Customers generally do not want to spend more for pallets than the minimum required, but they are almost guaranteed to up the ante when the wrong pallet is a show stopper.
So when a time sensitive international shipment is at legitimate risk of quarantine at a Chinese or European port, for example, or a ‘big box’ retailer insists on a certain standard of pallet (and they really mean it), then customers will loosen their wallets and pay extra to ensure that pallet problems do not derail their shipments.
Case in point: customers seem willing to pay a premium to avoid pallet rejection or re-piling charges at some of the large retailers that play hardball when it comes to pallets.
There also seems to be a difference in perceived risk between the ‘big boxes,’ for example, and conventional grocery warehouses. One has more pedestrian traffic with customers and employees at risk from pallet failure while the other exposes only employees to risk. One wonders if the response is overkill at the ‘big box’ or if there is just as much liability exposure at the others.
The pallet program at U.S. Gypsum is one example of how retail concern about pallet liability has rippled back up through the supply chain — and fundamentally changed a company’s approach to pallet procurement and management. Because of concern about the risk of liability related to pallets, U.S. Gypsum decided to exert greater control of pallet procurement. It did what businesses often do when they want to quickly re-establish control: U.S. Gypsum centralized the function.
Working with the Pallet Alliance, U.S. Gypsum undertook to have all types of pallets used throughout its 45 North American plants evaluated with the Pallet Design System (PDS), the computer program developed by Virginia Tech and the National Wooden Pallet and Container Association. As a result, several pallets were redesigned. U.S. Gypsum now has a defensible paper trail for each type of pallet it uses for unit loads.
It seems to me that this practice would be a good approach for pallet suppliers to take in order to limit their risk exposure and to help their over-zealous customers avoid over-spec pallet requirements.
More than ever before, workers compensation or OSHA inspectors are looking beyond immediate workplace hazards they spot on the warehouse floor. They are burying their noses into a deep trail of paper work.
Was there an injury? Where are the investigation and witness reports? What were the recommendations? Where is the documentation that the recommendations were implemented and that follow-up monitoring and other steps were taken? Were there subsequent related injuries?
Where pallet-related injuries have occurred in the past, many warehouses were more likely to side-step these issues by simply demonstrating the existence of a written company pallet policy. However, health and safety inspectors are becoming less satisfied with a document that only shows a company intended to exercise safety initiatives. Increasingly, they want proof — a paper trail that documents that action really was taken.
The issue of liability from pallet failure is nothing new. It rears its head when there is a serious injury or fatality or major product loss. Dr. Marshall (“Mark”) White, director of the Virginia Tech Pallet and Container Research Laboratory, spoke on the topic of liability at the National Wooden Pallet and Container Association annual meeting several years ago. Looking back at his comments, his main points are well worth re-iterating:
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There are two general causes of pallet failure: selection of the wrong pallet and improper use of correctly designed pallets.!
In order to reduce exposure to litigation, pallet suppliers need to understand how the pallet will be used. Many courts have ruled that such an audit is the responsibility of the pallet vendor. Following the development of prototype pallets using PDS, field tests should follow. Finally, a detailed pallet specification should be written.!
Since elimination of over-designed pallets also removes a ‘cushion’ that compensates for certain errors, pallet companies should implement statistical quality control methods.!
Recyclers are vulnerable to lawsuits, too. At the time, Mark recommended that they obtain copies of the database available on the strength of recycled pallets. However, now the latest version of the Pallet Design System also may be used to measure the performance of and to design remanufactured pallets — pallets assembled from recycled components. The software also may be used for pallets made of a combination of recycled and new components.!
The last important step in limiting liability is to instruct customers on safe handling practices, including inspection during use.When a business is legitimately threatened by emerging pallet requirements, you can rest assured that it will respond. New International Plant Protection Convention regulations and growing concern about pallet liability are two areas that are pushing back ripples of change through the supply chain. Whether it ends up being a competitive advantage or disadvantage depends largely on how you prepare.
