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Sunday, May 19, 2024

Renting Pallets? Burning Cash!

Pallets are indispensable in modern supply chains for the storage and movement of goods. With so many different types and styles available on the market, there’s a lot to consider when sourcing a pallet. But, the first decision a business has to make is by far the most important, as it’s a decision that can significantly impact your bottom line, and that’s whether to rent or buy.

The pros and cons for each option have been debated for years. Although renting pallets may seem at the outset the more cost-effective option, from our experience speaking to rental customers, this is rarely the case.
One company we’ve recently spoken to, a major British retailer, currently has 25,000 wooden pallets on permanent rental at one site, which never leave the building. Not only are their rental costs huge, but for any breakages they encounter significant fines to cover the repair or replacement of the damaged pallets. We’ve also come across suppliers to our leading supermarkets who appear ‘trapped’ into pallet rental agreements. Here, the supplier will pay the rental company a monthly rental charge or price per trip over a set period, after which the pallet will return to their pool. But whilst this gives the supermarkets free use of the pallets, the suppliers face vast rental charges and hefty penalties for pallets that are lost or broken.
Supermarkets themselves still require pallets to use internally in their warehouses and again are often renting pallets with the perception that it’s cheaper than buying. However, whilst the lower up-front cost for renting pallets might be attractive, it’s important to consider the bigger picture.

This includes:

Hidden costs i.e. for lost or broken pallets
Unexpected paperwork for reporting pallet loss and breakages
Outsourced pallet quality control
Often inferior customer service working with large rental companies

Without a doubt, in the right circumstances, buying plastic pallets and operating your own pool can show a real return on investment, in as little as six months. For further details, contact: 01323 744057 or visit: www.goplasticpallets.com

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