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When gas prices soar, there is also a rise in transport costs. The question that comes to mind for many freight forwarders and distributors is how to combat such soaring prices. The most logical solution for the logistics industry is choosing pallet pooling services.
Pallet pooling typically refers to leasing out or renting pallets from a shared pool. There is an associated reduction in costs since companies do not need to purchase new pallets or manage their own fleet of pallets.
Pallet pooling permits businesses to concentrate their daily supply-chain operations and capital expenditure on their core business and get rid of the costly expenditure and distractions of owning and maintaining a pallet inventory.
The most important benefit of pallet pooling is that they help companies take control of re-distribution costs. When maintaining their own store of pallets, businesses require active management to ensure that storage costs, asset losses and empty miles are kept at a minimum.
Additionally, disused or damaged pallets also come with the cost of disposing the pallets efficiently and then buying new ones to replace them. In such scenarios, it is vital to think about the benefits of using a pool both due to its convenience and cost saving benefits. A pallet pool system is a service in which the pallet pool provider maintains a stock of pallets, either wooden pallets or plastic, and then provides you with the number of pallets you require. Once the shipment has been made, they will also arrange for the pallets to be returned to their warehouse, saving you both storage and logistics costs.
In sum, without pallet pooling, when a company ships pallets of merchandise, they then need to arrange for the return journey of the empty pallets which can prove to be costly for the parties making the shipment. In addition, the receivers of the merchandise may not have the resources to store the pallets as well as the actual goods and may be forced to dispose of them, resulting in a major waste of perfectly good pallets.
Benefits of pooling
Thus, pallet pooling is win-win for all stakeholders. Following are the major benefits:
● Resource optimisation
By delegating the task of the supply of pallets to a pallet pooling company, businesses can clear up valuable floor space for their goods as well as dedicate manpower to other tasks than managing pallets.
● Traceability
Companies specialized in pallet pooling also provide tracking of parts which is more controlled and efficient.
● Specialization
The recycling, repair, collection, delivery, and transit of pallets are usually more effective when conducted by a specialized pool.
● Environmentally friendly
All pallets such as wood or plastic need maintenance and repairs in the long run, which are only profitable for a pallet pooling system.
● Standardisation
There is a rising trend of quality considerations becoming more and more demanding in the logistics industry. The design, materials used and measurements of pallets can help in determining an operation’s success.
● Flexibility
Depending upon how many pallets you need at a particular time, you can customise how many pallets you receive from the pallet pooling company without having extra, unused pallets take up valuable real estate.
There are some easy-to-spot benefits of pallet pooling as well as some not-so-obvious:
● Pooling permits a shift from CAPEX pressure while getting rid of storage costs.
● The pallet pooling provider covers the tracking aspect of the pallets in the chain of supply.
● Pooling helps reduce the pressure of CO-2 emissions dues to supply chain operations.
● Reuse of pooled pallets in Australia aids in reducing the requirement for making new pallets, causing a lower cost per trip compared to single-use pallets.
Role of pallet pooling in the circular economy
If executed effectively, pallet pooling is a system of pallet management which can help promote reuse of pallets and aid in saving money for users of pallets. It is also an eco-friendly best practice that is mostly not recognized as such. But this situation is being transformed with providers of pallet pooling being increasingly recognized as successful solution providers for the circular economy.
Pallet pooling is a practice that is over 70 years old. It is now reputed as a best practice for circular or shared economy. This reputation comes when companies are increasingly pushing strategies for reducing the impact of climate change, pollution and solid waste.
For many stakeholders, pallet pooling is a pretty straightforward solution that can speed up their efforts to shift to circularity. Supply chains weighing the option for pallet pooling can benefit from the experience of others.
Pallet pooling was launched by the US army in the throes of World War II; wherein there was sharing of pallets between supply plants. Down the decades, more pallet pools were formed like EPAL (Euro Pallet System), the GMA Pool in the US. Australia also saw the emergence of successful pooling platforms.
Today, pallet pools serve a crucial role in some supply chains, especially in the supply chains of FMCG (Fast Moving Consumer Goods) industry.
In sum, these are all some top facts about pallet pooling solutions. They serve an important role in making supply chain operations much more effective.