If the trucking industry had its own definition for dealing with the white pallet exchange requirements of its customers, it would be something like, pallet exchange: giant hassle that must be endured to win freight contracts. Unfortunately, that is how many truck drivers and transport companies view the process of traditional pallet exchange. Since pallet exchange often is required by customers, however, several carriers are turning to Pallet Clearinghouse to provide a manageable alternative. Pallet Clearinghouse utilizes a network of over 160 depots across the country that are operated by independent pallet recyclers. At these conveniently located depots, customers may buy or sell 48×40 pallets as needed at predetermined prices. The Pallet Clearinghouse program, launched in 1998 by First Alliance Logistics Management, targets carriers that provide pallet exchange services. The program benefits carriers by reducing operating costs; the network of Pallet Clearinghouse depots can reduce off-route miles and hours that are driven and spent in order to buy or sell pallets. The program also allows carriers to reduce administration and cash or Comchek transactions. Another benefit is that reducing hassles for drivers improves morale. Carriers often cringe at requests to provide services related to pallets, but they remain a fact of life in the trucking industry. “Ideally the carriers would like to eliminate exchange altogether like pallet rental companies have,” explained Glenn Merritt, managing partner of First Alliance. “But if you have to live in that environment at least on a partial basis, we are providing a network where carriers can come in and buy pallets if they need them prior to a pick-up or sell pallets after they make a delivery to try to net their round-trip costs per pallet as favorably as they can.” D&D Transportation Services Inc., an Idaho-based trucking company, has been using the Pallet Clearinghouse program. “Pallet Clearinghouse really saves us a lot of time,” said Jeannie Denning, a billing clerk for D&D, and it supports the trucking company’s goal of providing dependable, reliable customer service. “All we have to do is to compare their receipts with the invoices, and that’s it. It is convenient, and it’s also less expensive because most of the time you can get pallets at less cost than you can from another company. They also pay better when you are trying to unload empty pallets.” The Pallet Clearinghouse is revamping its price structure to both carriers and pallet recyclers for the first time in a couple of years, according to Glenn. “Our prices reflect what is going on in the regions where we do business,” he said. “We try to stay current.” He is hopeful that changes will generate more business for the company. First Alliance Logistics was formed by several leading pallet companies in 1996 in order to develop custom pallet retrieval and recovery programs. The company launched the Pallet Clearinghouse about two years later. Glenn, previously director of logistics operations for another company, joined First Alliance in 1996 as vice president of operations. “We shop Pallet Clearinghouse as a partial solution to pallet exchange,” Glenn said. The program provides a valuable service to carriers, he said, but it is not a complete solution because drivers still must go to a Pallet Clearinghouse depot to buy or sell pallets. The program provides benefits to pallet recyclers, too, Glenn noted. “The nice thing we offer to the recyclers is that we take over the credit woes that they used to have individually with a lot of these carriers,” he said. Carriers are billed directly by Pallet Clearinghouse for pallets they buy from depots, and the company pays recyclers on a weekly basis. Crown Pallet, a pallet recycling company in Long Beach, Calif., has participated in the Pallet Clearinghouse depot system since 1998. “We are really happy with the relationship,” said Michelle Miller, office manager for Crown Pallet. “Prices are fair on both sides.” The Pallet Clearinghouse system is easy and convenient compared to other forms of compensation, such as Comchek, she added. Carriers and truck drivers benefit from the program’s pre-arranged credit arrangements because drivers do not need to issue Comchek or have cash or otherwise pay for pallets. “All the credit work is done up front and set up with the home office,” Glenn said. Reducing hassles for drivers improves morale, which is an important benefit, Glenn noted. The benefit is significant because there is a lot of driver turn-over in the trucking industry, and making their job more hassle-free helps carriers to retain drivers, he added. Another benefit for D&D Transportation is that the Pallet Clearinghouse depot system is nationwide. “They are all over,” noted Jeannie. “It does save a lot of time. Our drivers call in to let us know that they don’t have pallets, or they have pallets and they need to get rid o them, and we let them know the location of the next Pallet Clearinghouse depot.” Maintaining a network of depots at locations that enables carrier customers to get the service they need is an ongoing effort, Glenn indicated. “We have tried to strategically locate these facilities as best we can,” he said, “but there is always somebody who has a customer out there whom we can’t service. That just means we have our work cut out for us to find someone to help them out.” Regular communication between Pallet Clearinghouse and its carrier customers is essential. “I often work with Angela (Fiala) at Pallet Clearinghouse, and she has more than helped me in many ways,” Jeannie said. “If I don’t have a copy of a receipt, she will fax it to me right away so I can verify whether or not it is one of our drivers. She is excellent to work with.” Angela oversees the administration of the program and recruits pallet recyclers while Jarrett Carroll is in charge of customer recruitment and service. Communication with recyclers and customers is critical for both functions. “First Alliance is very much into building relationships,” Glenn said. “We need to communicate more and more all the time with people. That’s how you look out for one another and for mutual business opportunities.” Pallet Clearinghouse depots also participate in retrieval programs for non-48×40 pallets. “As a matter of fact,” Glenn remarked, “the way we found some of our recovery agents was doing business with them through the Clearinghouse. That’s how we got to know them. You get a feel for what kind of business people they are.” The vagaries of the GMA pallet specification have not been an issue. Pallet Clearinghouse provides written specifications for depots, and the recyclers have been able to keep truckers readily supplied. “We have had very, very few people complain about the quality of the pallets,” Glenn said. “The reason I can tell you this is because if there were any issues with the pallets, the shippers they would be coming right back to get another set. We are not seeing those issues.” “Don’t forget,” Glenn added. “They are just buying 18 or 22 at a time. That’s just two short stacks, so they can look them over pretty good. I think it is fairly easy to scrutinize them when you are buying in small quantities.” Most trucking companies would prefer not to get involved in pallet management. “In my honest opinion,” Jeannie said, “pallets are something that should be maintained between the shipper and the receiver, and the carrier shouldn’t have anything to do with it.” But the fact that carriers are required by their customers to get involved creates an opportunity for companies like First Alliance and its Pallet Clearinghouse program. It provides services to make pallet exchange convenient and efficient for them as well as providing business and cores for recyclers that serve as the Pallet Clearinghouse depots. “Everything we do is constantly customizing and updating programs to make sure we are adding value for our customers,” Glenn said. With a new price structure soon to be in place and by providing strong service, he looks forward to increasing business with current customers and winning over new ones as well.
