International Commerce Impacts U.S. Pallet Demand
Many Products Imported to U.S. Not Palletized
By Chaille Brindley and Rick LeBlanc
Date Posted: 4/1/2004
"We do not receive any significant amount of product palletized from imported goods," said Ron Reed, of Wal-Mart Stores,
David Mezzanotte, President CHEP
In many parts of the world, the cost for paying labor to floor load the product is virtually nothing. Without the pallets, the product manufacturer can get even more product in each container, which reduces the shipping cost per item. With international shipping rates starting to go up, saving space has become even more of a priority over the past year. All the international regulations impacting wood packaging due to phytosanitary concerns also provide another reason why some importers might find it advantageous to floor load items.
As companies use new measurement techniques, such as Six Sigma, that look at the entire supply chain, more international shipments may get palletized at the point of manufacture. If major retailers and distributors push the suppliers, they will likely comply, which would reduce domestic demand for new and used pallets.
It really all comes down to the freight savings versus the higher domestic pallet and labor costs of palletization. Which is more expensive to the total supply chain? If a container of electronics comes into
Changes in the hours of service regulations for truckers may also impact the cost equation. Some trucking firms are charging "detention fees" for delays in loading or unloading freight. Palletization does make this process much quicker, which would help receivers avoid these fees and might make international palletization a more attractive option.
"Only a small percentage of the total shipping space is taken up by the pallet, and the cost savings of the labor and material on the other end is huge," said David. "CHEP has been doing some importing into the
There are some goods that just canít be floor loaded very easily due to weight or bulkiness. Items such as heavy equipment, chemicals in large drums and other bulky products are more than likely palletized.
"Itís not odd to see a mixture of palletized and non-palletized goods in one container," said Heidi Larsen, vice president of sales for
At the end of the day, whether or not to palletize loads coming into the
Michael Rummelhoff, vice president of operations for Meyer Corp., said, "Due to the extreme increases in ocean freight coupled with the fuel surcharges, it is absolutely imperative that we make complete use of every cubic inch of space when we transport goods. The loss of cube for an ocean container, given a 45-foot high cube, is approximately 15%." Meyer is a leading American cookware company with most of its product manufactured overseas.
One factor impacting international palletization is the lack of uniformity in international size standards. With the
Barry Horowitz, a transportation consultant marketing GE SeaCell containers, said that some shippers may opt to palletize because it offers the convenience to deliver small segmented loads to the customer directly out of the shipping container, which allows the shipper to make multiple stops while altogether bypassing the
Even if palletization is a major advantage for international transit, many foreign countries currently do not have enough modern materials handling equipment to effectively utilize the shipping platform. Letís just take one major exporter to the Untied States Ė
According to one consultant, "Most warehouses (in
All of these trends tend to point to the fact that increased imports may not be such a bad thing for the
Are you in danger of being squeezed out due to shifts caused by international commerce? The only way to know for sure is to talk with your customer and find out about their supply chain. If they have high domestic palletization and labor costs, you may be out of luck.
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