Material Flow Round Table: Quo Vadis Loading Equipment?

Four top managers accepted the invitation to the chic Bader Hotel in Parsdof, not far from the Munich trade fair. Among them: Marcus Falkenhahn, Managing Director of Falkenhahn AG from Geisa, Thomas Hahn, CEO of swoplo AG from Eschborn, Martin Leibrandt, CEO of EPAL European Pallet Association e. V. in Düsseldorf; Jesse Sels, Managing Director of CLD Contraload Group sus Aartselaar in Belgium.

What positions do the experts at the round table represent? Martin Schrüfer, Managing Editor-in-Chief of Materialfluss and LT-manager, and editor Susanne Frank sparked exciting dialog under the "pallet quadriga". After a brief "warm up", the first topic was whether the barter trade should fear the digital marketplace for pallets.

"Is buying the new bartering?"

"Reusable should not necessarily mean more travel, but it should make ecological and economic sense." Thomas Hahn, Swoplo - Image: Thilo Härdtlein

This question was put to the CEO of swoplo AG, Thomas Hahn, who is on his way to shaking up the industry with his internet platform. "Our idea was to make loading equipment logistics cheaper and more transparent." Hahn believes pooling makes perfect sense. "The question is how to do it and what options are available. Pooling is not possible for everyone. We thought about making the benefits of pooling accessible to everyone. In addition, our idea was to provide an online platform for buying and selling pallets. The best option would be a 1:1 pallet exchange. In practice, however, this is often not possible because differences arise. "With our marketplace, we have created an additional way for customers to handle loading equipment differently, independently of service providers. Differences can be resolved downstream via the platform. Customers can decide for themselves whether they want to swap or buy and sell." Every model has its strengths and weaknesses, emphasizes Hahn. It always depends on what the customer needs. It is therefore important that the customer can decide on a case-by-case basis and choose a way to get the best possible outcome for themselves.

Is the digital marketplace for loading equipment a viable model for the future?

Pallet manufacturer Marcus Falkenhahn sees this as a complement to pooling. "For some, it's stored like this, for others like this. Many still have a service provider on site who carries out the sorting. The whole thing could also be completely outsourced," emphasizes Falkenhahn. In his opinion, the 1:1 swap, where a truck brings 33 pallets of goods and takes 33 empty ones, has gone a bit out of fashion because the freight forwarder often doesn't know whether he needs a full or empty truck. As a result, there are many pallet bills in circulation. "One question that comes up is the issue of digitalization. Can I trade the pallet bill? What if I have pallets in Hamburg, for example, and need them in Munich?" the Managing Director asks.

Jesse Sels, Contraload, says that his company scores with an all-inclusive fee per load carrier and has a strong foothold in the plastic loading equipment sector. As a pooling provider, the company does not produce its own containers, even if they are labeled as Contraload property. Sels assumes that there will be more discussions about quality in the digital marketplace. "You buy a new pallet and get a used or repaired one back." In his opinion, the quality problem is not solved when buying and selling.

Quality is the subject of much debate

"We are already looking for alternative materials to replace wood and plastic." Jesse Sels, Contraload - Image: Thilo Härdtlein

"We have tried to present what Mr. Sels has just mentioned in a quality classification poster," notes Martin Leibrandt from EPAL. The European Pallet Association e.V. is the top dog among pool operators and has a huge network. The CEO is familiar with various concepts on the market. "One talks about a 1A pallet, but another means the standard pallet and the third means a new pallet. There is no clear formulation of which quality classes are meant. That was the reason why we issued an application recommendation in collaboration with GS1, where we say that "new" is indisputable. Class A has no signs of use after one run and still has the "bright" quality mark, which is important for product presentation. B is the darkened pallet with minor traces of use, without twisted blocks.

C is the well-known forwarding quality that still fulfills its purpose, but can certainly no longer be used for automated merchandise management systems."

As Leibrandt goes on to explain, a digital pallet bill is currently being developed. This is an attempt to balance the whole thing out a little, because it can happen that someone delivers new pallets and perhaps gets class C back. Leibrandt continues: "This loss in value should be presented and also quantified between the contracting parties. It is about different quality classes with a certain value and then with gradations of 30, 20 and 10 percent or something like that."

Offer transparency

swoplo board member Thomas Hahn comments: "We have the program with which an open or closed pool can be managed, with which quality differences can also be quantified and evaluated. This makes it clear what happens when a manufacturer delivers A quality and what the difference is until the pallet reaches the retailer, and what this transportation costs me. All of this can be made transparent using our model." As Hahn continues, swoplo wants to enable its users to operate pooling themselves. This is done via a secured payment together with a bank and works with 100% security. You get value back when you return loading equipment. Hahn: "We have approaches that are new and approaches that already exist everywhere in the private sector, such as rating participants online. There has not yet been a clear marketplace for loading equipment." He concludes: "You can't say across the board that swapping is best, or that a pooling service provider is best, or that buying and selling is best. It really depends on the situation, emphasizes the swoplo CEO.

The editorial team wants to know what actually makes it so difficult to determine pallet quality. Marcus Falkenhahn thinks it's human nature. "Whoever delivers a pallet claims it is good and the recipient thinks it is bad. This always leads to differences of opinion. But you can easily determine whether the pallet is suitable for high racking or not because the blocks are twisted. Light and dark can also be easily determined, but whether I classify the pallet as B or C may be difficult when exchanging pallets."

In Martin Leibrandt's opinion, the discussion is often just about subjective perception. "Nowadays, we tend to use the load carrier for product presentation as well, and who wants to have their fine chocolate presented on a darkened wooden pallet? Ultimately, however, the darkened pallet fulfills exactly the same requirements as a light pallet. It is completely equivalent for transporting goods."

Debated again and again: Wood versus plastic

"Everyone is talking about RFID, everyone wants it, but no one is prepared to pay for it." Martin Leibrandt, EPAL - Image: Thilo Härdtlein

This is where the topic of plastic versus wood comes up. Does the wooden pallet have any place at all in the display sector? Leibrandt: "Display pallets are usually company pallets and are made of plastic. Plastic instead of wood is a philosophical question. Most people still cut their high-quality meat and vegetables at home on wooden boards, even though they are supposed to be so unhygienic. There are now analyses by the German food institutes that prove the opposite. If I haven't washed a plastic pallet thoroughly and there is perhaps a hairline crack, then I have water in the cracks or in the pallet. Whether this is 100 percent hygienic remains to be seen. This is of course an issue between the plastic and wood factions, because we say that our production is 100 percent natural and it is recycled. A defective plastic pallet is sorted out and not repaired".

In defense of the plastic pallet, Sels interjects: "If a runner or something like that is broken, then you have to do it safely. There's no doubt that the plastic pallet also requires more energy to produce and is more expensive, that's one thing. But that doesn't mean that the wooden pallet is better for the environment. Wood is easier to repair, but a plastic pallet is in circulation for much longer."

"If we want to argue like that, then wooden pallets never break," Falkenhahn interjects. "The pallet is actually only broken through handling, through collision damage during loading and unloading or if it falls from above. But the plastic pallet breaks in the same way."

Not every pallet is repaired, but replaced with a new one straight away, replies Sels. From his previous work with the competition, he knows that pallets were completely replaced after 3 to 5 years. Plastic is still in circulation after 7 to 10 years, claims the Managing Director. Where plastic really makes sense is in the hygiene sector, in the food and pharmaceutical industries. Sels looks a little further into the future and believes that something new will have to replace wood and plastic. Oil reserves are finite and 4 to 5 billion wooden pallets are produced every year. This is too much in the long term, even if the forest is reforested. "We are already looking for alternative materials to replace wood and plastic," reveals Sels.

"There's nothing that can't be replaced," Falkenhahn is certain. For example, pressed pallets made from coconut waste are conceivable. However, more wood is growing worldwide than is being felled. There are many areas in which wood is no longer the first choice and would become available for other uses.