Pallet Pooling, Supply Chain • min reading time 12

Pallet Collection: How does it work?

Thomas Longeagne published on 27 September 2022

Although it may not seem like it, the collection of pallets represents a particularly important challenge for the supply chain.

Pallet-pooling is a pallet rental-management system allowing companies to avoid investing unnecessarily in their own stock of pallets. This approach, deeply rooted in the circular economy, allows companies to receive the pallets that they require, when they need them. Each new load of pallets meeting stringent quality standards.

To work properly, pallet pooling relies on an effective pallet collection system. However, when pallets are not returned, there are significant repercussions on the supply chain.

In this article, learn how pallet collection works and the issues surrounding it.


Quick Navigation:

I. How does pallet collection work?

II. The importance of pallet collection for the supply chain

III. Scheduling a pallet collection


I. How does pallet collection work?

1. The journey of pallets

When a manufacturer needs pallets, they can place an order with their supplier. The pallets are then delivered directly to their warehouses ready for use.

The manufacturer then loads the pallets, before sending them to its customers.

Once the pallet arrives at its destination, two scenarios are generally seen:

  • The pallet is unloaded: it is emptied of its contents and the goods are distributed on other pallets bound for distribution centers. The pallet is then stored and awaits collection.

  • The pallet is sent as it is to the distribution center. The “reverse logistics” system then allows the pallet to be returned later.

It is then up to the pallet pooling service provider to act, and to collect the pallet.

2. Location suitable for pallet collection

When the manufacturer sends goods out for mass distribution, the pallets used are received by distributors and collated at their sites (known as a drop point). This is why LPR - La Palette Rouge establishes partnerships with retailers in order to be able to recover and then redistribute its pallets.

All distribution sites that receive LPR pallets are eligible for pallet collection, even those with very small volumes. At LPR - La Palette Rouge, there are essentially two types of partners:

  • Logistics platforms. Accustomed to receiving very large volumes of pallets, they play a key role in the pallet industry and in the continuity of the supply chain. The logistics platforms represent the majority of the volumes of pallets that we collect.

  • Small distribution sites. Stores, wholesalers, and independents who manage smaller pallet flows. More numerous, however, they generate lower collection volumes.

II. The importance of pallet collection for the supply chain

Although there is a contract between the pallet pooling company and its customer, there is no commitment between the pallet rental service provider such as LPR - La Palette Rouge, and the distributors and their drop-points.

As these pallets are not subject to contractual obligations on the part of the receiver, it is customary to rely on the agreement between the two parties to ensure the correct collection of the pallets.

For the sake of simplicity or necessity, it is not uncommon to see pallets being reused in drop-points.

However, while reuse of pallets seems to be the most simple and profitable solution in the short term, the reality is very different.

Pallets are at the heart of the circular economy, and their collection contributes to the proper functioning of the supply chain. Their reuse can have significant consequences for those participating in the supply chain:

1. The risk of shortages

When supply chain players store rental pallets for reuse, the rental company's stock decreases accordingly... It can then become difficult for it to meet the pallet needs of its customers (who are primarily retail suppliers).

To overcome this problem, the pallet pooling company is forced to replenish its stock by buying new pallets in order to meet demand.

However, this solution has a significant impact on costs, and this expense may then be passed on throughout the supply chain:

  • The pallet pooling company is forced to increase its costs to meet the additional expense.

  • The cost price increases, and therefore so does the price of goods.

  • Distributors must then also increase prices in stores or accept that their margins are reduced.

In addition, the lack of pallets can also lead to delays in deliveries: which will impact the entire supply chain.

2. The risk of damaging pallets

When a pallet is stored for too long, or reused outside the circuit, it becomes vulnerable.
Humidity and time take their toll, and it is not uncommon to find pallets unusable after several months spent in a warehouse.

Also, excessive use of pallets that haven’t been properly maintained inevitably leads to faster wear.

These pallets must then be replaced. Once again, immobilising pallets for short-term use becomes costly for the entire supply chain.

This only increases the risk of shortages and directly impacts the price of rental pallets, which then affects the other links in the supply chain.

3. The ecological footprint of pallet retention

Beyond the economic aspect, pallet retention goes against the concept of circular economy: it encourages rampant and unnecessary production of pallets.

As we have covered in previous articles, pallet pooling companies must compensate for the retention of their pallets by producing new pallets, which comes with an environmental cost, including:

  • CO2 emissions

  • Felling of new trees

  • Use of fossil fuels

4. The importance of lasting partnerships

Faced with all of these risks, the solution is obvious: the establishment of lasting partnerships between distributors and pallet rental-management companies.

How do we make this happen?

A partnership is a common agreement between two parties. It is important that both parties agree to play their part.

The Distributor

For reasons of simplicity, the distributor may be asked to sort the pallets when they receive them. Sorting prior to collection has several advantages for both parties:

  • It allows the distributor to optimise their storage space. They know the exact location of each pallet, which is more practical whilst storing them.

  • This saves everyone time when retrieving pallets: truck loading is simplified when the pallets are already sorted.

  • The right number and type of trucks can be sent to the site depending on the quantity of pallets on site. This represents a significant saving in terms of energy, time and money.

Additionally, the distributor completes a declaration when it returns the pallets to another distribution point (rather than holding them pending collection).

The Pallet Pooling Company

Your pallet provider ensures a smooth collection of pallets from your site.

They also collect the pallets quickly, to free up space in the distributors' warehouses.

They also monitor drop-points and regularly enquire about collection requirements.

At LPR- La Palette Rouge for example we are committed to agreeing the number of collections needed, so that the pallets do not clutter up your warehouses unnecessarily.

We ensure that the process is simple:

  • You can use our portal, our website, email us or call us – whichever you prefer.

  • Our representatives are always on hand. They will work with you to ensure that the collections do not impact negatively on your business.

  • You can take advantage of the support and expertise of a service dedicated entirely to the collection of pallets.

III. Scheduling a pallet collection

1. How to recognise a rental pallet

Before planning your first pallet collection, it is important to be able to recognise an LPR - La Palette Rouge pallet.

The pallet colour gives a good indication of its owner. Rental pallets are often a particular colour. At LPR-La palette Rouge, our pallets are easily recognisable by their distinctive red colour.

You will also find the message “Inalienable property of LPR” clearly marked.

0U6A1201-min

2. Collection from small distribution sites

Systematic collections allow smaller companies to schedule regular pallet collections.

At LPR - La Palette Rouge, when you choose this solution, we will arrange a meeting with you and your LPR regional representative.

Together, they will agree the recurrence of the collection dependent upon:

  • Your storage capacity

  • The logistics value

  • Your specific needs

This is intended to save you time while maximising truck space: you will no longer need to request collections. These are planned in advance according to the volume of pallets you receive, your needs, and your storage capacity. Collections are pre-organised so that once you have reached your maximum capacity, a collection is made.

It is also possible to request a collection directly by email or telephone from the Collections department, as well as via our website.

Finally, it is important to note that any number of pallets can be collected, even if there are only a very small number of pallets. This type of collection represents more than 45% of the total number of pallets collected each year by LPR-La Palette Rouge.

3. Collection from large scale logistics sites

Large scale logistics sites see a much higher volume of pallets passing through. Their collection needs are much larger, sometimes requiring 2 or 3 collections per day.

To cope with this, all collections are pre-planned. There is no need to make a collection request, as the process is automated. However, there is always the option to make urgent collection request via the MyLPR Retail portal if necessary.

Additionally, MyLPR Retail offers access to a global view of the collection schedule: it allows customers to add a collection, postpone it, cancel it or even have a detailed overview of its current status.

The management of these operations requires special attention, and each is managed individually by one of our experts at LPR – La Palette Rouge.

HubSpot Video

 

4. How do I request a pallet collection?

It’s easy! To make a collection request, you can:


Conclusion

The collection of rental pallets is an essential element in the continuity of the supply chain.

When it is not possible to collect the pallets, all links of the supply chain are impacted. The lack of availability resulting from the immobilisation of rental pallets contributes to the increase in prices and potential delays to delivery times.

By choosing to work with LPR - La Palette Rouge for the collection of pallets, you are choosing to establish a lasting partnership with an organisation committed to ensuring the smooth operation of the supply chain.

Would you like to request a pallet collection?

whitepaper

Need a pallet collection?

Request a collection
Picture of Thomas Longeagne

Thomas Longeagne

Marketing specialist Europe

My articles