A key component of the business strategy for any pallet recycling business is access to cheap pallet cores. During the first decades of the pallet recycling industry within the 1970s and 1980s, surplus used wood pallets, commonly called pallet cores, were available for free of charge or a minimum of at a comparatively low cost.
As a result, pallet recycling businesses were often very profitable. Over the last 20 years, however, increased competition has led to recyclers bidding competitively for giant pallet core supplies, thereby squeezing profit margins.
Today it’s not uncommon for giant generators of cores like distribution centers, to sell their cores. Cores of the favored 48×40” size may sell within the $1.50 – $2.25 range, counting on a variety of variables like quality and therefore the local level of demand.
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Sources for Cores
In a previous installment, we reviewed numerous sources of free and low-cost pallets. a number of these won’t be appropriate for pallet recycling businesses, which can require substantial volumes of pallet cores to satisfy their sales needs.
High volume sources are found at businesses where many pallets of an unloaded product like an inbound ingredient or component pallets at production plants or at distribution centers where pallets are emptied as goods are shipped. Other large generation points include large shops, ports, cruise liner terminals, trucking terminals, air freight forwarders, and landfills.
Low volume sources of cores also can be important to larger volume recycling operations. the tiny quantities of pallet cores come from smaller shops, restaurants, hotels, institutions, construction sites, and other sources. Typically, however, recycling businesses won’t retrieve these pallets themselves but will believe pallet street vendors to accumulate these in small truckload quantities and sell them to the recycler. In aggregate, handling street vendors can generate much-needed pallet core volumes.
When buying scrap pallets, the recycler should take steps to limit their risk of buying stolen pallets. To manage this exposure, many recycling companies, including pallet recyclers, record the road vendor or collector’s driver’s permit information and pay by check. Such procedures are a recommended best practice by some associations like ISRI and a legal requirement in some jurisdictions. Also, pallet recyclers typically refuse to shop for pallets with proprietary markings like rental pool pallets.
Managing High Volume Core Sources
The first order of business is gaining contacts within the operation. the choice maker with reference to pallet core sales varies widely from location to location. Where in one plant it’s going to be the overall manager, it’s going to be a shipping supervisor at another location. Many operations solicit bids from pallet companies for their cores.
There has also been an increasing swing towards a national dock sweep contract for pallets in the least of a company’s locations. This simplifies the pallet management process for companies, removing one headache from the plate of busy site managers. However, it does hamper the pliability of branch locations to maneuver their business to whom they perceive to be the simplest service provider, locally. A national program does leave better corporate controls. Often, the national providers offer online tracking which provides better visibility into the movement of pallet cores to recyclers.
While most core generators have existing relationships in situ, by becoming introduced to them, you’ll be more likely to be included in future bids, or perhaps offered cores on short notice if for a few reasons the prevailing core buyer cannot remove them.
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Looking for Opportunities Beyond 48×40-Inch
While the bulk of pallet recycling in North America focuses on the 48×40-inch pallet, it’s important to remember recycling opportunities for other sizes. The acquisition of pallets with boards longer than 40 inches are often disassembled and crop to 40 inches. Additionally, by performing a free audit of pallet cores for the code generator, it’s going to be obvious that there are accumulations of other specific sizes that hold little value, except for the initial shipper. By tracing these back to the shipper, it’s going to be possible to rearrange the refurbishment and resale of those pallets back thereto business.