IOU/Exchange Pallets

If you lend pallets to another company then you it is like you are lending them money and if you don’t have good controls then you may as well give them your credit card and your pin number.

Owed pallets - its like you're giving a loan with no guarantee

There are many pickup and delivery points which operate on a pallet exchange or IOU basis.  This is an area of high risk and needs to be tightly controlled.

Pallet exchanges or IOUs have a high reliance on your staff.  If they don’t understand what they have to do then pallets can be lost.  If you have to use untrained staff then the risk is higher.

Some of the key points regarding IOU management are:

  • It can be expensive – not only are you paying pallet hire but you may also have to pay for a truck to pick up owed pallets.
  • Record what has happened and ensure that your staff and the other party sign the documentation.
  • Consider how you keep track of IOU pallets.  Many people find that the functionality in their pallet control software is inadequate and they resort to using an Excel spreadsheet.
  • If you operate a transport business then it is important that the driver is equipped with IOU pallet docket books.  You should also ensure that there is an adequate checking process to record empty pallets being returned to your depots.
  • Consider a policy of not dropping off pallets if the receiver has none to exchange.
  • Limit the time pallets are owed – you pay for pallets every day.  Don’t let owed pallets get too old – send a report to the other party at least weekly.
  • If you receive pallets from a delivery driver and your receiving staff exchange pallets there is the risk that the sender also puts through a transfer so if you are going to exchange pallets delivered to you then ensure that the sender never transfers to you.  It is best to either transfer every time or exchange every time but never a situation where sometimes it could be one or the other.
  • Pallet Loss Prevention can help monitor IOU pallets but the responsibility for IOU pallets is best controlled by the site which is owed the pallets.

 

Contact us if you need more information as to how best implement a Pallet Exchange/IOU policy.