How Pallets Factor into Your Overall Costs

We all want to spend less. For warehousing professionals, determining where and how to save starts with accurate tracking of costs. Pallets factor into it, but it’s not only the price of the pallet itself; there are other costs to consider. We’ll break it down for you.

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Tracking costs helps you identify potential areas for savings. And since the pallet is a small item in the supply chain, it may be tempting to start there. But switching to a lower-cost pallet, for example, may end up costing more in the long run.

The true cost of pallet management is dependent on a variety of factors including:

  1. Type. The price of a pallet goes up or down based on its construction. New pallets are most expensive followed by combo and then reconditioned. Pricing further varies by grade which is determined by the number/type of repairs performed on the pallet (fewer repairs equate to a higher grade and a more expensive pallet).
  2. Quality. Regardless of pallet type, not all are built the same. It is important to know and trust your supplier. Poor quality pallets may cause jams or faults in automated systems, leading to time-consuming maintenance and downtime. They can also cause product damage or even safety incidents.
  3. Quantity. Just as buying in bulk saves money, placing a large order versus a small order will save money too.
  4. Unit load/Freight. The smaller they are, the more units can be packed into one load. More pallets on one load equates to a lower transportation cost per pallet. A full trailer is always more economical than less-than-truckload shipping methods.
  5. Lead time. The longer lead time you provide, the less you will pay in freight because your supplier can use standard transit services.
  6. Storage. If you store pallets in your warehouse, you are taking up valuable space. The cost per square foot taken up by unused pallets can quickly add up.
  7. Sorting and Loading. Consider your resources for this one. Does it make sense to use an internal team to sort and load pallets or will it pay to outsource this?
  8. Returns. Pallets are valuable, no matter the condition. If you’re not taking advantage of recycling or buy-back options from your supplier, you are missing out on savings.

Rose Pallet would like to help you optimize costs; contact our pallet specialists today to find out how you can save.

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