With the Cost of Wood Pallets Rising, Should You be Considering an Alternative?

Pallets make the world go ‘round. Well, not exactly. Pallets do, though, make shipping much easier, and send products around the world. Because pallets are hugely important for shipping, it’s important to make the best choice possible about purchasing them. When you also take into account shipping costs, purchase costs, and replacement rates, among many other factors, finding quality pallets for good prices is crucial. This especially relevant as lumber prices—and by extension, wood pallet prices—continue to rise.

The Problem with Wood Pallets

Lumber costs are undeniably rising. Starting in early 2016, lumber prices were on a consistent upward trend, peaking in May 2018. Though they rapidly declined in the following months, since October 2018, lumber prices have been slowly—but steadily—rising. This has a two-part reason. First, due to recent forest fires, the number of trees available to log has gone down, and forests take decades to fully grow back. Second, in 2017, higher tariffs on imported Canadian lumber were imposed, forcing lumber companies to charge more to make up the difference. Between these, lumber prices have been on an upward trajectory, and—in spite of the hopeful period in the summer of 2018—they do not look to be stopping any time soon.

Despite this, at first glance, wood pallets may still seem like the most cost-effective option. Ranging roughly between $6 and $25 apiece, each order is cheaper upfront than plastic alternatives, which cost anywhere from $7 to $150 apiece. This seems like convenient saving, especially for smaller companies or shipments.  However, lasting up to 250 trips on average, plastic pallets are far more durable than their wooden counterparts, which usually max out after the sixth or seventh trip. If you are looking for cost-effective long-term shipping solutions, plastic is your best bet.

Wood vs. Plastic Pallets

If we look at the base numbers, plastic pallets are well worth the upfront cost—plastic pallets have a higher ROI than wood pallets. Let’s calculate ROI as number of trips a pallet can be used divided by the cost of a single pallet, multiplied by 100. Wood pallets last for about six trips, and they have a median cost of $16. This comes out to wood pallet ROI = 37.5. On the other hand, plastic pallets reliably last for 250 trips, but have a median cost of $72 apiece. This gives us plastic pallet ROI = 347. Plastic pallets have an ROI of almost ten times that of wood pallets, making them a far better long-term investment. While these numbers can fluctuate depending on how much your pallets cost, it’s a good example of how plastic pallets affect long-term budgets. Even if you purchase the most expensive plastic pallet, you get an ROI of 60—still noticeably higher than the ROI of wood pallets—assuming the pallets only last 250 trips, not longer. This doesn’t even take into account the other cost benefits of plastic pallets.

More Budget Benefits

One of the main cost advantages of plastic over wood pallets is their longevity. As mentioned before, plastic pallets can be used for up to 250 trips or about 10 years, far outlasting their wood counterparts. Plastic pallets are far easier to reuse—they can be sanitized before and after transporting food, while wooden pallets can only be used for food or pharmaceuticals one time. If you’re shipping items that don’t need sanitized pallets (such as food or pharmaceutical supplies), you can easily use soap and water to clean them. You don’t need to worry about adding costs for specific sanitizers unless they are required by health codes.

Using plastic pallets can also cut down on your shipping costs. They come in a variety of styles and sizes, so you can get the one that best fits your needs—no worrying about filling up more space than you need. Different styles of pallet also have different weights. For short term or single use, you can buy lightweight options such as our economical pallets, which can transport heavy loads without adding much to the shipment’s total weight—the lightest ones weigh 11 pounds apiece.

Your storage costs can also be reduced by switching to plastic pallets. Unlike wood, which needs to be stored in a cool, dry place to avoid bugs, mold, and water damage, plastic is incredibly durable. It can be stored pretty much anywhere you have space without being substantially worse for the wear. This means you can use existing space in your warehouses without needing to worry about climate control or air moisture content, just space. Plastic pallets also take up less space than wood pallets, as the plastic is less thick than the wood pieces used in wood pallets. Some pallet styles even have nesting capabilities, and can be easily stacked to store in small spaces.

Another economic advantage of plastic pallets is their resale ability. Because plastic pallets are incredibly durable, if you are done with them before they break or are otherwise useless or unsafe, they can be resold and continue to be in use. Conversely, if you are interested in switching to plastic pallets but need them to be a bit more affordable off the bat, you can purchase used pallets for lower prices. The style and quantity availability are not consistent, but they are a good way to see if plastic pallets are the right choice for your shipping needs.

Other Perks of Plastic Pallets

Plastic pallets are more eco-friendly than wood alternatives. This sounds counterintuitive, since plastic is one of the main environmental pollutants. However, because they last longer than wood pallets, they require less energy to make. They also can eventually be recycled and made into new useful products. Some plastic pallets are made of recycled plastic too—ACM, or Advanced Composite Material. These tend to be less expensive than other plastics, because the product is already made and only needs to be melted down and remolded. Though this might not affect your gross spending, it is always good to be aware of the options. Plus, using recycled materials or recycling your materials could be a good marketing point.

Plastic pallets are also less likely to be damaged in transport. Though they cannot be repaired after breaking—unlike wood, which often can be repaired after the first few breaks—plastic pallet breaks are far less common. They don’t get soggy or moldy after going through adverse weather, so you don’t need to get new pallets after unloading in a storm.

Plastic pallets are also safer than wooden versions. Wood—especially unfinished wood, like most pallets are made with—splinters. If a wooden pallet breaks, you run a high risk of a worker getting a splinter. Splinters are generally just a nuisance, but occasionally cause some real problems, so they are worth avoiding if possible. Wood pallets also weigh more than plastic ones. Standard wooden models generally weigh somewhere around 30-50 pounds. Plastic pallets, depending on the model, can weigh as little as 11 pounds. You can also find heavy-duty models with comparable weights to wood pallets. Aside from saving on shipping costs, the lighter weight makes plastic pallets safer to handle and less likely to cause injuries. Wood pallets are also susceptible to mold, fungus, and bug infestations if stored in a moist environment. Obviously, this makes them unfit for shipping, but these can also potentially trigger an allergic reaction in a worker removing them, a risk no one wants to take.  

Plastic pallets are uniformly shaped and sized by type, so you can use them easily in automated systems without worrying about jamming. It also makes it easy to know exactly how you will pack items onto the pallets, because you don’t need to account for warps or weak spots in the wood. Plastic pallets also tend to be designed so forklifts have easy access from any side. No more figuring out how to maneuver to get just the right angle to pick up your pallets.

While it’s an optional perk, plastic pallets also tend to look nicer than wood. They can be used for display purposes, if the retailer you ship to is so inclined. This can save money on labor on their end, which may make them more inclined to continue ordering from you. This is, of course, if they agree that the pallets look cleaner and neater than wood versions or are more convenient than what they have set up.Wood pallets, while the traditional shipping choice, are becoming less and less realistic to use. Plastic pallets are a fantastic alternative. Although they cost more upfront, plastic pallets are well worth it in the end. They are more durable, last longer, and weigh less, along with other convenient benefits. If you are interested in learning more about your plastic pallet options, please don’t hesitate to contact us. We would love to work with you to find the perfect plastic pallet for your shipping needs.