Do you find yourself repeatedly going head-to-head with other pallet suppliers on pallet price? One way to differentiate your company from the competition is to offer valuable pallet-related services to customers, such as pallet control services.
Pallet-using businesses may have problems such as pallet loss, difficulty retrieving pallets, and related issues, including record keeping, training personnel, liability exposure, and high level executive report.
In the U.S., many leading pallet companies offer a variety of pallet management services. Internationally, pallet control has long been a very important consideration, especially where businesses use high value pool pallets; if the pallets are lost, the rental company or trading partner must be compensated.
What follows is a description of two companies that provide pallet control services. Pallet Loss Prevention is based in Australia, where the consumer products pallet pool is dominated by CHEP and Loscam is the chief competition. The Pallet Queen is located in Canada, where the main pallets used in the consumer products supply chain are CHEP and pool pallets of the Canadian Pallet Council.
Pallet Loss Prevention
When Australian pallet users find themselves with a horror story of liability for missing pallets, they increasingly seek help from John Stuart of Pallet Loss Prevention.
One such case involved a third-party logistics provider with a big problem. It was in the final week of a logistics contract, and its client was holding it liable for about $100,000 (Australian) worth of lost pallets.
“We flew up to Sydney and worked through two days and two nights analysing data,” John recalled.
John’s consulting team found the lost pallets, and the customer was able to finish the contract with no liability. “It was a good outcome as it had appeared to be a lost cause,” John said.
John launched his consulting business in 2002. It initially was called JV Support Services and was positioned as a logistics consulting company.
Venturing out on his own was a major step after having held executive roles for large corporations. John had been the general manager for supply chain for a major Australian meat processing company and earlier worked in senior logistics management roles for Simplot and Cadbury Schweppes.
“I had seen substantial amounts of money lost through companies having difficulty in controlling their pallets,” John observed.
As a consultant, increased emphasis on pallet management led John to recently change the name of his business JV Support Services to Pallet Loss Prevention. The company originally operated from John’s home but has expanded to a new office in Bulleen, a suburb of Melbourne. The company has six full-time employees. Pallet Loss Prevention won an Australian award for the best Home Based Business for Business Services in 2006.
One of the major changes in John’s business occurred when he forged an alliance with Andrew Whittam’s 2ic Software. “Part of the services I offered was to help people manage their pallets and recover lost pallets,” said John. “There was no software available to do this adequately until 2ic Pallets appeared on the scene.” The pallet rental companies in Australia provide software, John noted, but the functionality of the programs is limited.
“My focus on pallets intensified when I was appointed to help a division of Australia’s largest logistics company, Toll Group,” John said. (Editor’s note: Toll Group recently has expressed interest in acquiring Brambles, the parent company of CHEP.) His pallet customers now are a mixture of small, single facility sites to large logistics companies with sites all over Australia.
When he started the business, John saw his target market as being limited to companies in Victoria, Australia’s second most populous state. With 2ic Pallets, however, Pallet Loss Prevention now has the ability to manage pallets all over Australia. For example, John manages a distant site in Queensland that he has never visited. 2ic Software set up the site remotely from its office in Adelaide, South Australia, and Pallet Loss Prevention provides ongoing pallet management.
“We find that there has been an increased interest in outsourcing pallet management, but there are still many companies who prefer to do it in-house,” John said.
“The biggest challenge with pallet management is transport companies,” John observed. “They can be extremely difficult to get under control as the management of pallet dockets (pallet documentation) depends largely on drivers doing the right thing, but often they have not been trained in the basics of pallet control, and pallet dockets go astray.”
John, who holds an MBA in logistics, sees the increased use of mobile computers by truck drivers as one of the biggest opportunities for trucking companies to improve pallet control. “This will require pallet control software to be adapted for mobile computing,” he noted, indicating that is one of the enhancements currently under review by 2ic Software.
Pallet control in Australia is still a long way from where it needs to be. “Every year companies pay compensation for lost pallets, and some delay paying them out of the hope that they can be recovered,” said John. Companies continue to pay daily rental on pallets they are missing, hoping to eventually recover them. Businesses have to pay rental companies about $30 (Australian) per pallet.
John, who also has worked as a truck driver, is working with the Victorian Road Transport Association to develop a voluntary Code of Good Practice for pallets.
For more information on John’s company, visit www.jvsupport.com.au
The Pallet Queen
Like others in pallet control services, a pallet crisis launched a career path for Delores Snyder. At the time she worked for a Canadian transport company that was “in big trouble with pallets.”
“I took the project on,” Delores recalled, “set up a system, and in the course of two years recovered close to 200,000 pallets.” While working for that company she learned a great deal about how pallet systems worked within the grocery and transport industries.
After she left the transport company, Delores got a call from a former colleague who had begun working for another trucking company with pallet problems. “They asked if I could help them. I said, ‘Yes, I can do that.’ I did a marvellous job of recovery and maintenance until they took it back to their own offices.”
From there, Delores decided to start a business that would provide pallet control services. She began by doing a little research and calling on businesses. Her first clients were other transport companies that had trouble controlling pallets.
Her company is called The Pallet Queen. Based in Ontario, she offers pallet control services to transport companies, warehousing and distribution operations and grocery products manufacturers. She helps them control pallets moving across Canada and into the U.S.
Her early work involved going to client offices, performing an audit of their pallet control system, and redesigning it as necessary, training staff and monitoring implementation to help successful transition.
In some cases she was responsible for particularly troublesome customer pallet exchange accounts that had gotten out of hand. “Eventually a few of those clients asked if I could do the maintenance from my office,” Delores said. “Now I do mostly maintenance.” She provides services for data entry and ledger maintenance, reconciliation with trading partners, and arranging return freight.
She picks up new business when companies come to her with problems managing pallets, so her work also may include tracking down and recovering missing pallets. Her business predominantly involves Canadian Pallet Council pallets but also CHEP pallets and returnable containers.
Delores used to have as many as three employees. As she reduced the on-site auditing and training component of her business, she needed fewer employees.
As some major grocery companies have switched to CHEP, Delores noted that it is more difficult to swap imbalances among accounts in order to reduce or eliminate moving empty pallets considerable distances. For example, if a trading partner in Vancouver owed a load of pallets to someone in Toronto, and a Toronto company owed a load of pallets to someone in Vancouver, she could make arrangements to swap the pallets and eliminate cross-country freight charges.
Companies devote little effort and management resources to managing pallets, Delores noted. “In a short time those losses show on the bottom line, and the atom bomb goes off. It still amazes me that management does not think pallets are an important part of their business until there are no pallets left on the floor to put the product on. It happens every time.” Without management support, she noted, attempts to control pallets effectively can be a waste of time.
“By the time I become involved with a new client, it can be a horror story,” Delores said. “Yes, most of the companies I have worked for have been losing money, but once you put controls in place the losses stop, and usually there is a great deal of recovery of those losses.” Businesses let things get out of hand by ignoring the obvious. Without controlling and maintaining the assets, losses can mount.
When not managing pallets for her clients, Delores tinkers on her farm. “I have a couple of horses,” she said. She also helps ‘rescue’ feral cats – catching them, having them neutered and placing them in adoptive homes.
