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Markets in Transition: Wood, Plastic Pallet Makers Team in Effort to Save Industry The following column by contributing author Rick LeBlanc, which pokes fun at the current debate over plastic vs. wood pallets, is completely fictitious in nature. By Rick LeBlanc Date Posted: 8/1/2009 (Editor’s Note: The following column by contributing author Rick LeBlanc, which pokes fun at the current debate over plastic vs. wood pallets, is completely fictitious in nature; note the future date at the beginning of the column, the year being 2014. None of the names or companies mentioned is real, and any likeness to a real company or individual is unintended.) Aug. 1, 2014 MILAN, Italy — The ferocious campaign between wood and plastic pallets is finally over with both sides battered and bloodied. The pallet industry has been decimated the last two years as confused, disillusioned pallet users around the world have rapidly discontinued pallets in favor of a new alternative, the Gliptenstein unit load process. Marketed as the Glipto line, starting with the Glipto 1000 model through the extreme performance Glipto Commander, the Glipto Inc. products have received immediate acceptance from former pallet users. “Let’s face it,” said Tango ConAmore, president of the European Logistics Institute, who facilitated this week’s emergency World Pallet Meeting in Milan. “Logistics decision makers just didn’t have time to wade through the claims and counter-claims — whether deforestation on one hand or the supposed dangers of decabromine on the other.” Both sides presented seemingly credible research to support their positions. “Pallets are a derived demand good,” added Amos Pinky, vice president of marketing at Pinky Pallets in Fresno, Calif., a niche manufacturer of inflatable pallets. “What the big boys seemed to forget is that customers are not willing to invest too much time or effort in their pallet purchase decision. All of a sudden there were unanswered questions. Pallets were making it onto board room agendas…and totally in the worst context possible—one of extreme concern about corporate risk posed by food safety or loss of environmental image.” It was this window of opportunity that allowed the hitherto unknown Raymond Gliptenstein an entry into the unit load base market. “Precision folding technologies, advanced membranes and sophisticated bonding agents are nothing new,” said Amos. The geometric folding design dramatically increases sheet stiffness and strength of both carton and the unit load base while using remarkably little material. Combined with advanced adhesives that significantly improved bridging capability, suddenly there was a competitively priced and totally recyclable alternative to the pallet. The American grocery industry looked at a recyclable unit load base as one option in the late 1980s and early 1990s before deciding on pallet rental. At the time it was not cost effective, but 35 years later the time is right. Over 78% of inbound groceries now move on the Glipto line. Pinky Pallets spotted the trend early and got on board with Raymond as business partners. “All the pieces already existed in terms of technology,” said Amos. “When the pallet manufacturers insisted on trying to destroy each other’s credibility back in 2008 and 2009, that was the opportunity Ray needed.” In the early stage Glipto Inc. approached major paper companies for backing, and the rest is history. This week in Milan, surviving pallet companies are attempting to claw their way back off the canvas to regain customer acceptance. “Wood pallets don’t really destroy the environment,” a plastic pallet representative said wearily. “In retrospect, the negative campaign against plastic may also have been a mistake,” said Steve Glomji of Tacoma Lath, Box and Crate, one of the handful of surviving pallet companies. “Our plan is to mutually promote the benefits of reusing pallets no matter what material they are made from. It’s all about pallet management and reuse.” Looking back at the collapse, Tango likened it to an exercise in Game Theory. “Both sides were locked in a duel,” said Tango. “Even if one side recognized early that it would be devastating to the overall industry to continue, if that side unilaterally stopped the negative campaign, then it would have been the loser. Typically, the way this works is that when both sides feel enough pain, they begin to recognize the need to work collaboratively. In this case, the realization never came in time. Customers got fed up and jumped on board with Glipto, which had a perfectly timed entry.” Gliptenstein and Pinky both hold 15% shares in multi-billion dollar Glipto Inc. Reporting from Milan, Italy and Fresno, California. |
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