broken goods. These forces can be the result of acceleration, braking, accidents, and vibrations in combination with the gravitation impact.
Prerequisites for a perfect delivery are proper packaging and correct labeling. Factories are normally using packaging, which is good enough to protect the products when they are moved on a pallet. The packaging might not be good enough for transporting it as a single shipping unit. A shipping unit is a set of products that are packed together in one physical package, which cannot be divided in more units and has a unique Serial Shipping Container Code (SSCC) identification number on the shipping label. A SSCC barcode on the label is used to identify the shipping unit and is scanned throughout the transportation network. Other words for a ship- ping unit are package, box, pallet, or parcel. Also, the term “handling unit”
is used, which is, for example, a pallet containing multiple parcels for mul- tiple customers. The parcels have their own unique shipping unit labels, which will have their own routing after the first sorting center. A pallet is a logistics tool to move and store goods by a lift, reach or Electric Pallet Truck (EPT). A shipper can buy new or used pallets from pallet providers, but it is also possible to rent them from a rental company. Globally, there are many non-standard pallet sizes; however, there are Euro, UK, North- American, and more standardized sizes with their own specific dimen- sions and load capacities. The dimensions (l × w × h) of some example pallet types are 80 cm × 120 cm × 15 cm (Euro), 100 cm × 120 cm × 15 cm (UK), 48 inches × 40 inches × 6 inches (North America), and TAPs with various dimensions. The weight of an empty pallet can be up to 25 kg. Each industry has its own standards and requirements, but pallets can be made of various raw materials: hard wood, plastic, pressed wood, metal, and coconut. Each type has its typical characteristics such as quality, lifetime, weight, dimen- sions, material, and price. It is therefore important to know upfront what type of goods the pallets are supposed to protect and to which destinations the pallets are going to be sent, as various countries can use different stan- dards, before purchasing or renting them. The exact pallet-purchasing price depends on the pallet dimensions and the used raw material, but generally, the raw material accounts for two-thirds of the price and the labor for one- third. The transportation costs per pallet are limited as a standard trailer can load up to 500–600 empty pallets. Figure 2.3 illustrates an example of a pallet. There are no global pallet providers; there are only local or regional players. It is a buyers’ market as there are many pallet providers. Only a few of them have a network of production facilities and storage locations.
Some players have a European Pallet Association (EPAL) license for Euro
pallets, which meet the standards and allow the exchange of “pallet for pal- let.” To enable a pallet exchange process between shippers, carriers, and receivers, an accurate pallet registration system is required. As it is often not possible or economical, because the transportation and management costs are higher than the pallet price, to exchange pallets with other coun- tries, shippers often use the cheaper TAPs. A pallet registration process starts at the unloading of the truck. The unloader counts the number of received pallets, types, their quality, and the presence of the International Plant Protection Convention (IPPC) stamp on the pallet. IPPC is part of the United Nations’ (UN) Food and Agriculture Organization (FAO), which issued and maintains this standard. The stamp indicates for interna- tional flows that the solid wooden pallet has been heat treated or fumigated to prevent diseases such as wood pests from transferring from one coun- try to another. The standard layout of the stamp includes the IPPC logo;
International Organization for Standardization (ISO) 3166 two-letter coun- try code, region, and unique registration number issued by the regional Phytosanitary to the packaging manufacturer; and the Heat Treatment (HT) acronym. The International Standards for Phytosanitary Measures (IPSM) 15 regulations prescribe that the location of the stamp is provided on two opposite sides of a package or pallet so that it is clearly visible for a customs officer. The counted pallets are checked on differences against
FIGURE 2.3
Pallet. (From www.pixabay.com.)
what is mentioned on the transportation document such as Convention Relative au Contrat de Transport International de Marchandises par Route (CMR) for road transportation. Companies register any difference on the transportation document and communicate these to the sender of the goods and the pallet pool provider. These rental pallet providers require that everyone who rented pallets takes care of their in- and outbound registration. Any missing, lost, or incorrectly registered pallet needs to be paid by the administrative receiver. The number of pallets on the documents, physically received and accepted are registered in the pallet adminis tration tool.
The pallet outbound process starts when loading the truck, where the number of pallets per pallet type and ship-to are registered in the pal- let administration tool. This registration can be done in a WMS or any other tool. Registration accuracy is crucial as invoicing is based on the pallets entering the organization minus the ones for which there is evi- dence that they have been shipped to an approved address. To verify if the registered number and type of pallets are also physically there, a periodic, often monthly, stock counting process is executed. This process starts with creating count lists and assigning employees to them. They check per location the number of pallets and their types and write down any difference. Then the count lists are handed over to the pallet manager to compare the physical numbers with the stock list. Differences are ana- lyzed and explained. The stock list is adjusted to the actual physical situ- ation. Credit or debit notes are created and sent to the shipper, receiver, and pool provider. Part of pallet management is to create a pallet budget, which is reviewed periodically. As pallets are often “lost,” it is important to create a culture where this hidden cost is seen as a significant process, which requires discipline and training to understand and control the pal- let flows. The pallet registration process is audited and improved regularly.
Shippers can receive high charges, because the outbound registration is not accurate enough due to, for example, the long lead-time between the event and the registration. It also happens that pallets are registered on the organization’s account, but this did not take place in reality while the registrations are not checked regularly. The ex-factory package is often not good enough to ship individual products via almost any transporta- tion network, but certainly not good enough to be shipped via a parcel &
express network. This is the root cause of a high number of damages. The packages are bumping against each other, dropping, and/or falling from conveyors. International shipments suffer more than domestic ones due
to more loading and unloading activities. It is important to use light and dense, but solid, packaging to keep transportation costs under control.
Hazardous material requires more expensive packaging compared to stan- dard cargo. Each shipping unit needs to have a shipping label mentioning the products, country of origin, weight and any other info requested by the destination country. It is crucial to keep the goods within the pal- lets boundaries to prevent damages due to lift and pallet truck handling.
Figure 2.4 shows an example of goods within the pallet boundaries.
Another way to prevent damages is to put the most robust packages on a pallet first and then put lighter products on them.