Pallet Pooling, Supply Chain • min reading time 10

How, and why, you should return rental pallets

Diane Carroll published on 20 September 2022

For the majority of companies, pallet rental is often the most cost-effective way to get goods to distributors (or retailers).

Pallet rental is circular in nature. Pallets are delivered, used, then collected, before being repaired and reused.

Often, the final destination of the pallets is the drop points of the distributors or retailers. However, it is not distributors or retailers who rent the pallets, but the suppliers who use them to move the goods to these locations.

In the current climate, wood is an increasingly rare commodity. Collecting rental pallets has become a real issue that all players in the supply chain need to be aware of.

In this article, we explain to you why it is important to return rental pallets, and how to do it.


Quick Navigation:

I. What is pallet pooling?

II. The importance of returning rental pallets

III. How do I return rental pallets

IV. What happens to rental pallets after they are collected?


I. What is pallet pooling?

1. Definition

Pallet pooling (or pallet rental) consists of outsourcing the management of your pool of pallets. An alternative solution to the purchase of pallets.

Pallet pooling consists of subcontracting the management of your stock of pallets, from order, to collection after use, to a specialised company.

It’s a simple system that offers many advantages.

2. How does pallet pooling work?

With pallet pooling, pallets are no longer a product that you buy but a service that you benefit from: the outsourcing of your pallet pool.

Pallet pooling optimises order processing, while reducing transport and warehousing costs.

To move to this system, you need to find a partner who can provide you with a reliable pallet pooling service, such as LPR - La Palette Rouge. Then all you have to do is order the number of pallets you need, when you need them. Once your goods have been transported and these pallets have been used, you notify us which distributors you have sent them to so that they can be collected, repaired and returned to the pallet pool.

Using pallet pooling, you can be sure that you always have the number of pallets you need.

For more information on how pallet pooling works, click here.

3. The benefits of pallet rental

Pallet pooling (or rental) offers many advantages. These include:

  • Removal of hidden costs: training your teams, maintaining your stock of pallets, and repairing the pallets are all time-consuming tasks that take your staff away from focussing on your core business. Pallet pooling removes this distraction.

  • Storage cost savings: having the pallets you need, delivered when you need them, means no unnecessary storage costs.

  • No maintenance costs: by choosing pallet rental, you remove the responsibility and cost of repair, replacement or destruction for end of life pallets. With pallet pooling, all of this is taken care of.

  • More environmentally friendly: using the pallet pooling system, damaged pallets are repaired before being used again. This reduces the production of new pallets, which leads to a reduction in the amount of raw materials used. When they are too damaged to be repaired, they are recycled. In addition, if you choose LPR-La Palette Rouge to provide pooled pallets, pallets supplied will be made of PEFC-certified wood, which ensures sustainable forestry management.

  • You optimise your supply chain: pallet pooling ensures that you always have pallets available that comply with the automation requirements of your supply chain. This reduces breakdowns, stoppages, damage and increases efficiency.

4. The lifecycle of a pallet

The life cycle of a rental pallet includes the production, use, repair, reuse and recycling when they reach the end of their life.

This system allows a longer lifecycle than traditional pallets as they are managed and maintained in good condition.

II. The importance of returning rental pallets

Pallet pooling is a circular economy system. For it to remain effective, it is necessary to be able to collect pallets after each use.

But distributors or retailers, where pallets generally end their journey, have no contractual commitment with pallet pooling companies. This is why it is important to raise awareness. It is important that they understand the challenges associated with collecting pallets, not only for them, but for the supply chain as a whole.

1. The benefits of returning pallets

Returning rental pallets has 3 important impacts for distributors or retailers.

  • Collection ensures the continuity of the supply chain: when rental pallets are not collected, the pallet pooling company is not able to recover its assets. It will have fewer pallets in circulation and therefore fewer pallets available to supply its customers. As a result, it becomes more difficult for suppliers to transport goods to distribution points. This has a direct impact on distributors, who run the risk of not receiving their orders.

  • An economic interest: in order to remain effective, pallet poolers need to recover their pallets.

When the number of pallets in circulation is too low, the pallet pooling company will have to manufacture new ones. This production could be avoided if the right number of pallets remain in circulation.

Ultimately, this production cost will be passed on, via the rental price of the pallets, which will impact the cost of purchasing goods by distributors. In the current climate, the price of raw materials is constantly increasing and some, including wood, are in short supply. This has a direct impact on the production cost of new wooden pallets.

In addition, by returning pallets so that they can continue to circulate, you avoid storage costs in your warehousing.

The collection of pallets represents a financial gain across the board.

  • An ecological interest: as discussed above, if pallets are not collected, it leads to production of new pallets. By over-producing pallets, there is waste of raw materials and an increase in CO2 emissions. Also, if rental pallets are stored for too long before being collected, they can degrade, ending up in too poor condition to be repaired and are recycled instead. As a result, new pallets are required to compensate for their loss. This could be avoided if all rental pallets are returned on time.

2. How to recognise a rental pallet, and what you should do with it

If you have pallets in your warehouses, you need to ensure that they are rental pallets.

Generally, the colour of the pallet provides the best indicator as to whether it is a rental pallet.

At LPR - La Palette Rouge, our pallets are easily recognisable by their distictive red colour. You will also see the inscription “Inalienable property of LPR”. Once you see these two characteristics you can be sure they belong to us!

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III. How do I return rental pallets?

At LPR - La Palette Rouge, returning pallets is easy!

Each time rental pallets are sent to distributors or retailers, manufacturers (LPR customers) indicate the quantity, final destination and date using the dedicated MyLPR application. LPR can then easily recover its assets.

Should the customer’s final location (usually a retailer) decide to send the filled pallets received onto other points of sale, they will need to inform LPR. They can do so very simply via the MyLPR Retail portal, by telephone, email, or by contacting a member of our team.

It is very important to be able to organise the collection of pallets quickly and efficiently, ensuring continuity in the circular economy of the supply chain.

Regional LPR colleagues regularly travel into the field to help retailers manage the collection of its pallets. Together, we work to set up recurring collections.

Once retrieved, our pallets are repaired ready to be reused. LPR-La Palette Rouge has more than 134 service centres repairing its pallets across Europe.

To facilitate the return of pallets, LPR can set up regular, systematic collections , as well as annual collections. Additionally, all links in the supply chain can make collection requests 24 hours a day:

LPR - La Palette Rouge collects its pallets from more than 28,000 points across Europe.

IV. What happens to rental pallets after they are collected?

Pallet rental creates a longer lifecycle for pallets and brings your business into the circular economy.

After collection, the pallet rental company has two options:

  • Repair of damaged pallets: the pallets are sorted and repaired according to quality specifications. Repaired pallets are once again introduced into the pallet pool to be used again.

  • Recycling of damaged pallets: pallets that are too damaged to be repaired, are recycled. For example, at LPR - La Palette Rouge, we transform non-repairable pallets into pellets for heating.


Conclusion

Pallet rental is an economically, ecologically and logistically advantageous system. Returning rental pallets contributes to the circular economy and ensures the continuity of the supply chain by delivering increased availability of pallets for all stakeholders.

Each link in the supply chain has an important role to play in the collection of pallets. To make a collection request for LPR-La Palette Rouge pallets, you can contact us:

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Diane Carroll

Commercial Director UK & Ireland

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