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Logistics expertise 15.11.2021
6 min.

Digital pallet management vs. analogue pallet exchange Expert

Tips and trends

The wooden Euro pallet is the most widely used load carrier for truck transport

Pallets have had a significant supporting role in the logistics industry since the 1960s. The EUR-pallet was developed as a multi-use exchange pallet and quickly became a driver of standardisation within the logistics industry. But the analogue exchange process is often complicated and a source of frustration for road hauliers. In this blog article, we take a look at the opportunities and obstacles offered by pallet exchanges, and peek into the digitalised future.

The EUR-pallet – efficient use of space for all kinds of products

It’s estimated that around 600 million flat pallets, built according to the European norm 13698-1 and usually made of wood, are in use around Europe. They are an efficient way for hauliers and trade companies to transport goods, but they also create additional work. They are made from plastic or wood and sorted into the categories New, Good As New, Used Exchangeable and Defective. The pallet exchange system is designed to optimise the use of space in trucks, trains and containers. But it also increases efficiency, as the EUR-pallets are in constant circulation.

What is the current exchange process?

Every time goods are loaded or unloaded, the driver and the recipient of the goods must agree upon the number of pallets to be exchanged and the number of defective pallets. These numbers are recorded on the pallet collection note. However, there is no standard form. It is up to the parties in question as to how many specifications are made regarding pallet evaluation or pallets that are not exchanged. Plenty of companies also use pallet pools and pallet pool notes.

What do potential pallet exchange problems look like?

There might be a problem if a pallet offered by one of the parties is missing or defective. The recipient has the right to insist that an intact pallet be delivered later on. This means that the driver might end up in pallet debt. Because of this, many road hauliers carry empty pallets with them that they can use to make up a deficit if a pallet is not exchanged.  But doing so requires extra effort and takes up valuable cargo space. Pallet boxes that can be attached beneath the cargo space can help. 

In addition to defining when a pallet is considered defective, loading times at loading docks also play an important role. The driver is often under massive amounts of pressure to get things moving again, and it’s only much later that they make sure that their pallets are documented correctly. As a result, pallet notes are filled out incorrectly or the driver may even bring too many or too few pallets back with them. This is particularly true on longer routes, when pallet notes, together with other documentation, are collected for weeks at a time before being returned to the accounting department at the end of the trip. This increases the risk that forms will be filled out incorrectly or that individual documents will be lost, get wet, or end up unreadable for a variety of other reasons. These are all typical errors caused by a lack of time and analogue processes. 

If the transport customer changes along the route, or other plans change at short notice, there many also be significant problems, not to mention the ones caused by regional differences. In the blog post “5 pallet exchange problems”, TIMOCOM lawyer Alexander Oebel provides more detail regarding issues with pallet exchanges and gives tips on how to avoid those problems.

And of course pallet prices are rising quite independent of problems with the exchange itself. 

What are some tips for a successful pallet exchange?

The first and easiest tip is to ensure that the exchange is planned and documented properly. Get in touch with all participants before starting the order. Make sure it is clear who is responsible if something doesn’t go as planned. Are there any regional differences you have to take into account? If that is the case, digital pallet tools are particularly useful. You can use them to order or rent the exact amount and quality of pallets that you need, or have pallets sent to your business partner. Some companies are already providing electronic vouchers that allow you to simply, securely and quickly deal with pallet credits or debts by transferring or reducing them.

What will the pallet exchange of the future look like?

As with so much of the supply chain, the future is digital. The German Federal Ministry of Transport and Digital Infrastructure (BMVI) has started a large research project on the subject. A Frauenhofer IML spin-off company has introduced an app-based cloud platform for pallet management, called Silicon Economy. With the help of artificial intelligence, an open-source component connects and manages the people and companies participating in the supply chain using an e-pallet note. The note records the exchange process digitally and can be viewed by both parties at any time. Pallet debt is also documented fully automatically in a legally binding manner. Systems from PAKi   , for example, allow drivers to digitalise and therefore simplify pallet management. Pallets are input digitally, and the agreement with the recipient of the goods also takes place digitally, saving time and avoiding errors.

Conclusion:

The pallet exchange process requires optimisation. The first digital solutions, designed to simplify processes, are already appearing on the market. But it remains to be seen how long it will take before all companies along the supply chain make their way into the digital world.

 

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