Pallets are being used more frequently to reduce the amount of manual handling, but it is doing so at the expense of freight. With the cost of rising freight, does this still make sense? As companies consider these factors, here are some examples of when not to palletize.

Companies had a choice to go with pallets that speed up loading and unloading and reduce product damage to goods or to floor load. Clamp trucks were often used to speed loading but because of the damage they created, they were referred to as the squeeze of death as they caused high damage. Pallets became the alternative. They provide a softer approach.

But pallets chew up capacity in a truck. By eliminating them, companies like Frito Lay have often achieved numbers in the 90+% utilization of the water cube (the 100% utilization of capacity of the trailer would be when it was full of water). Frito has traditionally seen cube maximization as an important metric and key cost driver. All their salty snacks are hand loaded onto high-cube trailers. The one redeeming factor is that the cases Frito uses are relatively large and light.

Another consideration is that while the pallet takes up space, weight must be a consideration, because this can detract from the payload. As an example, 60 Chep pallets weigh over 3,900 lbs. By taking away pallets, you can increase the weight of the product that can be hauled by 8%. A manufacturer of heavy consumer goods ships from its plants to its DC’s on slip-sheets. They have calculated that the extra labor required to palletize at the DC is much less than the freight gain.

It is important to understand there can be many costs associated when shipping without pallets. It is called shipping on the floor. This is where technology can come into play. There is an approach called “slip sheets”. The product ships on a large piece of plastic that is pulled-pushed and manipulated onto and off the platens of a forklift with a special attachment. Additional labor costs are required in palletized shipping, if it is requested by the customer or put onto racks for efficient storage.

The last item that must be taken into consideration is the cost of the pallets themselves. Whether a pallet exchange program, disposable pallets, or rented pallets (like Chep) are used, the pallets themselves cost money.

The decision to ship on or off a pallet is a consideration, and more and more Companies are factoring this into their decision making process as they review cost savings against the potential for damage.

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