Precise Pallet Management is making inroads for its customers by helping to simplify what traditionally has been an unduly complex and, for drivers, largely convoluted process.
Pallet Management for too many transport operators and logistics outfits remains an arbitrary exchange, contingent on conflicting expectations, miscommunication and shifting rules.
As it involves multiple parties, not often on the same page, knowing where a pallet is or how it got there, depending on the business, can sometimes be just the beginning of the problem.
Pallet handling has long been a cause of mistrust among long term partners in transport and logistics, muddying the waters and in some cases, affecting negotiations and compromising agreements.
Daily hire charges apply to small businesses until they transfer pallets from their account onto the receiver of their goods. Pallet transfers to major retailers, however, are often where pallets get lost.
At no cost the retailer gains the use of the pallets while the small business wears the hire costs until they can compensate the pallets owed to the pallet hire company.
The impact can be devastating to some businesses who don’t have the leverage with the bigger retailers to push back.
In some cases these companies have an agreement in place with the pallet hire company that prevents senders from making a notification of transfers that come off their accounts leaving them exposed to receiver errors.
Precise Pallet Management, a Melbourne company based in Croydon, offers bespoke solutions that help its customers on both sides of an account to resolve issues and, if need be, negotiate claims.
Phil Doolan, PPM Managing Director says the industry, of which he has extensive experience across Australian freight movement and Japanese automotive, was sorely lacking impartiality to resolve pallet loss.
“Some of our customers might have a policy to always transfer to carrier,” he says. “But then a particular carrier may not have a pallet account or, the receiver only exchanges pallets and they won’t accept a transfer. In those situations that means you can’t always necessarily transfer through to the receiver.”
The variation in rules contributes to some of the confusion. Metcash, for instance, issue the driver with a Pallet Transfer Authority (PTA) docket.
In this scenario the sender can’t raise the transfer and that, subsequently, requires that they transfer the carrier.
In the food services industry many receivers don’t have pallet accounts.
“For carriers delivering into the goods and services industry they have to collect a huge number of exchange pieces of timber to get them back and one sender may transfer them to the carrier onto their account and the other one might be getting their pallets back,” Phil says. “Tracking all of that becomes really time consuming and labour intensive.”
Phil, who worked previously at Glen Cameron Group, said the ideal scenario is when the sender of the freight is a customer, the transporter is a customer and the receiver is a customer.
“In those situations, it’s very easy to resolve anything that has gone wrong,” he says.
“We can identify where the pallets have ended up and what happened to them and credit the right people. It’s just about keeping it clean.”
Rather than treat it like a series of transactions some people, according to Phil, treat it as an opportunity to reduce on hire balance, the number of pallets on the pallet account.
There are many opportunistic players out in the marketplace when it comes to pallets, who are happy for people to make mistakes.
“All too often we see complicated supply chains. The sender, transport provider and receivers’ policy and processes just don’t align, and it is left to the transport driver to force it to fit. The driver already has about a dozen other tasks to do. People make it very complicated,” he says.
“They can go out of their way to make it really difficult to deal with you and, unsurprisingly, it results in pallet loss and all too often it’s the transport company who wears it.”
It becomes expensive, not only to compensate loss, but also to manage the inventory of hired pallets.
In a 2018 Deakin’s Centre for Supply Chain and Logistics Pallet Report it identified that 41 per cent of respondents were concerned about pallet loss and that 66 per cent of respondents said the cost of pallet management was their biggest concern.
“We think the solution to both problems is exactly the same. Keep it simple and train staff in simple actions,” Phil says. “There might be an instance of ensuring that pallet hire is being charged at a commercial rate and that the delay days are being applied.”
These all range of course. Major retailers like Woolworths and Coles operate on seven delay days for produce and 30 days for ambient freight. Metcash can top out at 45 days. There are as many rules as there are companies according to Phil.
“A lot of third party logistics providers will ship those pallets off their own account to Coles and they are charging pallet hire as a component of the storage rate,” he says.
“So the company who sent the pallets out stops paying pallet hire to the third party logistics provider but they continue to pay hire for thirty days.”
PPM would then track the transaction and report so the third party logistics company can recharge the pallet hire for the period providing they had the appropriate structures in place. Setting that up is important to reduce loss of margin.
It’s something that often gets missed by companies in their rush to facilitate warehouse sales.
“There’s also costs associated with removing empty pallets from sites, bringing full pallets in and they would often get issue fees,” he says. “It’s through the fork-on fork-off process where the recharge of costs often get missed.”
Pallet control is standardised across products. The complication comes through the transporting of goods. If there’s 200 trucks there’s also 200 control points and a lot more training required.
PPM invests time to identifying trading rules and workflow. It looks to simplify the process so pallets can be managed without a great deal of thought.
“Ideally we want to leave professional drivers to focus on load restraint, fatigue management, delivery documentation and the myriad other responsibilities that make up their role,” he says.
“We’ve put together some information and animations and things like that for them so they can watch a minute long video clip instead of having to read through pages of text.”
According to Phil, PPM also produces pallet docket books for some of the fleets that they look after.
In the last 12 months Precise Pallet Management have increased their staff by over 30 per cent. Last year they moved into a new office. It’s been a steady growth curve since it started operating in 2005.
“We are a business focused on what everyone in our team requires. Everyone is coached and mentored and we do what we can to provide training and opportunities,” Phil says.
“We firmly believe that investing in our staff is what will ensure our customers will get the best service.”