From the popular press to customer requests, many people are talking about the green revolution. This kind of green includes both environmentally positive decisions and bottom line savings. It can be difficult to separate the hype from reality and discover what it all means for the pallet industry.
Sustainability has become a hot topic since Wal-Mart introduced an initiative last year to improve its environmental performance, including its procurement practices. In the future, consumer goods companies are going to be evaluated based on an environmental scorecard. Their performance will have an impact on their standing with Wal-Mart. It remains to be seen how much of the initiative is PR compared to radical change. But it is clear that dollar signs are as much of a driver behind the program as a desire to positively impact the environment. One of the foremost experts on wood pallets, Dr. Mark White recently discussed these issues with Chaille Brindley, the assistant publisher for the Pallet Enterprise. Dr. White is the former director of the Center for Unit Load Design at Virginia Tech. He is currently professor emeritus at Virginia Tech and operates his own consulting company.
Over the last few years, Dr. White has championed his Big Idea, which hopes to see the convergence of all aspects of the supply chain to reduce waste, cut costs, improve efficiencies and benefit the environment. He envisions the unit load being managed as a unit where the load, package, storage systems, materials handling systems, and people work together on a global scale. Although it is a big dream, Dr. Whites idea is closely tied to the concept of sustainability and environmental protection.
This candid discussion should benefit you as you consider how sustainability could impact your future. It is critical for pallet companies to know how to talk with customers on this increasingly important issue. Dr. Whites comments provide a good framework for both the novice and those already embroiled in these issues.
Pallet Enterprise: I tend to hear a lot of different definitions when it comes to the concept of sustainability. Is there any one definition that is being used for packaging?
White: No. In fact, there are initiatives within ASTM to begin to come up with sustainability definitions for packaging, such as ASTM D-10. When I say that there is no standard definition for sustainability that I am aware of, what I am saying is that in our world of packaging there isnt any set standard. Now this term sustainability applied in other disciplines has some very established definitions. Just to give you an example, in the world of forestry, sustainability is simply a balance between growth and removal. This has been the definition for decades. When the term applies to packaging, that true balance doesnt really exist. It is more a minimal environmental impact of manufacturing. In the world of packaging, a complete balance is probably not a realistic or appropriate application of sustainability.
The standard definitions are a work in progress.
Pallet Enterprise: How long might it take to develop standards for packaging?
White: Consensus standard writing can take at least two years. In the case of international standards, it can take five years or longer. There are ISO standards. The whole 14,000 protocol in ISO addresses sustainable management of resources although it doesnt specifically focus on packaging. Those standards evolved over a fairly long period of time. It is going to take a few years before we come up with standard definitions for packaging.
Clearly, the retail market is moving forward with its own definitions of sustainability.
Pallet Enterprise: The big player in the retail market is Wal-Mart. Are other retailers looking at sustainability as an important issue too?
White: Yes, other retailers seem to be. We hear rumors that Wal-Marts competitors are doing the same things for very good reasons.
Pallet Enterprise: Why have some of the big companies begun to focus on environmental issues?
White: Clearly, the political climate is changing on this issue. Science is now showing rather convincingly that human activity is having an impact on the environment. New and good science on issues, such as global warming, is increasing awareness of human impacts. The political climate is changing as well as the science.
Another impact is the fact that the United States is the dominant consumer. Thus, we may be having a greater impact than other countries in the world. Now all of a sudden we see China and northern Asia starting to have impacts. The United States may have competition in this arena.
The changes are taking place due to science and political change.
Pallet Enterprise: Who has the greenest pallet? When it comes to sustainability, what are some of the different pros and cons of the various materials out there?
White: There are mixed messages when one compares plastic vs. wood. Your viewpoint depends on which side of the fence you are on. Our measure of the impact is this technology called life cycle analysis (LCA). Environmental impacts are categorized into three different groups: the amount of solid waste that is generated, the amount of liquid and gas emission into the environment that are a consequence of manufacture and use, and the amount of energy that is consumed in these processes.
The problem we have when we attempt to make comparisons comes back to the fact that LCA is not standardized well enough in my opinion to determine clear objective answers. The numbers can be interpreted in various ways. For example, one important input into an LCA is the number of uses of a package or pallet. There are no standard number of uses. It depends on the pallet design, the material used to manufacture and how it is used. The inputs into analysis can be somewhat manipulated in various ways. The state of LCAs allows you to get different results depending on the data used and who is doing the analysis.
For example, most LCAs are fairly weak in the area of understanding what is the impact of the use of a renewable resource raw material versus a non-renewable one. In the classic sense, we treat wood and trees as being renewable and we tend to treat petroleum-based or natural gas-based resources for plastic pallets as non-renewable. LCA techniques dont well document what the impact is of the renewability of the resource. The focus is on net carbon emissions. However this is only part of the impact associated the raw material selected. When it comes to solid waste generation, gaseous emissions, energy consumption associated with manufacture and use, LCAs tend to be a little bit better although they can still be manipulated.
What we have is a measuring tool that doesnt allow us to objectively compare raw material renewability. That is why we often see information that says wood pallets are better while other sources claiming that plastics have less of an environmental impact than wood. These reports often quote data from the same LCAs even though they come up with different conclusions.
Even once we fine tune and standardize procedures like LCA, I think the results will vary. It will depend very often on how that pallet is being used as to whether the impact is greater. Other issues like how often the pallet is reused become a factor.
Many tend to say that a wood pallet wont last as long as a plastic pallet. Well quite frankly, that depends on the design of the pallet. We have to be careful. We are not going to get these objective comparisons until we get better procedures. Even then, at the end of the day, it will depend on how the pallet is used as to which product is better.
Pallet Enterprise: How would standardization impact the environmental dialogue? What is already going on as far as standardization? What is already in place?
White: Standardization can indeed result in more sustainable packaging. With standardization, we often get more reuse.
Reuse is good. For example, in the U.S. market, if more people are using the 48×40 size, we then increase the after-market value of that pallet. That leads to more reuse because the value is higher.
We want to make our supply chains more efficient. The more we standardize our transportation, storage and packaging systems together, we get greater efficiency in shipping that leads to a reduction in energy consumption. We get greater efficiencies in materials handling. We avoid costly processes of re-palletizing loads from overseas. Standardization is good for the environment. This includes the packaging, the materials handling system, sea container, etc.
Pallet Enterprise: Beyond LCAs, what are other things that need to be considered?
White: You can look at Wal-Marts sustainable packaging matrices to see other sustainability considerations besides life cycle analysis. This includes gas emissions, material value, product packaging ratios, cube utilization, recycled content, and renewable energy to manufacture the product.
Pallet Enterprise: How do you see the Wal-Mart packaging initiative impact the pallet and transport packaging sector?
White: One way to answer that is to look at Wal-Marts current scorecard. As of 2008, Wal-Mart intends to use the result of an environmental scoring as part of their purchasing practices. To the extent that Wal-Mart does this, we have to look at its scorecard and see where pallets fall.
Its probably not going to be the pallet supplier that is going to be scoring the pallet. It is going to be their customer or the supplier to Wal-Mart. In the scorecard you have seven choices for a shipping platform; floor loaded, limited use pallet (one-way, odd size), plastic ledge, plastic pallet, slip sheet, wood pallet (GMA-48X40 pooled/reusable) and finally an other category. The customer merely has to check one of those categories. Once they do that there is a database built into the scorecard that gives it a score. The data is based on LCA data that comes out of the European initiatives.
Wal-Marts initiative is not going to have a huge impact at this point because the pallet customer is going to merely make one of just seven selections. That is fundamentally what they do. I think it is more the implication down the line that will have an impact.
In one respect, you have to keep procedures simple to make them applicable. But when you begin to simplify these procedures, loose accuracy. You overlook details. For example, not all wood reusable pallets are the same. The number of reuses varies depending on the original design. The Wal-Mart scorecard is not that sensitive to these differences. In the future, I think it could lead to considering those types of things.
Down the line there are going to be some impacts of Wal-Marts initiative. Not only is this sustainability initiative good for the environment, it is also profitable. Because of that I think it is here to stay.
Pallet Enterprise: What can the pallet industry due to prepare for more stringent sustainable requirements?
White: I believe the interest in monitoring environmental impacts of packaging is here to stay and is going to grow. If you think about what the pallet industry can do to be proactive, it can prepare by documenting the environmental impacts. A lot of that data is already out there. It can be collected and documented. What are the levels of reuse? What is the recycled content of the raw material in pallets? What are the recovery values of the pallet? What are your travel distances to customers because that leads to energy consumption? The above research could be done on an industry wide basis or company by company.
Renewable energy is used in the manufacturing of wood pallets. A lot of wood pallet companies use the byproduct of manufacturing for generating heat. Thats a very positive impact on one hand. On the other hand, it puts carbon back into the atmosphere. So there is a give and take there. The industry can start quantifying these things. They can then share this information with their customers.
The industry should start collecting this type of information now. Individual pallet companies should begin to start having this kind of information available for their customers. That would help both wood and plastic pallet companies position themselves on these issues.
Pallet Enterprise: Pallet companies might think that they dont have the capacity or know-how to do this sort of analysis. How would you respond?
White: This is the classic role of a trade association. When you have small, family-owned businesses that dont have the resources to quantify these things that is one of the purposes of membership in associations. These organizations could help collect this kind of data on an industry wide basis. Of course, the role of universities, such as Virginia Tech, can be to assist in collecting and analyzing that data. The point is that resources are out there.
Pallet Enterprise: What dont most pallet companies know about the sustainability issue?
White: Thats a great question. Pallet companies need to be reminded that profit is not the enemy of the environment. That is a misperception of many people in society. Many initiatives that the wood pallet industry is already involved in to maintain their competitiveness in their market reduce the environmental impact of their products. The classic example is that raw material is the largest cost component of manufacturing a wood pallet. If I am going to be competitive, I have to focus on my raw material cost. One way the industry does this is to increase pallet part yields from logs and cants. At the very same time they are increasing yield, they are reducing solid waste production and getting more usable product into the pallet. All of this leads to reduced environmental impact while being profitable at the same time.
Profit and environmental sustainability go hand-in-hand, and the industry should promote its practices. For example, pallet designs are becoming more efficient. The Pallet Design System (PDS) is a way that they can do that. Today, U.S. pallets are moving more product on less raw material, which is profitable for the pallet user as well.
Pallet Enterprise: A recent ad in a materials handling trade magazine featured plastic pallets. It claimed that by eliminating 11 pallets, you save a tree; eliminate 400 and you save an acre. The ad also talked about pallets and landfills. Is there any good data on this topic about how many pallets from various raw material types actually go into landfills?
White: The last survey on wood pallets in landfills was completed in 1999. Obviously, that data is very old. At that time, it showed that there were pallets ending up in landfills as well as large numbers of pallets being repaired and recycled. Other pallets were shredded up to produce mulch and byproducts.
EPA data still reflects that packaging is about 34% of municipal solid waste mass. I dont know how that is broken down according to material. There is a new study being conducted by the USDA Forest Service in cooperation with Virginia Tech and the Pallet Foundation that will document how many wood pallets are currently being repaired and recycled.
That particular advertisement lacks detail. Most of the raw material used for pallets is obviously a byproduct of harvesting trees for other products. The lumber industry harvests trees primarily for residential construction, high grade lumber for export, and domestic cabinet and furniture industry. The pallet industry uses the byproduct of this. It is hard to justify cutting a tree down to make a pallet. Some pallet manufactures do have small log sawing operations. In those cases, they are using small, poor quality trees that can result in good forest management and timber stand improvement. Advertisements like that can be a bit misleading.
I have to give the wood pallet industry credit. It is incredible how the wood pallet industry has been able to repair and reuse wood pallets profitably. We are unique in the world in North America in how we do this. I believe the new data will show that there has been a significant growth in repair and reuse of wood pallets. I believe the new data will show that there are less and less wood pallets ending up in landfills. Well see soon when the data comes out and is public.
Pallet Enterprise: Can you provide any insight into how many plastic, corrugated, metal pallets get recycled or reused?
White: I think it is comparing apples with oranges. Plastic pallets tend to be used in captive environments where reuse can be quite significant. In the case of paper pallets, the management is very different. After a single use these pallets primarily goe into the corrugated waste stream and get bailed up along with corrugated boxes and containers. There is a really good infrastructure for recycling both wood and corrugated pallets.
Recycled content for plastic pallets impacts the manufacturing process. Thermoforming can tolerate a certain amount of recycled content because as you add recycled material, you increase the variability of its properties. That has an impact on the manufacturing process and quality of the pallet. The same can be said of injection molding as well. Some processes need more uniform raw material than others.
Extrusion, for example, can tolerate more recycled resins than thermoforming. Having said that, I know of plastic pallet manufacturers that are using a very high percentage of re-ground post consumer resin into their molding processes. The technology of the plastics industry is improving. Resin prices have risen significantly. In the past, virgin resins were much cheaper than re-ground recycled material. That is not true now.
Pallet Enterprise: Many times in the past companies have given lip service to quality and total systematic cost although the initial purchase price was the major deciding factor. Do you believe this is ever going to change? Is the environmental discussion going to have an impact because you are really talking about the same thing the life cycle of packaging?
White: Price is going to dominate for the foreseeable future, certainly in the United States. One of the major reasons is that this is a large country with large and protracted supply chains. Management can be difficult. In terms of export, price is going to remain a major factor.
In the United States, the pallet industry does an incredible job of making low cost pallets. In other words, the industry generally makes a pallet that is strong enough to support the load through a determined number of cycles and when it gets to the other end of the supply chain we have pallet recyclers that can pick up that pallet, repair it and put it back out into the market. We are essentially reusing limited use wood pallets. We are doing it effectively.
From an environmental impact point of view, the practice makes sense. So long as the purchasing agents emphasize price in this country and we have an pallet recycling industry the process is profitable and very environmentally friendly, I dont see that changing much in the United States. We are unique in how we do this. The open pool in Europe is a substantial pallet. Asia has pools that are built around substantial pallet too. Of course, their supply chains are very short.
When I go around the world and describe how we do it in the United States, everyone scratches their head. I see the U.S. approach growing. I see the United Kingdom starting to model some of what we do in terms of pallet manufacture and recycling. We meet the price objective of the purchasing agent and at the same time reduce the environmental impact.
Pallet Enterprise: One concern is the safety of repaired pallets. Didnt your research show that repaired pallets done correctly can hold just as much weight in many cases as a new pallet?
White: Yes! Our studies show that there are three broad categories of recycled so-called GMA pallets used in this country. When you look at the upper grades, they are certainly able to carry the very same load levels as the new pallet. That gradually decreases as you go down in grade. Even the lower grades used in the right material handling supply chain were certainly safe to use.
