06 Jun, 23

The Changing Needs in Wooden Pallets (Malaysia ver.)

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A brief intro into trees and wooden pallet

1.1 The Trees

p07n19vrOne of most commonly found organism in Tropical Rainforest. And Malaysia being situated right above the equator, about 60% of its lands are covered with forest. The most important function of a tree is to convert CO2 into Oxygen, while storing carbon in its trunk. Not to mention that it helps to mitigate greenhouse effect by trapping heat and filtering toxic chemical from the air.

There is a common myth that chopping down trees will only harm the environment which cant be totally true. Study author Dr Tom Pugh, of the Birmingham Institution of Forest Research (BIFoR) said “A young tree can absorb 25 percent more carbon than an older one.” (Joe 2019). Logging & Reforestation can actually help to preserve the environment if done properly.

1.2 Pallets

A sturdy flat platform that is widely used in distribution and logistics. It increases the efficiency of moving goods from point A to point B safely and conveniently. Wood materials are most widely used as it is strong, durable, inexpensive and highly customizable. In the Modern days, it has become an essential component in the supply chain movement. Without the existence of it, it is like the world has no vehicles around, and everyone has to move their legs to reach their destination. And you can already see how inconvenient it would be.

Though it is very common to see well established wooden pallet maker in overseas especially in the US market, Malaysia wooden pallet makers seems to be falling behind with the advancement in terms of the standardization of pallet sizes and uses, the technology integration in the supply chain, or even the use of business solutions that can help clients to solve millions of problems while letting them to focus on their core product/services.

2.0 The changing needs of wooden pallets

2.1 Lack of standardization of wooden pallet sizes and uses

The most commonly heard models are Euro Pallet which has a size of 800 x 1200mm, of which the length of 800mm can actually fits through many doorways in Europe. For US market would be the 40 inches by 48 inches. While Asia country would be 1100 x 1100mm and 1200 x 1000mm. However, in Malaysia context, there are a growing demand for assorted wooden pallet sizes that varies according to individual client, sometimes individual product. It is getting common for odd sizes pallet orders beyond 4 feet sometimes up to 10 feet. While the good news is wooden pallet is highly customizable, so there isn’t much challenge for the pallet makers to produce such product accordingly. However, on the other, it might limit the option of using alternative materials like plastic, paper or pressed wood pallets as it would require new molding to make such sizes which might not be practical for the pallet user.

2.2 Higher unit load per pallet (>1 ton)

Furthermore, there is an increasing loads per pallet capacity demanded from the market. Nowadays its more common seeing a single pallet carrying goods weight 1 to 3 ton as client would want to maximize the unit load per pallet so to ultimately reduce the number of pallets purchased.

2.3 Falling behind in supply chain management solutions

While many other countries pallet provider has expanded their businesses core values by providing supply chain management solutions, most of the local pallet makers are still focusing on producing the product solely. Some of the examples include inventory and warehouse management, Enterprise Resource Planning (ERP system), real time tracking systems and so on.

3.0 When deciding to use wooden pallets

3.1 Compliance with shipping regulation (ISPM 15)

Wooden pallet users should take note about ISPM 15 requirement for exporting. Heat Treatment (Using Heat) or Fumigation (Using Chemical) is required when shipping wood packaging materials overseas. This is to prevent the spread of disease and insect that could negatively affect plants or ecosystems. In the other words, if proper treatment was not done, there is a chance that your goods will be detained in the port somewhere around the world. And trust me, it would be a total nightmare when it happens.

ISPM 15 Chopping on the sides

3.2 Weight Tolerance Requirement

The materials required for wooden pallet to hold 1 ton or 3 ton can be very different, so do the pricing. It is important to share with your pallet provider how much weight it is holding during the shipping in order to design the perfect fit with the right costing.

3.3 Gap Allowance

Is it necessary to be fill all gaps? Or it is fine with 2 -3 inches of gap allowance? That’s going to make a huge difference in the material costing as well.

Wooden Pallet Without Gap

1 – 2 inches gap

4.0 Future prospect and challenges

4.1 Challenges in integrating fully automation machineries

Due to the nature of a tropical rainforest environment, there is a diverse species of wood in the market. The inconsistency type of wood being sourced may pose restriction for fully automation to take place. Whereas, US & Europe they’re using mainly pine wood, so everything can feed into the machines smoothly. In Malaysia, the harder types of wood may jam the machine. Which means more labor work & time spent fixing and resetting the machines posting huge restriction for automation application.

4.2 Adopting new technology and business solutions

It is important for local pallet market to be creative and flexible in creating lasting values to their customers. We should learn from bigger market players and work out relevant solutions that are applicable to our local market condition.

With the recent progression in the Regional Comprehensive Economic Partnership (RCEP) coalition, we wonder what additions it might bring to the whole market environment. Needless to say, the future does seem very exciting to all of us.

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