February 1st, 2009

By: Elizabeth Grey Morrison
Date Posted: 11/1/2008

If your company has not been asked whether or not your products are "green," it may be coming. Increasingly, packaging users want suppliers to reflect an eco-consciousness even though they may not want to pay extra for it. Smart companies are developing answers before customers ask questions.

The problem is that it can be hard to separate truth from spin when it comes to environmental claims about pallets. Both wood and plastic advocates tout green advantages. One thing is for certain - there are no easy answers because transport scenarios vary widely depending on multiple factors.

Fortunately, the desires to effectively run a business and be environmentally friendly are not mutually exclusive, as many practices actually help to simultaneously achieve both ends. This article will examine the basic advantages and disadvantages of both wood and plastic pallets. The goal is to provide a framework for comparison between the two materials considering efficiency, the environmental impact of the materials used, the amount of energy consumed, the waste generated, the products' durability and their various costs.

While looking at these dynamics, Dr. Peter Mooney, founder and president of Plastics Custom Research Services, said it is important to note that comparing wood and plastic pallets is, in a sense, like comparing apples and oranges given the many different types of plastic pallets.

"It's very hard to argue what are the differences between plastic and wood pallets because there are so many types of pallets," Mooney said.

In terms of available data, discrepancies also exist between wood and plastic pallets. While a good deal is known about wood pallets in terms of environmental impact, Derek Hannum, director of marketing for CHEP USA, said that there is less information available about plastic pallets.

Despite variations, however, Mooney said there are still general advantages and disadvantages of the two types, but the single most important factor is whether or not the pallets can be reused.

Like Mooney, John Clarke, director of technical sales for Nelson Company which markets both wood and plastic pallets, said the way to use the least energy and be the most environmentally friendly is to reuse the same pallet, wood or plastic, in its original form.

"I think you have to evaluate the application rather than just whether [the product] is good or bad," Clarke said. This requires a thorough analysis of the process used to obtain the raw material, the manufacturing process, the effects of using the pallet, and the environmental implications at the end of the product life cycle. These factors can vary depending on the amount of virgin material utilized, the number of trips for each pallet, the fuel used to ship or retrieve the pallet, etc.

Reusable packaging may not always be ideal for every supply chain situation. One-way packaging exists for a reason. Shingle pallets are a perfect example of an application where pallets are made for one-time use. In many cases, those pallets are sent to new housing developments. This is not a typical closed loop situation. Unlike retail, where there are repeat patterns and processes, this is a one-time shot. A pooled pallet would make no sense. Who would send a truck to get one or two pallets? Is it more environmentally friendly to retrieve every pallet? What about the gas involved to do so? Or is better to only retrieve the pallets that are in closed loops and are easy to get?

Another factor to be considered is which product's materials are the least harmful to the environment. To that end, Mooney said the classic answer is that wood is replaceable since lumber, a renewable resource, is used in the construction of wood pallets. Petroleum, on the other hand, is a non-renewable resource that is used to create plastic pallets.

"The thing that people forget about wood is it's 100% recyclable," Hannum said.  "It's also biodegradable. Plastic isn't."

Wood pallets may be one of the most recycled products on the planet. Many recyclers buy little virgin material. They get the most they can out of each board and then turn every non-usable board into some type of byproduct.

Plastic pallet advocates point to the advances in recycling plastics and use of recycled resins to reduce the amount of virgin material used in some designs. iGPS, the leading plastic pool operator in the United States, claims it recycles all of its damaged pallets to produce new ones.

Gary Garkowski, vice president of marketing for iGPS, said that nearly 40% of all hardwood harvested in the United States is used for limited-use pallets. He also suggested that deforestation is a significant contributor to carbon dioxide gas emissions. iGPS has recently launched a tree planting program with the National Forest Foundation. These trees will help absorb carbon and will revitalize the landscape providing for critical wildlife habitat.

The forest products industry maintains that timber harvests are a necessary part of preserving forest health and contributing to carbon sequestration and wildlife habitat diversity. While it is true that 40% of all hardwood is used for pallets, classifying these pallets as "limited-use" is somewhat misleading. Many wooden pallets are designed for multiple trips and are rebuilt as necessary to provide for a maximum use of resources. It seems for every argument that one side brings up, the other counters with a strong rebuttal.

Judd Michael, associate professor of sustainable wood-based enterprises at Penn State University, said that only a small percentage of trees get cut down solely for the purpose of making pallets. He contends that wood pallets are an effective way to ensure complete utilization of harvest material that would otherwise go to waste. Although it is true that most trees are not cut down to make pallet lumber, increasingly the use of scragg mills to process low grade material has increased the amount of trees that are harvested for this purpose. Again though, this is not old growth trees that have become the major concern for environmentalists.

Overall, Michael said, "The sustainability of wood versus plastic comes out in favor of wood if you take some basic assumptions into account about carbon sequestration rates and the negative impact of using a non-renewal resource."

The type and source of material can make a big difference when calculating the environmental impacts. For example, tropical wood shipped over long distances may require greater energy to use than wood procured locally. Recycled material reduces the ecological impact as long as the energy used to process does not cancel out the benefit of reducing virgin material.

When judging the energy footprint of a plastic pallet, most calculate the amount of petroleum that goes into shaping the material itself. What is not as often considered, Mooney said, is the amount of energy it requires to actually power the process. At each level of production-from extracting oil and natural gas to converting the raw materials into plastic to shaping it into pallets-energy is consumed.

"Wood would be arguably less energy intensive in terms of turning that material into a pallet," Mooney said.

Even though the production of wood pallets requires less fuel, it is important to keep in mind that the process typically still requires energy consumption. And, as Nelson Company's Director of Marketing and Sales Mike Cunneen pointed out, recycling both wood and plastic pallets requires energy. While wood does decompose on its own, such pallets are still bulky and cannot just be dumped into recycling bins. Rather, wood pallets must often still go through fuel-powered grinders in order to be recycled.

Michael of Penn State said that his research could not conclusively determine whether wood or plastic ultimately require more energy to produce and use.

Plastic pallets also save energy in one important way: gas. With fuel prices shooting through the roof, plastic pallets are generally lighter than wood ensuring more bang for the buck when transporting goods. Nestable designs can also reduce transportation costs. Many plastic or composite grocery pallets are made with a nestable design. CHEP pallets tend to be some of the heaviest pallets on the market; they also have a taller design than most white wood pallets, which means you can get fewer on an empty trailer.

"The plastic pallet is about a third less in weight, which lowers the amount of fuel consumed to transport," said Gary Garkowski, vice president of marketing for iGPS.

Waste is another factor to be considered. Don Remmey, a Pennsylvania pallet manufacturer, said wood has an advantage over plastic in that little waste is generated in its production. Nearly all of the lumber is used, with the highest grade being reserved for furniture, the second highest reserved for flooring and fencing, and the third and lowest grade reserved for the creation of pallets.

Even in production, Remmey said manufacturers use the wood waste for other materials. Bark, for example, is used in mulch, while the side slabs of wood are chipped and sent to paper mills. Wood waste from pallet manufacturers is also put to use, going through grinders to become mulch or animal

"It's totally recyclable," Remmey said. "We like to think that we are responsible from cradle to grave."

In terms of durability, both Mooney and Cunneen said that plastic has an edge over wood since it is not as prone to splintering or decomposition. As an added plus, Mooney said the majority of commercial resins today are thermo plastic materials, which can be heated and cooled in various sequences without losing its strength. This can be a real eco-advantage for plastic in terms of longevity.

"I think the key would be you can get more turns out of a plastic pallet," Cunneen said. "Its value is going to be retained."

Last but certainly not least, cost is another factor that weighs heavily on the minds of manufacturers and consumers. Remmey said a wood pallet generally costs about $8, while a plastic pallet costs approximately $40.

Pallets costs can be all over the board. Some plastic pallets can be in the ballpark of wood although those are generally lower-strength tolerance designs for limited use. "Overall, there is no question that a new wooden pallet will, 95% of the time, cost you less than a plastic pallet," Mooney said.

However, since plastic pallets are not as prone to splintering as wood pallets, Garkowski said the product eliminates the need for special repair trips, which can also save money on fuel and repairs.

"That's why our pallet can exist [at a higher price]; we've eliminated all those extra miles, and we've put those savings into the value of the platform itself," said Garkowski.

Jennifer Daniels, marketing director for PalletOne, said that cost is such a significant factor in choosing pallets that it usually outweighs environmental concerns.

"While the intention of sustainable practices is to reduce environmental impact, it must also be economically viable," Daniels said. "Our customers have communicated that they're not ready to pay more for a pallet solely to reduce environmental impact. Of course, if it saves them money, then that's another story."

As a result, Daniels said the focus at PalletOne has been on making production facilities more efficient, using less energy and fewer raw materials in the pallets themselves. This has two benefits: less wood in a pallet is good for the environment and reduces cost.

"The more raw material you put into a pallet, the higher the price is going to be," Daniels said. "At the end of the day, we're still trying to sell a product with as little raw material as possible to do the job well."

The biggest problem with the "who's greener debate" is that everyone claims to be the champ. There are very few standards that can be used to effectively level the playing field and consider all the variables needed to make an accurate, fair assessment.

Michael of Penn State said, "The trick is how many trips does a pallet take in its life time and how many pallets go to landfills." He claimed that many of the estimates out there overstate the number of white wood pallets going to landfills and underestimates the number of trips that most white wood pallets make. Obviously, if you claim the average wood pallet makes only 1-2 trips while a pooled rental pallet makes 20 or more, the math will work out in favor of a rental pallet. These calculations may not take into account the fuel used to recover stray rental pallets or other key variables. How do you know how your company is doing? It requires a thorough assessment of your entire supply chain. Most wood pallet companies cannot afford this testing. However, you can put together basic information about the environmental benefits of your products. Michael of Penn State said that a group of enterprising wood pallet companies could work together to develop a white wood life cycle analysis. Maybe this is something that a trade association or other group could further develop.

Hannum said that CHEP has recently launched a Web site, which enables companies to check their environmental footprint based on three areas: solid waste, energy consumption and green house gas emissions.

"You can essentially do your own input and check your results based on the number of pallet loads shipped annually," Hannum said. 

Hannum said the Web site, www.Chep.com/onepallet, is a result of a lifecycle inventory analysis provided by Franklin Associates.

iGPS has also developed a green calculator, which not surprisingly touts the benefits of plastic over wood pallets. The question to ask with any of these cost calculators is, "What are the assumptions?" The number of trips for a pallet in its lifetime and the number of turns in a year can be manipulated to drastically change the outcome.

The discussion about sustainability is only starting to heat up. Retailers, led by Wal-Mart, are starting to rate suppliers based on their environmental performance. Michael said that the Wal-Mart green scorecard has not directly addressed pallets yet, but he said that earlier this year the retail giant indicated that pallets are on the horizon.

Again, while both wood and plastic pallets have individual, unique properties, the most important aspect of "going green" is "getting clean"-reducing the amount of pallets and waste materials that hit the landfills. If manufacturers can find ways to continually reuse products and reduce the amount of waste as a result of production, then, wood or plastic, the product is ultimately eco-friendly.

"For either one, the wooden pallet or the plastic pallet, it's environmentally friendly if it goes through many cycles and if it's going to be reused over and over again," Mooney said. "The number one factor is efficiency."

Copyright 2009 Industrial Reporting


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