilient choice with a longer “working life” – four times that of wooden pallets. In fact, we’ve seen retailers starting to actively cultivate income from creating and using their own pool of plastic pallets.
Generating a revenue stream for major retailers
After realising the longterm benefits, many of our customers have taken the opportunity to generate a revenue stream by renting pallets from within their pool, to suppliers and other partner businesses.
Furthermore, owning the pool creates a group sense of responsibility for the pallets, which are now seen as “assets”. With several parties invested in the successful running of the pool, there is greater inherent control.
A pool of owned plastic pallets provides the owner with greater flexibility and a better return – without incurring the costs associated with renting.
If plastic is the superior choice, why are so many businesses still using wooden pallets?
Many retailers still use pools of wooden rental pallets with the perception that they are cheaper to use and if any are lost or damaged, it’s not such a great burden to them. However, when you factor in delivery and collection charges, pallet “rent” and any additional penalties obtained for lost or damaged pallets, the true cost of renting can be incredibly high. Sometimes much higher than anticipated in the long run.
Rental pools do have a lower initial cost, which certainly has its appeal. However, much like choosing to rent a property or grasping the opportunity to take out a mortgage, the real question should be: Why put money in someone else’s pocket when you could invest in your own, long-term asset that will pay back dividends. This is the empowering mindset that many of our customers are now taking.
The benefits of implementing an owned pool of plastic pallets
In a typical plastic pallet pool, responsibility for the pallets is shared. The retailer or distribution centre receiving the palletised goods are accountable for collecting the loaded pallets and then inspecting, sorting and cleaning them.
Not only does this model suit the owner, but proves to be more virtuous for the other parties in the chain. Distributors prefer plastic pallets because they are significantly lighter, improving manual handling conditions; they enable the dispatcher to put more product on a truck and increase trailer fill; and they deliver more trips per life cycle than wood.
Furthermore, plastic pallets are made to a higher standard, with precision consistency when compared to wood. Impressively, a pool of plastic pallets can be created using only one type and style of pallet. In the scenario of a food retail supply chain, it’s wise to invest in a durable, consistent plastic pallet like the APB 1210 Pool Perforated 5R. Perfect for large, in-house retail pools, it will withstand the strain of repeat use.
A complete logistics loop solution in one pallet. The APB 1210 Pool Perforated 5R is an ideal, heavy duty solution because it can be used right through the logistics process, from supplier to the retail distribution centre and into the store for retail.
This model and type of pallet is especially beneficial to all major supermarkets, retailer with multiple stores and also franchises with high volume supply chain. Moreover, by using hygienic plastic pallets that are compliant with pharmaceutical and food handling regulations, produce can go straight out onto the shop floor, removing the need to transfer it onto different pallets.
A highly suitable medium duty pallet, the IPS 1210 Medium M5R is ideal for transporting light loads, often in small batches, such as fresh fruit and veg, chilled meats; garments and household goods as retailers continue to broaden their in-store offering, and in-store displays.
The benefits of using plastic pallets over wooden rental pallets speak for themselves. Plastic pallets not only offer supreme durability and consistency, but in owning a pool of plastic pallets, the retailer could utilise one type of pallet throughout the logistics chain and actually make money in the process.