World views of Dr. L. Allan Austin

About Pallet a transportable platform
November 10, 2010

The pallet has become the cornerstone of the entire materials handling industry. It is the means by which the manufacturing, transport and distribution functions are united into a single gauge. The Australian Experience In the early 1950′s materials handling in Australia was labor intensive and cumbersome process.
This was radically changed, when it was realized that the pallets left behind by the U.S. army after World War II could be used to efficiently transport foodstuff.The concept spread as producers, manufacturers and retailers realized that the pallet offered many advantages:
  • Goods could be handled faster
  • Labor cost was reduced
  • Damage to goods in transit was significantly less.
Today Australia has a pallet pool of approximately 10 million pallets which accounts for approximately 85% of the total pallet use. Because of the original pallets left behind by the U.S. Army were of standard size and design, all the facets of warehousing and distribution were standardized from the outset.
Standardization in Warehouse Racking
Pallets could be transferred from the producer to the manufacturer and to the retailer with the minimum need to handle products.

  • Standardization in Materials Handling Equipment
  • Standardization of the Transport Industry
  • Forklift and pallet handling equipment including automatic warehouse systems.

This brought significant benefits with the standardization of small, medium and large transport vehicles to cater for local distribution or regional line haul requirements.

The pallet has become the cornerstone of the entire materials handling industry. It is the means by which the manufacturing, transport and distribution functions are united into a single gauge.

In Asia, however, polarization is a relatively unknown concept largely because labor costs have traditionally been low. In the 1970′s goods entering the ports were handled by laborers from the main vessel, through transshipment by smaller vessels through to final distribution to shops and end-users.

The process was time consuming and depended entirely on a large pool of low cost workers and damage to goods in transit was common place.

Today, Malaysia and Singapore which has the most modern equipment and the largest transshipment port in the world handling hundreds of thousands of vessels each year (with an average turnaround time of 11 hours per vessel).

Increasingly, products are being transported between Asian countries via road as the highway networks become more widespread and efficient. Resulting in standardization between countries have become even more critical to ensure maximized efficiency.

The need is for standardization in racking , materials handling facilities, central distribution systems and transportation which will facilitate significant productivity savings, and the pivotal point is a standard sized pallet within a hire pool system resulting in lower costs that are reflected in lower cost for consumer goods.

According to Singapore’s Economic Development Board, “Standardization” is the common denominator in the logistic chain and is pivotal. Standardization will enhance Singapore’s competitiveness especially in the major areas of automated storage and retrieval systems.

With a universally accepted standard sized pallet, warehouses and distribution systems can be streamlined, workers can operate more efficiently, cartons and packaging are in conformity and other materials handling equipments  does not need to be adjusted. The concept is valid and the advantages of standardization are far reaching.

The Singapore Institute of Standards and Industrial Research SISIR, has set out a number of guidelines for pallet size. The ISO approved pallet, measuring 1000mm x 1200mm with four way access for forklifts is considered  the optimum size for handling modern, international sized cartons .

The pallet fits modern racking systems, containers and trucks with minimal wastage of space and conforms to ISDO 445:1984. In the SISIR document, specification for timber pallets, Singapore standard 334:1988, the scope, definitions, designations, methods of testing and pallet handling are listed in detail.

The advantages of standard pallets are evident in a central distribution system such as Davids Asia Pte Ltd, a supermarket supplier, and according to local Managing Director; John DEuchars said:

“To set up a central warehouse worth several million dollars, standard sized pallets are a fundamental part of the system. To accommodate pallets of different sizes, I would need different forklifts, different racking and the end result would mean higher costs passed onto the consumer”

Standardization is efficient and cost-effective, manufacturers can design cartons for optimum usage of space and the transport industry can see that different pallets sizes is a waste of  space , time and money. Standardization trims costs across all levels of industry, and from one country to the next.

The advantages of standardizing  pallets clearly outweigh the disadvantages although one major disadvantage would be the concern about what is done with all the current pallets that do not conform to 1000mm x 1200mm size.

Initially, this will be a problem although the wood is valuable and could be sold and recycled. Alternatively ,non standardized pallets can be for one way exported where recovery is not an option.

Once the changeover to a standard size is completed, any transitory inconvenience will become a dim memory in favor of many advantages experienced of using the standard pallet.

The transition to standardized pallets is simpler with the availability of a pallet hire or pooling system. Although the relative cost of a pallet is low, the cumulative costs are substantial.

The function of the pool is to ensure that the pallets are redistributed  back into the user and that the ownership  of the pallet – wherever it goes to, its return, its condition and numerous other factors are not impediments to the distribution process. An open pool manages all these risks.

The operation of the pallet hire system is simple and user friendly. The users do not purchase the pallets; avoid  repair  and recovery costs, have no disposal and all hired  pallets can be transferred to another  party or physically exchanged at the point of delivery with no storage and relocation costs, the use, demand and supply of hired pallets would balance out through the entire distribution chain.

The pallet hire system has a computerized system that automatically  tracks all the hire pallets in the pool. The pallet hire company is able to supply to the customers, at the end of each month, a detailed pallet hire invoice that accurately accounts for the pallet usage and hire charges.

Utilization of the hired pallets are carefully monitored to assist the customers to maximize their storage requirements in the most cost efficient manner.

The implementation of standardization in racking, materials handling facilities, transportation and central distribution systems will facilitate productivity savings as labor cost keeps continuously escalating. The pallet therefore, is the cornerstone of the entire materials handling industry.

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