Many in the industry recall the destructive fire that ravaged a pallet yard in Chicago last April, and most pallet company leaders recognize that fire is a leading risk to pallet manufacturers, recyclers and related sawmills. Pallet fires like these often make the news with details of the damage left behind. What the media do not mention about pallet fires is whether certain safety measures could have prevented the fire or if the business had a disaster recovery plan. Those aspects of the story are lost on the public, but not to the owner of the pallet company.
Headlines aside, risk management is critical to mitigate fire and other serious safety threats. Some of the most common hazards for the industry include: unsafe forklift operation, pallet storage, dust, poor housekeeping and supply chain issues. The following best practices can help business owners avoid costly incidents and business interruptions while improving overall workplace safety.
Common Risks and Risk Mitigation
Forklifts
Threats posed by forklifts come in two categories: maintenance and training. To ensure proper operation and reduce the risk of mechanical failure, forklifts must undergo regular maintenance. This includes: a schedule of routine maintenance and holding employees accountable for keeping to that schedule. Additionally, each forklift should undergo a routine maintenance check before each shift. This includes a basic visual inspection for any obvious concerns, ensuring all fluids are at their appropriate levels and checking for normal operation of the forklift itself: brakes, steering, tire pressure, etc.
Training is also paramount. Errant forklift operators pose a significant threat to pallet companies. Understanding the proper loading and use of a forklift is just part of that training. Forklift operators must be trained to understand the safety practices and procedures of the organization. This includes educating them on appropriate speeds, maintaining clear sight lines at all times, adhering to floor markings and designated forklift operation areas. They must also be encouraged to note any safety concerns they see that might impact their ability to safely operate their equipment, and this includes proper pallet storage. Further, proper supervision of forklift operators is key. Catching mistakes as they happen or flagging operators who do not adhere to the company’s safety protocols can mean the difference between a normal workday or a terrible loss or accident involving life and safety.
Pallets
For clients to be insured by Pennsylvania Lumbermens Mutual Insurance Company (PLM), they must ensure pallets stored outdoors are at least 50 feet from a building. Stacks should be limited to about 30 units in height or about 16 feet. PLM also advises clients to keep between 15 and 25 feet between each pallet array to create a defensible area for firefighters if necessary.
When pallets are stored inside a building, the general rule of thumb is pallets should not be stacked more than twice the height of what would fit inside of a truck for transport or not exceed 12 feet in stack height. If in doubt, make sure your stack has at minimum at least 4 feet below the top of the stack and the rafters of the facility itself. This will help ensure, should the worst occur, the indoor fire suppression system can do its job. Proper clearance also limits sprinkler damage when pallet stacks are moved.
Dust
Sawdust is one of the most common and substantial safety hazards because it can inhabit any vertical or horizontal surface as part of the cutting, assembly or pallet rebuilding operations.
Fortunately, many operators have taken note of this and have even begun addressing dust at the facility design stage. These operators have incorporated conveyors below the floor in these facilities to more easily remove the dust directly from the source. And because the equipment is elevated, in some cases by five or six feet above the conveyor, that equipment can be more easily cleaned and maintained. This reduces the risk of dust build up, and as such, the potential for dust-related fires. Dealing with dust at the source is one of the best ways to ease clean-up and ensure safety.
For those facilities without these newer conveyor systems, a routine dust management system must be put in place. This includes opening electrical panels to carefully remove dust as well as resealing them to ensure dust cannot gain access to such panels in the future. A daily as well as weekly schedule of dust clean up on all vertical and horizontal surfaces should be carefully followed. In addition, I recommend a quarterly dust inspection by supervisors to ensure these schedules and procedures are being maintained.
Housekeeping
Dust is just one aspect of a pallet operation’s housekeeping program. That program should also include a routine equipment and machinery maintenance schedule, along with proper training and accountability for employees tasked with performing maintenance.
I am seeing pallet operators use thermography, either by outside consultants or their insurance companies, to identify electrical heat issues. This includes within the panel of machinery motors or in the wiring to identify a thermal issue before it becomes a fire. Any operator that isn’t using thermography already should institute this type of scan as soon as possible. In addition to reducing the risk of fire, thermography will also help supervisors determine where employees are closely adhering to their housekeeping program by revealing dust build up within equipment and electrical panels.
Supply Chain
Repair and replacement costs for both facilities as well as parts and equipment continue to rise, in large part due to continued supply chain issues. Because of this, pallet operators simply cannot afford a loss – whether that loss involves a part, a critical piece of equipment or their physical plant.
I know of one pallet operator who uses some custom equipment who has been waiting on parts for several months and has been unable to produce custom materials for a customer as a result.
This is why regular maintenance of all equipment is critical to avoid emergency situations or provide warning far enough in advance to plan. Additionally, pallet companies should conduct an annual audit of their facility with their insurance agent to make certain their policies are tailored to their current operations and appropriately address replacement costs. There can be no greater loss for a business to suffer than the loss of its entire operation, only to learn after that it is underinsured and will not have the funds necessary to rebuild and get back to business.
Disaster
Not every disaster can be avoided. This is why a disaster recovery plan is essential for all pallet operators. Far too few pallet companies have formal or even informal disaster recovery plans. Companies that do can often survive a disaster. Companies that don’t usually go out of business if the worst occurs.
These plans should include agreements with other facilities — including, in some cases, competitors — that will allow operators who suffer a loss of their physical plant to continue producing materials to meet customer needs and orders. Done correctly, these arrangements can be seamless for clients, and allow operators to continue earning as they work to rebuild their facilities following a disaster.
Pallet operators can mitigate many of the biggest risks to their operations through basic best business practices and proper maintenance. Should the worst occur, having a disaster recovery plan to promote continuity of business operations can make all the difference.
Owners of pallet businesses face a number of risks, but they can reduce that risk by getting educated on the threats that face their business and by taking action to mitigate it.
Editor’s Note: Serving clients for over 125 years, Pennsylvania Lumbermens Mutual Insurance Company (PLM) is the oldest and largest mutual insurance company dedicated to the wood products and building materials industries. For more information on this valuable supplier, visit https://www.plmins.com/.
