Jane Gorick, UK MD of red pallet pool company LPR, said poor controls meant millions of pallets were disappearing from regional distribution centres or caught up in retailers’ distribution systems and becoming lost and damaged.
She said: “If pallets were treated with the same seriousness as stock and given the security of the retailers’ sites, then there is little reason why they should end up outside the fast-moving consumer goods supply chain.
“Pallets can float around the retailer’s supply chain for weeks, often being used for order picking or downstream distribution.
“It should be borne in mind by the industry that whatever the colour of the pallet, if they end up as ‘tourist pallets’, then the costs of the recovery of the pallets needs to be passed on and therefore spend goes up for the whole supply chain.
“When one is talking about the loss of millions of pallets, the costs stack up.”
The aim of pallet pooling is to take costs out of the supply chain, but the system only works with proper controls, said Mark Luby, president of UK market leader and blue pallet pool company, Chep Europe.
“When individual companies relax their adherence to necessary control mechanisms and allow pallets to be directed to unreported or non-authorised destinations, the supply chain ultimately pays a premium,” he said. “To ensure sustained savings it is important that all pooling participants recommit to the basic principles of shared savings.”