Birthdays are a time to celebrate the past year and look forward to a better tomorrow. They are also a time to mark milestones and notice the way that a person or thing has grown or transformed through the years. As the EUR-pallet, commonly known as the the “Europallet” in North America, celebrates its 50th anniversary this year, any thoughtful observer must recognize it as one of the greatest and yet least appreciated logistical achievements of the modern supply chain. Not only is the pallet the workhorse of global shipping, the EUR block pallet pool is the world’s largest standard with over 500 million.
Unlike the 48×40 GMA footprint in the United States, the official EUR-pallet matches a very strict, patrolled standard in terms of design, performance and quality. The success of the EUR-pallet offers some important lessons for those in the United States looking to develop a comparable industry cooperative pool in this country. The EUR-pool is truly the gold standard when it comes to quality control and policing of a cooperative pool system even though the actual footprint size is less efficient than many others.
EUR is a standard that is owned and controlled by the International Union of Railways (UIC). All EUR-pallets are manufactured and repaired to a tight specification that is monitored by a number of international organizations. By far the largest of these is the European Pallet Association (EPAL) which has been in operation since 1995.
History Lesson – Beginnings of Pallet Standardization In Europe
What is now the EUR-pallet pool started back in 1961 as palletization was in its infancy around the globe. European railroad authorities with the UIC recognized the need to develop pallet and platform standards to facilitate a smooth flow of goods across Europe.
UIC’s Freight Director Oliver Sellnick said, “Fifty years ago the railways looked for a way of making the carriage and storage of retail goods more efficient. Their solution was to design and construct a wooden block structure enabling retail goods to be kept together in loading units. This resulted in the birth of the ‘Europallet’, the flat wooden four-way entry pallet marked with the initials ‘EUR’ in an oval and the acronym of the registering railway having approved the manufacturing of the pallet in compliance with UIC rules.”
Evolving Pallet Specification?
The specifications for the manufacturing and quality of wooden pallet plates are defined in UIC Leaflet 435. If you take a look at technical specifications back in the 1960s, you will notice that there are very few differences to the present-day EPAL/EUR pallets. It is a quality standard that has stood the test of time for almost 50 years. Initially, the standard was managed by the European Pallet Pool (EPP), and later transferred in the early 1970s by the railways to the European Pallet Association (EPA). EPAL is the primary oversight organization today.
EPAL has branded its standard as the “ideal worldwide logistics solution.” Although the quality controls and construction requirements are models for others to emulate, the 800 x 1200 mm footprint is less efficient that the 48 x 40 inches (1219 x 1016 mm) used in North America or 1000 x1200 mm popular in Europe, or the 1100 x 1100 mm common throughout Asia. Responding to this critique, EPAL recently announced its intention to introduce three new pallet designs: 1200 x 1000 mm, 1000 x 1200 mm, and 800 x 600 mm. It is also making changes to some of its existing designs and is introducing a “forgery-proof quality seal” for its EUR box pallets.
The EUR footprint size evolved over time based on the needs of carts used drawn by horses and antiquated vehicles that are much smaller than the trucks, rail cars and sea containers used today.
Stan Bowes, former president of EPAL, said, “The 1200 x 800 is perhaps one of the most inefficient sizes in common use. My own estimate is that a 1200 x 1000 can hold 40% more product at not much more cost or weight per pallet, and will allow movement of the same amount of goods with a similar reduction of movements.”
Even though EPAL is willing to explore new footprint sizes, Bowes doubts that the 800 x 1200 footprint is going away any time soon in Europe. He explained, “The current size and specification is so entrenched in mainland Europe that it will never be changed. Had it been 1200 x 1000 based it would have been easier to introduce into the United States.”
The UIC recently stated that it is strongly committed to pursuing standardization work on pallets with an eye to the future, particularly with regard to optimizing quality and possibilities for universal use. Its work is focused on revising pallet quality criteria and introducing new types of “EUR” pallets (standardization and quality assurance of a new revised type of half-pallet, folding wire mesh box-pallet and Asian pallet sizes, etc.).
Lessons from the Europallet Experience
Pallet producers and recyclers in the United States would love to have something in place similar to the Europallet in terms of a policed, accepted and respected standard. But there are a number of factors that make the Europallet success story somewhat difficult to obtain in the U.S. market. First, the EUR standard developed because it was driven by a major trade force in Europe, the rail authorities. CHEP did the same thing in the United States in the early 1990s when it launched behind the support of Procter & Gamble and other major food producers. You must have champions at the customer level – key players in the supply chain that can drive acceptance through advocacy and possibly financial penalties.
Second, you must embrace a collective mindset. This is difficult for independent pallet entrepreneurs to accept. They are accustomed to running their own business their way.
David Lee, CEO of PECO Pallet, said that EPAL holds to a strict standard that would not be accepted by some independent pallet companies in the States and that there are always incentives to cheat. EPAL has actively policed its standard and gone after anyone who has tried to water it down, make unauthorized pallets, or confuse customers. Most recently, EPAL has engaged in a legal battle over the “World” branded pallet that is very similar to the EPAL pallet. EPAL won a lawsuit in Germany against the marketer of the “World” pallet.
EPAL’s tight controls may be a major reason for the Europallet’s success. Steve Klinkefus, president of Compliance Packaging International, said, “By making a spec as tight as they have made it, they have forced a level of minimum compliance even from those manufacturers who would actively try to circumvent it.”
Third, somebody has to pay the cost to build up the initial pool. CHEP did this in the United States by entering the market with more than $200 million to invest. Any real effort to launch a formidable cooperative pool in the United States will require significant investment to establish. Sure, these funds can be obtained from 500 little companies instead of one or two big investors. That’s what the European pallet producers did. But, it still takes money to make money when it comes to pallets. And it requires a common commitment and courage to make it work. The EUR-pallet exists today because everyone involved had the courage required to make it work.
Any effort to repeat the success of the Europallet must also learn from their mistakes. The footprint size is a key concern. You must make sure that your pallet meets industry requirements and will be a good fit in the long run as logistics trends evolve. The proposed industry cooperative pallet design appears to do a good job of following the established patterns developed by the private pallet poolers in this country. Now the main question is, “Can the U.S. pallet industry work together and raise the funds needed to compete with an industry cooperative pool?”
The lessons are out there. Are we willing and able to learn from them?
