The current topic: Five problems concerning pallet exchange explained by TimoCom's lawyer
"One wants this, the other wants that."
Erkrath, Germany, 2017-01-20 – In the fast changing transport business, contractors are operating with low profit margins and high time pressure. If pallet exchange is also included, it can quickly end up in a loss-making job. TimoCom's lawyer Alexander Oebel summarises the major problems with the pallet exchange.
1. Alternating clients and changing requirements
Problem: "A client needs a completely empty vehicle, but the next client is expecting empty pallets to exchange. If the contractor transports empty pallets, two to three cargo spaces are directly occupied unless they have a pallet box. It is therefore difficult to equip a vehicle for all cases."
Tip: ask if the client outsources the company's pallet management. You can also buy used pallets, which are much cheaper, before loading. After all: later you will be charged with missing or damaged pallets and sometimes more than 10 Euros per piece are charged.
2. Short-term planning
Problem: "Agreements in the spot market are at short notice. The lorry is often on its way before details concerning pallet exchange have been clarified. Then the contractor realises that the journey was not worth it because a pallet debt incurred."
Tip: in the case of short-term orders, you should clarify any pallet queries directly and keep them in mind when planning the following order. You can also agree when the pallets should be returned.
3. Regional differences
Problem: "Pallet exchange cannot be taken for granted. It is not common in all European countries. When doubt arises the country's language and regulations are a barrier."
Tip: inform yourself about the loading and unloading regulations in the country and keep them in mind when planning.
4. Pallets exchanged for pallets
Problem: "In the case of many contractual clauses, it is unclear who bears the responsibility and risks for the pallet exchange, especially when the return takes place at the unloading location. The effectiveness of such T&Cs is often doubtful. Many are afraid of a legal dispute because they do not want to risk any costs."
Tip: there has been a long list of model clauses in Germany with the name "Bonner und Kölner Palettentausch" (Bonn and Cologne pallet exchange) that can be included in the orders. The number of accepted and exchanged pallets must always be recorded. This way the hauliers do not have to assume the responsibility if there are no pallets waiting for them for example.
The Bonn pallet exchange is well suited for e.g. regular transports where the haulier always takes the empties from the unloading location back to the same loading place.
The Cologne pallet exchange is better when the loading place varies. The haulier has to provide pallets himself at the loading location. He then receives empty pallets at the unloading place for further use.
5. Offsetting prohibition
Problem: "It is a widespread fallacy, that it is law that the freight always has to be paid 100 %. Even in the German and Austrian Freight Forwarders' Standard Terms and Conditions, this principle applies only to a limited extend. In practice, a claim is set-off against the freight cost."
Tip: always clarify in advance the exchange terms and condition. Ask how and where the exchange takes place: Dusseldorf pallets, Euro pallets or more expensive cage pallets? Determine who is responsible if something does not go as agreed. A clear document is the alpha and omega. You should always separate the pallet collection note and the delivery note and check if the corresponding number of pallets has been correctly written and who, where and what was received from whom.