Two Melbourne transport industry executives, Phil Doolan and Geoff Bird, have launched a specialty business - Precise Pallet Management Pty Ltd (PPM) - to assist businesses reduce costs and avoid problems that accrue with the use and hire of square timber pallets.
The magnitude of this problem can be quickly calculated: at any point in time, Australian manufacturers are estimated to be using 21 million timber pallets – equal to a pallet for every person in Australia.
Pallets are provided for hire by two long-established companies: CHEP (part of Brambles Group) and Loscam.
These two largest pallet hirers have an estimated 22,000 active pallet hire accounts Australia-wide.
According to Doolan, as hire charges may only represent a handful of cents a day per pallet, nobody pays much notice to their pallet use until the monthly hire account is received and the scale of the cost becomes apparent.
“Then there are charges for lost, damaged or simply unaccounted-for pallets, and credits for recoveries,” said Doolan. “For many organisations, there is a significant additional labour cost in tracking down, justifying and reconciling the number of pallets on which the hire charges are based.
“Many businesses have at least one fulltime employee engaged in nothing else but sorting out pallet use, and reconciling their hire charges and accountability.”
PPM uses a software tracking and auditing program to manage the problem.
Doolan and Bird started the company after their initial consulting project, which they undertook on behalf of the mid-sized Melbourne-based transport, distribution and storage company, Glen Cameron Group.
“We successfully reduced the monthly usage of pallets at Glen Cameron Group by 62 per cent,” said Doolan.
PPM also significantly reduced the group’s monthly hire costs.
As well, the company removed the in-house labour input previously occupied with tracking, checking and confirming the status of monthly pallet hire charges.
While standard square timber pallets are used universally, approximately 40 other different types of stillages, storage containers and similar materials handling and distribution aids are used widely. These too are subject to monthly hire charges.
“We can apply the same successful principles to managing these and reducing both the hire cost and associated time inputs for business as well,” added Doolan.