The pallet, which was first used in the 1940s, has become the most optimal and practical means to ship goods all around the world. In fact, today, they are used by most companies which send, receive or store goods. Every year, billions of pallets are shipped across all continents in the world.
But pallets pose certain problems in the supply chain. Even today, several companies still purchase their own stock of pallets and have to face daily issues in their management, such as repair, transport and storage etc. But thankfully, there is a solution for these problems - that of pallet pooling.
What is Pallet Pooling?
Put simply, the pooling of pallets is the management and rental system of these items. Such a system permits a third party company to arrange the rental of pallets in place of purchasing them. This helps reduce the costs of logistics due to pooling pallets in various areas of the supply chain, such as production, distribution and shipping.
Pooling of pallets is thus an alternative to purchasing them. It comprises outsourcing the management of stock to a company that specialises in all aspects, from ordering to collection of pallets after use. It is a highly effective solution for pooling of items such foldable bins or IBC containers since it:
● saves time (for automation, handling, repair etc.)
● gets rid of hidden costs (storage, maintenance, replacement etc.)
● replaces the costs of purchase with a more profitable cost of operation
The pooling company takes up the responsibility for the pallets, making sure of their sourcing, maintenance, quality, timely delivery and retrieval following use. Because it is more flexible, environmentally friendly and cost-effective, the pooling of pallets has become an authentically sustainable system of management. It enables the meeting of current challenges of the industry and enhances the profits of supply chains.
The Cycle of Pallet Pooling
The pooling of the pallet system works in a closed circuit, based on the circular economy system. Therefore, after a business sends the details of specific needs of pallets to the pooling company, the latter will deliver these directly to the production or distribution sites.
After pallets have been utilised and sent to distributors, they are collected directly and transported to service centres. After this, they may be repaired and sent back to the circuit for re-use.
Uses of Pallet Pooling
Though pallets are the standard units in logistics currently, their purchase and management can become a major investment for companies, often using up valuable resources and time. Their management is a distraction for companies, diverting them from core business activities.
The following are some disadvantages of buying pallets:
● High costs
The purchase of a total pallet pool will have major financial repercussions for any company. Besides the expense of purchase, there are many other fees associated with managing your own pool of pallets, such as storage, logistics and repair costs.
● Administration and management
Besides the burden of expenses, the process of purchase of pallets is a drain on the time of the logistics team. The management and administration of pallets can become a genuine headache, forcing a business to devote significant resources to it.
The following are the benefits of pooling pallets:
● Reduction in cost and transparency
There is a need for clarity for effective management. You must gain clear information so as to gauge potential sources of cost savings.
Management of pallets can involve unforeseen costs like repair, replacement and purchase, whereas the pooling of pallets features transparency at the heart of its operations. It offers clear forecasts and accurate invoices, which permit a business to make informed decisions.
● Flexibility in logistics
No matter whether there is a surge or dip in business demand for pallets, you can be sure of access to the right number from a pooling company. No need to worry about a shortage during a surge in business activity, or the accumulation of unused pallets in a warehouse.
● Simplification of the supply chain
Pooling of pallets simplifies the automation of the supply chain. Say goodbye to broken pallets and stalled deliveries. In the system of pooling, every pallet is inspected regularly and repaired prior to being returned to circulation. Thus, you can ensure that pallets are always ready for use in the automated system for logistics.
● Reduces impact on the environment
The pooling of pallets contributes to sustainable development. As regards pooling, every pallet is repaired after use, made ready for re-use, and features a much longer lifespan compared to traditional pallets. The use of sustainable pallets lowers the need for resources required for their production, implying less use of wood, less waste generated in manufacturing and reduced emissions of carbon dioxide. Thus, the selection of pooling of pallets is a win-win situation for both the environment and companies.
In sum, these are some of the top facts about pallet pooling.
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