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Rehrig Pacific Pallet Is Warmly Received by Soft Drink Bottler
Rehrig Pacific says its new plastic beverage and general duty pallets have crossed a hurdle, providing superior impact resistance and stiffness at the same time.

By Rick LeBlanc
Date Posted: 9/1/1999

ERIE, Penn. — Plastic pallet companies have often been at odds to provide both superior impact resistance and stiffness at the same time, but Rehrig Pacific believes it has crossed the hurdle with the introduction of its new beverage and general duty pallets.

Made from co-polymer polypropylene resin, the pallets have been enthusiastically accepted by customers such as the Gross & Jarsen bottling plant (Pepsi and Dr. Pepper) in Columbus, Ohio. "These pallets have been tremendously successful," said Russ Morten, the bottler’s vice president of operations.

Rehrig Pacific plans to market the new 37x37 and 48x40 product lines through its own sales staff as well as by partnering with wood pallet companies. "We’re hoping that we can partner with wood pallet distributors where those applications make sense," said Phil Thwaits, Rehrig Pacific’s division manager for its facility in Lawrenceville, Ga.

"We at Rehrig Pacific do not view the wood pallet industry in any shape or form as competition," he added. "We feel that wood pallets are going to be around forever. Plastic pallets are only a small minority, but we hope one that will continue to grow. We have a sales force...but are looking to work with wood pallet sales people and distributors also."

Plastic transport packaging may be getting a second look from some soft drink companies following Coca-Cola’s recent problems in Europe. In Europe, Coca-Cola recalled products after some consumers got sick. Coca-Cola officials blamed the problem in part on a disinfectant that was sprayed on wooden packaging at a Coca-Cola plant in France and leaked onto the underside of soft drink cans. People who got sick probably fell ill from inhaling fumes given off from the contaminated cans.

Coca-Cola’s recall "has raised the level of interest in terms of plastic pallets," said Bill Widmann, division manager of Rehrig Pacific’s Erie facility. "People are giving us a second look."

Gross & Jarsen introduced the new Rehrig Pacific beverage pallets into its Columbus plant earlier this year. "Customers absolutely love them," said Russ. "The largest issue that faced us was the return of the pallets and whether customers would accept the increased pallet deposit. It went up from an $8.00 charge to $30. Customers could balk at that."

The Gross & Jarsen sales team promoted the benefits of the new pallet program, however, including the elimination of wood chips, reduced product damage, and an extremely attractive appearance for retailers. "Our sales people went to the customer and explained the importance of the change," Russ recalled. "They came back and said that we couldn’t change fast enough."

Pallet loss, a key concern of the retailers at first, turned out to be negligible. "One retail outlet lost seven or eight of the pallets shortly after we started," said Russ. "We found out who had picked them up, and we made contact." The pallets were promptly returned, and loss has not been a factor since.

"Now," Russ reported, "trucks no longer come back with pallets from other companies intermingled." In the past, pallets belonging to Coca-Cola and Pepsi bottlers might be mixed together. If they appeared to be the same size, they were run through the system, but the lack of uniformity could cause problems for automated equipment. "Now, only blue pallets come back," said Russ, referring to the new Rehrig Pacific pallets, which are the same as Pepsi’s color scheme and have both Pepsi and Gross & Jarsen markings. All the bottler’s products are palletized onto the plastic pallets.

"Once we got past those hurdles, the response has been very enthusiastic," said Russ. "And from the production end of it, the Rehrig pallets have surpassed our expectations. There are no spills around our palletizers, and our pallet repair bill has gone down to zero." Gross & Jarsen also has stopped buying slip sheets, which it previously used to cover the decks of dirty pallets in order to protect product packaging.

The company has experienced a decline in worker compensation claims as a result of the change to the plastic beverage pallets, according to Russ. Besides eliminating the need for a pallet repair operation, the lighter plastic pallets are easier to handle. Another attractive feature of the Rehrig Pacific pallets for soft drink applications is the substantial bottom deck coverage; weight is distributed more effectively when soft drink unit-loads are stacked, minimizing damage and better utilizing warehouse space. The improved load stability also has reduced the need for stretch wrap on the finished unit loads.

Original projections were for a 25-month return on investment, but Russ believes Gross & Jarsen will recoup its investment sooner. "One thing we don’t have a handle on yet is how much of our increased up-time is related to fewer pallet problems. We have a clerk going through the (production) logs to determine how many problems were due to pallets. But we know for a fact we have increased efficiency with the plastic pallets." Gross & Jarsen recently decided to add the Rehrig Pacific plastic pallets at its other three plants.

Rehrig Pacific is well known as a supplier of material handling containers, such as beverage crates, bakery trays, roll-out carts and curbside recycling boxes. Its new collapsible RPC (reusable plastic container) is being used by CHEP in its RPC rental pool. "We have been a crate company, and all of our crates are HDPE (high density polyethylene)," said Phil. Rehrig Pacific plants are located in Los Angeles, Calif., also the site of its corporate headquarters, and in addition to Erie, Penn. and Lawrenceville, Ga., in Dallas, Kenosha, Wis., Raymond, N.H., and Mexico, Brazil, Chile, Hong Kong and Belgium.

The privately held company started in Los Angeles in 1913 as a manufacturer of wooden crates for milk bottles. Its choice of material evolved over the years to meet the needs of its beverage industry customers; it shifted from wood to metal wire in the 1930s and to injection molded HDPE plastic in the late 1960s.

More recent advances in plastics technology brought about the potential for large-capacity molds. Although initially more capital-intensive, Rehrig decided that injection molding technology would allow for more sophisticated designs that would increase strength and reduce weight while maintaining precise tolerances. Injection molding also has the ability to vary wall thickness throughout the same part so that critical load-bearing and wear points may be strengthened. Rehrig Pacific has gained experience in the past decade in injection molding of larger parts or products, notably its successful roll-out cart for curbside garbage collection.

Rehrig Pacific entered the pallet market last year with its polypropylene beverage and general purpose pallets. The plastic pallets are manufactured at its Erie plant. "Production requires expensive, high-tonnage machines," explained Phil. "Given the current size of the market, we picked one location to centrally locate our equipment."

Polypropylene, while a popular alternative material for pallets in Europe, has not been widely used in North America for pallets. Most plastic pallets in North America continue to be made of HDPE. "The decision to go to a high-density co-polymer polypropylene for our pallets wasn’t a decision we made in a vacuum," said Phil. "We did our research. We found that the performance characteristics we needed were better with polypropylene. Stiffness versus impact strength has always been a trade-off in the past. Polypropylene provides the same kind of impact resistance as HDPE but much greater top load strength and stiffness."

As the leading supplier of crates to the soft drink industry, Rehrig Pacific’s sales staff has been inside soft drink bottling plants for many years. "We know these people and we know their needs," said Phil.

Over the years, the company’s representatives have noticed two major complaints from bottling customers about wood pallets, according to Phil. "One is the repair cost needed to maintain them. The other is the down-time at the palletizer caused by missing or damaged boards or protruding nails."

In addition, storage space at soft drink bottlers is at a premium, and stacking two or three unit-loads optimizes warehouse utilization. If a wood pallet has a missing slat, stacked unit-loads can become unstable.

Pallet variation is also a concern and can cause problems at the palletizer. "Wood pallets may come from many manufacturers," Phil noted. "There may be slight differences among them. Our plastic pallets, on the other hand, are uniform and therefore increase efficiencies."

One factor that has generated interest in the soft drink application of plastic pallets is the increased use of plastic for in-bound cans and bottles. "A lot of packaging companies that sell bottles and cans began purchasing plastic pallets," Phil said. "More and more frequently, they are coming into bottling plants on plastic pallets. Our customers are saying, ‘We like the concept, but the size, strength and design are not suitable for our finished goods.’ " Interest from the bottlers influenced Rehrig Pacific’s decision to develop a plastic beverage pallet.

Through its soft drink crate business, Rehrig has a sense of how well customers have been doing in managing their reusable packaging. "Once a customer establishes a flow, they know how many to re-order," noted Bill. Some re-orders may be related to incremental business growth while others are replacements for lost packaging. "Generally speaking, the East seems to have more problems with control than the Midwest," he said.

"With companies like Gross & Jarsen, owners are involved," Bill said. "They have made a significant investment and are actively committed to the project’s success. It’s a people issue. It’s really about attention to detail, how many resources they want to provide to where the leaks are, and how to deal with them."

The beverage industry underwent a similar transformation when reusable crates made a comeback in recent years, Phil noted. When the industry switched earlier from glass bottles to plastic bottles, it also shifted to a one-way transport packaging system; recovery and retrieval of bottles and crates was eliminated. However, when the market looked at the opportunity to go back to a reusable crate, concerns were raised again about losing containers. For the most part, those concerns have been successfully addressed, according to Phil, who estimated that about 98% of two-liter soft drink bottles now are shipped in reusable crates.

"Those companies found that by using reusable crates they could get a better return than from corrugated," Phil said. "We believe the same transition will take place with beverage pallets. The change will take hold in different regions at different times, but that they will be ultimately successful in closing those soft drink loops."

The 37x37 and 40x48 Rehrig Pacific plastic pallets are far from a one-size-fits-all solution, Phil observed. "There are a lot of different answers for different niches in the material handling market," he said. The pricing of the plastic pallets limits them to applications where loss can be minimized, such as the Gross & Jarsen bottling plant.

"We know for a fact that we’ve increased efficiency," said Russ, who believes that his bottling plant has picked up a 1.5% to 2% gain in efficiency since implementing Rehrig Pacific plastic pallets. "If you are looking at a plant that puts out 20 million cases a year, that increase amounts to a lot of cases. In reality, you are paying a lot less for the pallet than you think. I believe it is a win-win situation for everyone."

For more information about Rehrig Pacific’s pallets, call the company at (323) 262-5145 or visit the company’s Web site at www.rehrigpacific.com.

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