With customers looking to cut costs and protect assets, recylers are increasingly toying with the idea of setting up private networks for customers. Steve Mazza, president of S&B Pallet Co. in
Steve’s program revolves around the fact that the current whitewood exchange program allows food distributors to take ownership of emptied whitewood pallets to be either used as they deem appropriate or sold as cores to pallet recyclers. Neither the pallet recycler who supplied the pallet nor the grocery company that used it benefits directly from the value of the pallet once it is delivered under load. Thus, one of the current system’s benefits, the value of the pallet, does not appear as a direct financial credit to the grocery company that purchases it for use.
Steve reaches an agreement with his grocery customer to lease him instead of sell him a whitewood GMA style pallet. Steve can lease this pallet at a lower price than he would expect to sell it because he will take possession of a like pallet at the grocery distribution center to which it is shipped. He can then sell the core to one of his network recyclers. A bill of lading tracks and authenticates leased pallets through to the distribution center. No attempt is made to mark and keep track of specific pallets. Instead the lease and retrieval is based on a ‘like kind’ concept.
This new leasing concept offers flexibility. It is not restricted to used pallets, although most will initially probably be recycled. There is a growing interest in block pallets emerging in the grocery industry. This program has the flexibility to offer any style of pallet as long as it works out economically and logistically. Steve emphasized, “My system uses the recycling network as it exists today. It gets recyclers into supply chain management, out of the pallet buying and selling game.”
