01The arithmetic everyone starts with
Take a $13 recycled wood pallet averaging 7 trips against a $110 rackable HDPE pallet averaging 80 trips.
- Wood: $13 ÷ 7 = $1.86 per trip
- Plastic: $110 ÷ 80 = $1.38 per trip
- Plastic wins by 26%. Sign here.
This is the calculation in essentially every plastic pallet proposal I have been shown, and there is nothing wrong with the arithmetic. The problem is the 80.
02Where the 80 goes
Eighty trips is a durability figure. It describes how long the pallet lasts if nothing else happens to it. It is not a prediction of how many trips your pallet will complete, because pallets do not usually die of old age. They disappear.
On a fleet turning six times a year with a 10% annual loss rate, the average pallet survives about seven years of ownership in aggregate terms — but the arithmetic that matters is simpler than that. Model it directly: of a thousand pallets bought today, 10% are gone in year one, 10% of the remainder in year two, and so on. The average number of trips actually completed lands nearer 42 than 80.
| Annual loss rate | Effective trips | Cost per trip | vs wood at $1.86 |
|---|---|---|---|
| 0% | 80 | $1.38 | Plastic wins |
| 5% | 58 | $1.90 | Line ball |
| 10% | 42 | $2.62 | Wood wins |
| 15% | 33 | $3.33 | Wood wins clearly |
| 20% | 27 | $4.07 | Wood wins decisively |
03Why loss rates are so high
- Third-party carriers. A pallet on someone else's truck is outside your control from the moment the doors close.
- Customer sites. Receivers do not usually distinguish your $110 asset from a $13 one. It goes on the pile.
- Multiple internal sites. Inter-site loss is rarely measured and frequently large.
- Attractiveness. Plastic pallets are visibly worth something, and things that are visibly worth something move.
- No return mechanism. If nobody is responsible for getting them back, they do not come back.
04When plastic is right anyway
None of the above applies where the decision is not economic. If your process requires wash-down between loads, wood is not a cheaper option, it is not an option. The same is true in sterile pharmaceutical space, USDA-inspected open-food-contact areas and cleanrooms where particulate shedding is controlled.
There is also a genuine economic case in tightly controlled closed loops: own vehicles, own sites, own staff, and a return mechanism somebody owns. Those operations do achieve trip counts close to the durability figure, and for them plastic is straightforwardly cheaper.
The failure mode is applying closed-loop arithmetic to an open-loop operation. The full comparison, including the carbon side, is in wood vs plastic pallets.
05A better sequence
- Measure your current loss rate. Two weeks of counting.
- Fix the loss rate first, if it is above about 8%. Control mechanisms are cheaper than pallets.
- Pilot on one controlled lane, not the whole fleet.
- Measure the pilot's actual return rate over two quarters.
- Only then decide, using the number the pilot produced rather than the moulder's durability figure.
Operations that follow that sequence sometimes end up buying plastic and sometimes discover that fixing the loss rate solved the problem they were trying to solve with capital.
