Could a New Pallet Be the Starting Point for More Sustainable Supply Chains?

A bold statement perhaps, but one borne out of long standing frustration with the slow if not stagnant forward movement towards implementing more sustainable supply chains.

In 1985 I established my first retail store cardboard recycling initiative which not only was good for the environment, but was also a financially lucrative initiative saving the Hudson’s Bay Company $100’s of thousands of dollars annually at that time.

However as more companies came on board such programs, the savings component disappearred; as in the case of cardboard, widespread recycling drove the amount recyclers would pay into the ground due to the resulting oversupply of cardboard.

Fortunately when it comes to the potential for new sustainability initiatives such as lighter composite pallets versus wood pallets and the associated carbon credits, we are only in the early days of such programs and the ability to both monetize both potential savings opportunities while at the same time reducing your company’s carbon footprint is now.

And as many have heard me share before, 75% of most company’s carbon footprint comes from the supply chain, so this represents the key area of focus when any company commits itself to a program of carbon footprint reduction.

Would also humbly suggest that even supply chain professionals and business leaders, still not convinced of the need for advancing the sustainability agenda, also pay attention in this case as at a minimum this represents an opportunity to generate cash money savings from their supply chains.

The new pallet in this case is the Axios composite pallet and recently I wrote about the potential benefits of utilizing composite pallets in another article ‘Is it Time For the Widespread Adoption of Composite Pallets?’ which you may wish to review for greater detail.

The below chart highlights some of the advantages and disadvantages of Composite pallets versus Plastic pallets as a quick refresher.

And in this case I’m highlighting the Axios pallet as it’s the only one I’m aware of in the market today which has developed and implemented all of the required components to make such a program work.

These components include manufacturing a pallet which meets all the requirements identified above, a monitoring and measurement system to track and record the related movements to record/calculate captured environmental benefits and last but not least the verified certification of the new pallet and process to be able to claim the carbon credits that are created by using these pallets.

So let’s start with the hardcore climate change deniers out there who still see no reason to reduce the carbon footprint of their supply chain. Why would they want to initiate a composite pallet program? The answer is easy and is represented by hard dollar savings opportunities including fuel savings from reduced pallet weight on vehicles, direct sale of the carbon credits generated and last but not least an RFID pallet platform which can also be used to automate logistics processes such as receiving and shipping to reduce costs, speed product movement and improve customer service levels.

For those of you already on board with the sustainability agenda you can of course gain all of the above benefits, and additionally any multi-nationals can also consider transferring the carbon credits generated by such programs in North America, to other divisions in world regions with government mandated carbon programs to help offset the carbon generated in their supply chains.

At the same time all we can do is heartily encourage the various levels of government to look at such programs and where possible at a minimum throw their weight behind education and incentives to help drive these wider supply chain initiatives with both supply chain sustainability and cost saving benefits forward.

So why do I consider widespread implementation of RFID enabled composite pallets as a key starting point for increased supply chain sustainabilty versus other potential programs?

Well as most know there have been a number of sustainability programs launched and proliferated across North America including recycling, LEED, energy efficiency, Smartway and many more, all of which have lead to success in their targeted areas and segments of the supply chain.

However it seems we still cannot get over the hump to implement full supply chain sustainability initiatives on a widespread basis. The reason I feel that these pallets have the ability to do this is their cross industry ubiquity in supply chains and also their use in almost all aspects of supply chain and in many cases pallets acting as the connection point between transportation modes, buildings and even various processes within buildings.

Only time and the interest/support of logistics professionals like you will tell if RFID enabled composite pallets can be the key starting point for the wider implementation of supply chain sustainability. But for someone who’s been in the logistics business for over thirty years they represent the best potential option I’ve seen to date!

Cheers

Jeff Ashcroft

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