Part 2 – Reusable & Rackable Pallets

Welcome back! This is Part 2 of “Why All Plastic Pallets Are Not Created Equal”, where we walk you through the ins and outs of plastic pallets, and arm you with the information you need before you make your next pallet purchase!

Last month we talked about pallets as an expense. This month we’ll focus on pallets as an asset. When a customer plans to reuse a pallet over and over, the pallet is considered an asset. Plastic pallets were born of the concept of reusability so that customers could buy pallets much less often. In these applications, pallets can be accounted for as depreciable assets, and return on investment (ROI) is the key factor behind a purchasing decision.

Performance characteristics for these types of pallets become very important because our customers are looking to save cost over the long run, and complex financial and operational considerations have to be made. In addition, the environment that the pallet is subjected to is typically harsher than that encountered while shipping product from A to B: care must be taken to consider how the pallet will provide ROI for the operation.

Sometimes customers get sticker shock when they hear of a pallet costing $60, $70, or $125. This initial cost must be ignored.

The return on investment must be the priority. For instance, a $70 plastic pallet that lasts for 3 years in an operation is far cheaper than a $6 wood pallet that lasts for 3 weeks, and payback is received in approximately 8 months. These types of plastic pallets are purchased because internal operations are looking at cost reduction strategies.

We usually call these types of pallets reusable pallets, distribution pallets, racking pallets, warehouse pallets, captive pallets, and so on. The plastic material, design, and processes for these pallets are different than those for single use pallets, because the pallets have to be stronger and more durable to yield an effective ROI.

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Go to Part 3 in this series. Read about Pallet Materials and how you can avoid a common mistake!