Tip – Don’t Loan Pallets

Question – Why should you loan pallets to another company?

Where have all my pallets gone?

 

Answer – You shouldn’t.

Scenario 1 - The Sales Initiative

Sometimes a carrier will give in and lend a customer pallets. This could be part of the deal but it is often underestimated how much this costs.   Apart from the hire costs that the carrier continues to pay, there is also the admininstrative costs of tracking loaned pallets and then the risk of pallet loss when the arrangement ends or if the other party goes bust.   Business development people need to be told – “loaning pallets is not on”.

Scenario 2 – No exchange on delivery

A more common scenario is when the carrier is asked to deliver  pallets from a customer and deliver them. When the driver gets there he often finds that the delivery point does not have any pallets to exchange.   If he drops off the pallets without receiving empty pallets in exchange then that is when your trouble begins. Consider this:

  • The driver often does not have suitable documentation to record that the pallets are owed -this can lead to a dispute about what happened.  More than likely the carrier ends up losing.
  • How does your pallet controller find out what happened?
  • Someone has to follow up with the delivery point to arrange for the pallets to be picked up.   Who is going to do this?
  • A pick has to be organised to collect the pallets when they become available.  Good luck on this one.  Operations staff struggle to get freight moved and the last thing they need is to allocate a truck to do “unproductive” work.
  • If you are lucky enough to get the pallets picked up what do you do with them? 
    - Take them to a pallet hire depot and dehire them?  What if there is a queue? 
    - Take them back to your depot?  Someone has to unload and then load them.
  • You don’t need to be Einstein to work out that loaning pallets to other companies is not a good idea.  What are they doing with CHEP or Loscam pallets if they don’t have a pallet account.
  • Hand unloading is an option but what if you have more than 1 pallet?  What if your driver injures himself whilst unloading the pallet?
  • Getting your customers to put the goods on plain, disposable pallets is an option but sometimes the pallet is of poor quality and can not be double stacked.

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Scenario 3 – Other’s Pallet Policy

There are some  companies who do have pallet accounts but will not accept transfers on to them.  Instead they operate on an exchange basis.  You could say that this is not ideal but its workable and it would be if they always gave your driver the pallets back at time of delivery.

Often they don’t and will end up gaining pallets as carriers will fail to control what is owed.

How do you deal with this?  Often the carrier is in a no-win situation.  His record keeping of owed pallets is often inadequate and he cannot afford to upset the company who now has his pallets.   Ideally a company who has an exchange policy should be made to ALWAYS exchange.

Until a Code of Conduct comes in you just have to make sure your documentation and record keeping are up to it.

OR

Tell your customers that you will not accept transfers on to your account for customers who do not exchange pallets on delivery.