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Wood and Cardboard - Mainstream and Niches
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By esme Neely Smith

Pallets are a key component in the multi-billion-dollar supply chain logistics system that delivers goods across the country and globe. One problem with a pallet can impact a shipment and the satisfaction of a key customer.

With the industry closing in on 2 billion wood pallets in circulation in the United States alone, cardboard pallet manufacturers are seeking to claim a portion of that market. But, how should the two products be compared?

“Cardboard and wood pallets are very different,” said Lindsay Shean, national accounts manager at Valley Pallet in Salinas, California. “Wood pallets are more durable and can be used multiple times. “I actually think it is unreasonable to compare the cardboard pallet to the wood pallet because they are used for different purposes.”

“Generally speaking, the wooden pallet industry does not consider cardboard pallets to be a significant threat because of their inherent limitations,” stated Brad Gething, PhD, NWPCA director of science & technology.

Cardboard pallets are susceptible to moisture, and you would have to alter substantially the multi-billion-dollar supply chain logistics across the country and globally. The limiting properties of cardboard pallets mean that a total overhaul in the system would be needed for safe and effective widespread implementation.

There is also the issue of safety. “While financial savings are important, safety must take precedence,” commented Mike Hachtman, president of Houston-based reLogistics Services, adding that supply chain logistics is a complicated and intricate national web of distribution centers, transportation and warehouse hubs that span the country. Even a small untested change could create a significant safety issue, considering the speed with which goods move from manufacturer to retailer to customer.

An additional benefit of wooden pallets over cardboard ones is their strength in wet and dry weather conditions.

As Shean added, “In cases where unit loads are heavy, or conditions are wet, corrugated pallets are just not safe. Wooden pallets hold up under the stress of loading, transportation, and fork lifts and their drivers, as proven by the state of Oregon independent study.” Shean added that wood is the most practical within the supply chain because it can perform under many different handling conditions. “There are also national and international design standards to protect both consumer goods and supply chain workers,” said Gething. “Implementing paper-based pallets would be a logistical and workplace safety nightmare.”

But, there are some advantages to cardboard pallets for certain sectors. Some companies in the food sector prefer cardboard pallets for shipments. They may even pay more – depending on the product.

These two segments of the pallet industry also share some important goals. Both wood and cardboard pallet producers tout their environmental benefits. The primary benefit of cardboard pallets is they weigh 80 percent less than wood. That is an important distinction, but when examined more closely, it creates important choices for shippers.

While cardboard pallets are fully recyclable, corrugated cardboard pallets are often used just once because of the durability issues they pose for shippers.

While cardboard pallets are lighter than those made of wood, the carbon footprint of manufacturing a cardboard pallet can be five to ten times larger than manufacturing a comparable wooden pallet. Fewer chemicals are used to produce a wooden pallet than it takes to produce a cardboard pallet. In addition, wooden pallets last longer than cardboard pallets and can be used over and over, even when exposed to the elements. That means fewer of them need to be manufactured.

The current market for pallet usage, according to a recent survey by Modern Materials Handling (MMH), indicates that 95 percent of pallet-using companies use wood pallets. Of those companies, 32 percent say they plan on acquiring even more wood pallets than they now use. A relatively small 17 percent of respondents expect to use fewer wood pallets in the next couple of years. The same MMH survey says that of the nearly 2 billion pallets used in this country, about 95 percent are wood and the remaining percentage are plastic, metal, composite or cardboard.

The state of Oregon concurs that cardboard pallets have a very specific niche. In 2016, Oregon Governor Kate Brown directed the Oregon Department of Corrections to participate in a pilot program using corrugated cardboard pallets. In summarizing that trial program, a corrections department report (http://bit.ly/CUJofF) to the state legislature found that, “overall, the cardboard pallets tested did not work for the agency’s transport and storage needs. In addition, cardboard pallets present a number of logistical and cost issues for the agency.”

Although corrugated cardboard pallets were not the answer in Oregon, product trials are likely to continue with other segments of pallet-using businesses. One such example is Haverford College in Pennsylvania which has written a letter to its vendors asking them to switch to using cardboard pallets for their deliveries to the college.

“We’re working our way through our vendor lists and have contacted about a dozen so far,” said Jesse Lytle, vice president and chief of staff for Haverford College. “One supplier responded that Haverford was the first customer to make such a request of them, and they would explore options.” Lytle added that the college will continue to work with vendors through “a transition phase. We expect that environmental and economic advantages of corrugated pallets will encourage suppliers to transition themselves. Re-use of existing products is always better than recycling, so we encourage all suppliers to collect their old pallets for re-use regardless of the material.”

In the case of Haverford College, NWPCA’s Gething noted, “There are at least 15 wood pallet recycling facilities within 50 miles of (the college) that could assist in the wooden pallet recycling process.”

One worldwide retailer trying out the cardboard pallet model is IKEA, which has the ability within its closed-loop distribution system to use corrugated cardboard pallets. According to its website, Ikea’s cardboard pallet holds up to 1,650 pounds. However, the same standard size wooden pallet (48x40) holds up to 4,700 pounds on average, nearly three times the unit load. Because the wooden pallet is stronger it can carry more of a load and helps to reduce the number of shipments and transportation costs – both the economic and environmental costs.

But IKEA is not most companies. With more than 300 stores in 27 countries, and more than 1,000 suppliers in 51 countries with over 30 distribution centers, having their suppliers assemble cardboard pallets on site, makes sense for this large retailer.

“The incredible volume of products shipped to retail stores would require nearly triple the number of deliveries on a cardboard pallet due to limited carrying capacity. And, these deliveries would have to be in absolutely perfect weather, loading, and unloading conditions. That is not realistic at all,” added Hachtman.

The fact is, wooden pallets are environmentally sustainable -- less than one percent of wood pallets that leave the industrial supply chain ending up in landfills. Wood pallets are also 100 percent reusable and renewable. When a wood pallet is no longer useful as a pallet, the wood is recycled for fuel, heating pellets, landscape mulch and animal bedding. The nails are also recyclable.

Should wooden pallet companies be worried about any inroads cardboard pallets are making?

“There is no question that wood pallets win when it comes to durability and unit load capability,” Shean said. “Wooden pallets are designed to meet the weight expectations of the customer. This gives us a durable and strong pallet that can withstand rough handling throughout the supply chain. And strong is safe. With all the attributes of wood, along with its economic and environmental benefits, our industry shines.”

Time will be the test of how corrugated cardboard pallets fare across industry. They will likely always have a place in the market, but for now, that market is a niche one.

Esme Neely Smith is a freelance writer and photographer in Annapolis, MD. She has previously written on numerous topics including boating, education, real estate, retailing, business and the environment. 

Related Links

  • Read the Oregon DOC Report (Feb. 2017)
  • Read "OSHA: Safe Pallet & Material Handling Solutions" (August 2018)
  • Northwest Grocery Association Opposes Corrugated Purchasing Preference
  • Comparing Wooden Pallets and Cardboard Pallets 

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