Every year it seems like the packaging industry’s Pack Expo Show gets more crowded and congested, and this year’s version was like an indoor version of rush hour at Times Square. The Chicago event, which takes place on even years, is larger than the Las Vegas show (odd years) but both continue to grow. Intuitively, that trend should be good news for the pallet providers required to help move those packages through the supply chain. Here are some news and reflections from the show floor:
Packaging Machinery Shipment Growth
Investment in new packaging equipment continues to grow. The value of domestic shipments of packaging machinery is projected to grow at a compound annual growth rate (CAGR) of 2.4% reaching $8.5 billion in 2020, according to PMMI, The Association for Packaging and Processing Technologies, and owner of the PACK EXPO show. More than half of this growth is expected to come from the food and beverage sector. Exports of packaging machinery in 2015 increased by 3.2% compared to 2014 and are now $1.1 billion.
So Where Were the Blue Pallets?
Sure, there were blue pallets to be seen in conjunction with palletizer company displays or other company booths, but at the CHEP booth, there was just a single pallet, and at that, only a half pallet. According to Kevin Norris, a senior CHEP marketing manager, while pallets are obviously still CHEP’s core business, it held back on the pallets to draw attention to its Solutions Portfolio offering.
Ben Eugrin, director of Supply Chain Solutions, and Mohammad Ansari, senior manager of product development, shared some customer engagements that have delivered more than $1 million in savings and significant return on investment for CHEP customers.
In one case, a beverage manufacturer cashed in to the tune of $500,000 by optimizing new bottles, corrugate weight and adjusted stretch wrap thickness – a return on the company’s investment of 400%. In another consultation, CHEP determined that a tissue manufacturer could safely switch to recycled corrugate for its secondary packaging, delivering a $320,000 annual cost reduction. Finally, CHEP worked with a private label manufacturer to confirm that it could successfully eliminate the use of slip sheets from its unit loads, delivering a $200,000 saving.
Lighter, Stronger Products
Plastic pallet manufacturers continue to strive for the same or better performance from less material, and as a result to keep pricing as competitive as possible. Case in point, plastic pallet manufacturer PTM has launched a new high performance plastic pallet it calls the Fusion Pallet. At less than 50 lbs. and reinforced with aluminum, it is lighter than its Ultra Pallet (which sells for around $55 depending upon volume, etc.) The new product will be priced in a similar range. Monterrey, Mexico-based PTM continues to expand its product line.
The Best Pallet Footprint for International Trade Is….
As international trade has grown over the years, likewise has the discussion around what footprint best optimizes such supply chains. The answer depends of course upon what parts of the supply chain are included in the optimization exercise. When the scope of the project includes the material handling systems of the receiver, then the scale can tip in favor of the pallet size favored by the customer.
Even from a purely transportation perspective, there are still variables involved, such as which transportation modes are to be optimized. When it comes to conventional 40-foot containers, the best option may be the 1140×980 mm pallet, which the automotive industry has adopted (AIAG RC-12 Intercontinental Pallet). It generates less than 3.5% wasted space in a 40-foot container. Specialized wide body containers can also offer very good utilization for other pallet sizes.
At this year’s PACK EXPO show in Chicago, SSI Schafer, a material handling equipment and reusable container provider, announced that after considerable research and investment, it has launched its new GlobalStac reusable plastic bulk bin with what it believes to be the optimal footprint. It measures 1195×990 mm, which provides a leading 95% utilization in both a standard 40-foot container as well as in a 53-foot trailer, providing the best option for both land and sea. Will this size also make sense for pallets? It will be interesting to see how the market responds.
RM2 Emphasizes Technology
Composite pallet provider RM2 again had a strong presence in PACK EXPO’s Reusable Packaging Pavilion. It emphasized its new technology, which it calls ELIoT (Electronic Link to the Internet of Things). It is imbedding sensor technology in its pallets, and is participating in a new Internet of Things trial. AT&T is working with a variety of companies, including RM2, to showcase its new LTE-M technology.
AT&T has launched North America’s first LTE-M enabled commercial site in the San Francisco market to support the pilot of AT&T’s LTE-M Low-Power Wide-Area network by the end of November. AT&T plans to make the technology available across its commercial network throughout 2017. In terms of pallet manufacturing, RM2 shuttered its Ontario plant last spring, and expects to begin production at its new Chinese and Mexican joint ventures in the first quarter of 2017. It also announced that it had concluded a pallet sale to Pactiv, a leading packaging manufacturer, to replace non-wood pallets in its system.
iGPS “Slightly Ahead of Schedule”
iGPS CEO Jeff Liebesman again invited me to sit down at their PACK EXPO booth, and reported that their operation is slightly ahead of schedule in terms of its business objectives, and that it remains profitable. The company is purchasing new plastic pallets, and is installing material handling automation and washing equipment into its depot network. Watch for a more detailed report in the near future.
The Future of Unit Load Design
Many companies had experts speak on pallets and reusable packaging. The industry continues to evolve although there were no game changing innovations unveiled this year. Companies are starting to see the importance of transport packaging in the supply chain. Now, it is up to the industry to continue to demonstrate why not all packaging or designs are created equal.
