Who stole my pallet?
For more than two decades TAPA EMEA has been helping Manufacturers and Logistics Service Providers protect their supply chains from the threat of cargo thefts … but, today, the Association is evolving to take a broader view of all aspects which lead to, and are vital components of, supply chain resilience such as, in this case, the very platform required to support the safe, secure, and timely storage and transportation of goods…
As we all know, the supply chain has a platform that is used for grouping, ungrouping, delivering, storing, displaying products and many other essential purposes. Most of the consumer goods around us have travelled on this unit which enables cost savings, efficiency, product protection and safety throughout the supply chain.
That item is the pallet. Whether plastic or wooden, single-use or reusable, it is the humble platform that helps move goods around the world. And, increasingly, it is also the protagonist of one of the most hidden crimes in the supply chain industry: misappropriation and illicit buying and selling.
CHEP, the company where I currently work, is a global organisation that offers pallet pooling services to manufacturers and distributors. Our circular system is based on sharing and reusing pallets throughout the supply chain. In other words, it is a partnership with our customers, as the customer pays for the time they use our blue pallets, instead of buying them outright. Once the customer or the distributor confirms that the pallets are empty and ready to be picked up through our online system, we take care of collecting the pallets at their destination and inspecting and repairing them when needed at our service centres before returning them into circulation. It sounds simple, but behind every movement there are complex logistics that are difficult to describe in just a few lines.
However, that trust, and cooperation is not always repaid, and goodwill and honesty do not always prevail.
There has been an overall increase in demand for pallets across Europe at a time when pallet manufacturing supply has been limited and reducing due to COVID-19, the conflict in Ukraine and sanctions related to it. This has increased not only the costs of replacing destroyed or lost assets but also the incentive for non-pool customers to misuse lost pooled equipment.
Unfortunately, a percentage of pallets often end up being used by companies or individuals who have not paid for them, or even worse, have sometimes sold them on, resulting in a crime of misappropriation.
This type of illegal activity affects both pooling companies and companies that own pallets; we all suffer from theft on a daily basis. Due to the soaring price of timber, and distributors holding onto pallets for longer periods, theft is becoming more common.
With market conditions remaining volatile, pallet availability has never been more integral to keeping supply chains moving across Europe. Not respecting the rules of the pallet industry can lead to a negative impact throughout the supply chain and potentially also affect the end consumer.
Another important aspect to bear in mind is the sustainability of the supply chain. The ’use and dispose’ culture has prevailed over the last 50 years, leading to an exponential increase in waste and an irresponsible use of limited natural resources. Today, it’s clearer than ever that a shift to a culture of ‘repair, reuse and recycle’ is vital if we want to ensure that future generations have access to all of the natural resources, we, and previous generations, have enjoyed. This is precisely the culture and ethos at the heart of our business at CHEP, based on sharing and reusing millions of pallets every day, as well as maintaining, repairing and putting them back into circulation. In other words: the circular economy at its best.
If those reusable and returnable pallets get lost, the principles of the circular economy are broken. We need to make more new pallets, thus increasing the need for timber as a natural resource, and ultimately producing more waste.
Types of pallets
Pooling companies mainly distinguish their pallets by colour, as well as by individual manufacturing characteristics. CHEP’s pallets are blue, but there are other companies in the industry that identify their pallets as red or green. Generally speaking, they are called “pooling” pallets in the industry and “coloured” pallets in the recycler sector.
The exchange pallets (EPAL/EUR system) are wood-coloured and known in the industry as “white pallets”. Users can exchange them for the same type of pallet or send them at a flat rate, with the cost being included in the shipping invoice.
There are also white pallets that do not belong to any system and are kept in property. These pallets have different degrees of strength and quality. This category also includes the single-use pallet, which, as its name suggests, is part of the “throw-away” culture.
Therefore, with the exception of the latter disposable category, the pallet is not a waste product that can be disposed of. I am not referring to the use by individuals to create furniture or decorative elements (which should not be done with pooling or exchange pallets in any case), I am referring to the illicit second-hand market that develops between companies, individuals and some of the pallet recycling and buying and selling businesses that buy stolen products.
Collaboration as an ally against pallet theft
Our European Asset Protection department has carried out numerous investigations and prosecutions over the last 20 years, winning countless court cases throughout Europe.
But with the number of crimes increasing, as well as the profit generated from these illicit transactions, a coordinated industry-wide approach is needed to truly tackle pallet theft.
Digitalization has proven to be an ally against pallet loss. For instance, at CHEP we have recently started to install ‘track and trace’ devices on some of our pallets to increase visibility and control over their location.
But technology alone won’t solve the problem. It is time to address and give more visibility to this criminal practice. The security departments of manufacturers, logistics and transport companies, wholesalers, distribution chains, as well as recyclers and second-hand establishments can act responsibly and collaborate with the different authorities. It is time to challenge the impunity that protects those who appropriate pallets for individual profit.
We know that each pallet can be exposed to misappropriation, but collaboration and knowledge of the impact it generates can change our perspective. And if we don’t do it for financial reasons, let’s do it for our own environmental conscience, as our planet’s resources are limited.
About the Author:
Susana Márquez has developed her career in the Security and Loss Prevention Industry for more than 20 years, having managed safety and security departments in Nike, AS Watson, Claire’s and CeX.
She pioneered creative projects such as “Information Circle 2.0”, which focused on stolen product traceability in cooperation with Law Enforcement Agencies within several European countries. In December 2019, she became European Asset Protection Manager at CHEP, where she looks after the safety and security of the field-based teams while trying to minimise the loss of the company’s famous blue pallets.
