Help For Pallet Woes p.71

By: GEORGE GARNEAU PALLET DISPOSAL costs driving you nuts? Join the crowd.
If only somebody would come along every now and then and cart away that pile of pallets collecting in a corner. And if the pallets could be used again instead of adding to the waste stream, all the better.
That's the concept behind Perfect Pallets.
"It's a good deal for us. It hasn't cost us a thing," said Bob Motel, distribution center director at the Jacksonville-based Florida Times-Union, where Sunday magazines have been coming in for about two years on red plastic skids owned by Indianapolis-based Perfect Pallets.
When enough pallets accumulate, Motel calls the 800 phone number molded onto each skid and orders a pickup. After awhile, a truck arrives, and the pallets depart.
Motel cited "tremendous" savings compared with paying up to $75 a ton to dump used wood pallets in a landfill. Combined with a local company that removes all wood pallets for free, the reusable pallets have helped eliminate pallet disposal costs, Motel said.
The Times-Union is one of about 200 papers that have received preprinted materials on Perfect Pallets' pallets in the four years the company has been in business.
Currently, commercial printing giants Quebecor and R.R. Donnelley use Perfect pallets to hold stacks of Parade and USA Weekend Sunday magazines for delivery by truck to newspapers.
Responding to complaints from newspapers and a proposal by Perfect Pallets, Parade coordinated the use of reusable pallets by its printing company, Quebecor, said John Garvey, Parade senior vice president for manufacturing.
Today, Parade ships 55% of its weekly print order ? 22 million magazines out of a run of 40 million ? on reusable pallets. That's 1,200 pallets a week ? 400 of them plastic from Perfect, the rest pressed wood from another supplier.
"They cost the same, and newspapers get rid of the headache of wood pallets," Garvey said. Taking wood pallets out of the waste stream headed to landfills and incinerators is an environmental bonus, Garvey said, adding that he would use more of the reusable models if they were available.
Perfect Pallet charges $5.25 per pallet per trip ? about the same as the cost of wood pallets, many of which are discarded after one use.
Plus, Perfect Pallets' patented nine-leg model is stronger than wood and uses no nails, making it less likely to break and damage print products. The design protects metal straps from damage by forklifts and pallets are nestable for easy transportation while empty.
On the return trip after delivering Sunday magazines, Perfect Pallets gathers up the pallets from newspapers and resupplies them to printing plants. At least that's the theory.
The company's problem is that newspapers like the pallets too much ? so much that they never let them go.
"Every newspaper we go to has got at least one of our pallets in the mailroom for in-house work," said Mark Haag, one of the owners of Perfect Pallets.
As a result, for every 100 pallets sent out, 30 or 40 don't come back. At $50 to $65 each, the cost adds up quickly.
For the system to work properly, "newspapers have to buy in and return the pallets," said John Rossman, the other main owner and a longtime Indianapolis Newspapers Inc. mailroom supervisor. Pallets are retrieved weekly at big papers, every four or five weeks at smaller ones.
It was Rossman ? who in 26 years in mailroom work at the Indianapolis Star-News learned by experience about pallet disposal problems ? who spawned the idea of reusable pallets.
"I had hundreds of pallets a month I had to find a place for and just couldn't get rid of them," he said, and around the holidays, the flow increased to hundreds a week. With hauling charges sometimes running 50? a pallet, the papers eventually bought compactors to crush pallets before trucking them to city incinerators ? all of which costs money.
Rossman approached Haag, a friend whose family owns a trucking company that just happens to deliver Sunday magazines to newspapers. They formed Perfect Pallets Inc., pooled their money, spent $15,000 for a mold and hired a company to make pallets.
Four years and $600,000 to $700,000 worth of investment later, they have a "marginally profitable" business and 12,000 pallets floating around the country, mostly in the Midwest, but extending from Florida and Texas to the Dakotas, Rossman said.
The company sold outright another 10,000 or so pallets, including 7,000 to the Los Angeles Times for its own distribution operations. (To avoid conflict, Rossman said, Indianapolis Newspapers bought another brand pallet for its palletizing machines but collects and recycles Perfect Pallets.)
The key to the service is that Haag trucking can retrieve pallets relatively efficiently because it delivers Sunday magazines to the newspapers every week. So, on what otherwise would be empty trucks, it hauls stacks of empty pallets. In order to ease recovery, Haag said, Quebecor has agreed to dispatch his pallets only to areas he services.
Others have tried the idea, Rossman said, but nobody else has had the advantage of a built-in retrieval system.
Because so many pallets remain unrecovered ? and have to be replaced, at significant cost ? the company has been unable to reach adequate saturation levels, Rossman said. He hopes that a new lower-cost pallet being developed will allow production of more pallets for less money. Plans call for 30,000 to 40,000 pallets to be in circulation in two years, he said.
That could allow major insert users such as Sears and J.C. Penney to use plastic pallets as well, Haag said, emphasizing that volume is key to success. Having enough pallets in the field could allow trucks to return full of stacked pallets instead of partially full, making the operation more efficient.
?(Tired of dealing with wood pallets that eventually tend to wear down and break down under the weight of newspapers and magazines (top left), Parade, the Sunday newspaper magazine, now ships 55% f uts weekly print order -22 million magazines out of a run of 40 million-on reusable pallets. That's 1,200 pallets a week -400 of them red plastic skids from Perfect Pallets (top right and right) [Photo & Caption]

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?(copyaright: Editor & Publisher June 21, 1997)


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