01
Optimising price per pallet
The cheapest pallet makes the fewest trips. One distributor raised price per pallet 23% and cut annual spend 34%.
FixReport cost per trip. It survives contact with a CFO and it responds to management action.
01What a programme includes
- Fixed unit pricing for a defined term, by grade and size.
- Scheduled supply against a release forecast, so nothing runs out.
- Scheduled collection of empties and damaged stock on the same routes.
- Repair-first policy — damaged pallets are repaired unless dismantling is genuinely cheaper.
- Loss tracking — counts in and out, with a quarterly variance report.
- Diversion reporting — tonnage, outcome split, CO₂e avoided.
- Named coordinator who knows your site rather than a ticket queue.
- Quarterly review against cost per trip, not price per pallet.
02Cost per trip: the only number worth optimising
Buying the cheapest pallet available almost always raises total cost, because the cheapest pallet makes the fewest trips. The arithmetic below is from a real mid-sized food distributor, anonymised.
| Measure | Before programme | After 12 months |
|---|---|---|
| Price per pallet | $10.40 | $12.75 |
| Average trips per pallet | 4.6 | 9.8 |
| Repair spend per pallet | $0.00 | $1.85 |
| Loss rate | 17% | 6% |
| Cost per trip | $2.72 | $1.79 |
| Annual pallet spend | $412,000 | $291,000 |
03How a programme starts
- Baseline. Two weeks of counting: what comes in, what goes out, what breaks, what disappears. Almost nobody has this data before we ask for it.
- Specification. Grade and size matched to actual application, not to habit.
- Route design. Supply and collection combined onto the same lanes wherever geography allows.
- Pricing. Fixed for the term, with a stated mechanism for lumber movements beyond an agreed band.
- Pilot. One site or one lane for a quarter. Measured, reviewed, then extended.
“The baseline count was the uncomfortable part. We thought we were losing maybe five percent. It was seventeen. Everything after that was easy because nobody could argue with the number.”
By the numbers
The figures worth remembering
Four numbers that decide most of what follows on this page.
- Typical first-year cost reduction
- 18–30%Typical first-year cost reduction
- Annual pallet movements where a programme starts paying
- 5,000Annual pallet movements where a programme starts paying
- Baseline count before anything else
- 2 weeksBaseline count before anything else
- Standard term with a stated price mechanism
- 12 monthsStandard term with a stated price mechanism
Rules of thumb
Carry these in your head
- 01Cost per trip is the only pallet metric worth reporting.
- 02Loss rate is the largest hidden cost in most operations.
- 03Repair-first moves average fleet life from 5–7 trips to 10 or more.
- 04Pallets belong to nobody in most org charts. That ownership gap is the whole problem.
Before you order
The decisions we will ask you to make
A quote turnaround is limited by how many follow-up questions we have to ask. Working through this list removes nearly all of them.
- 01
Do the baseline count
Two weeks: in, out, scrapped, on hand. The gap is your loss, and almost nobody has this number.
- 02
Decide who owns the assets
Your pallets managed by us, or our pool charged per trip. The first suits stable loops, the second variable demand.
- 03
Set the metric
Cost per trip, not price per pallet. They frequently move in opposite directions.
- 04
Agree the price mechanism
Fixed for the term with a stated adjustment if the lumber index leaves an agreed band. Write the band in.
- 05
Pilot one site or lane
A quarter, measured, reviewed, then extended.
- 06
Define the reporting
Units, repair volume, loss variance, cost per trip, tonnage diverted, CO₂e avoided.
What goes wrong
Expensive mistakes, and the fix for each
Every one of these turns up in ordinary purchase orders. All of them cost multiples of whatever they appeared to save.
02
Guessing the loss rate
Guesses cluster at 4–6%. Measured figures frequently land at 12–20%.
FixCount for two weeks. It is the highest-return fortnight available to most operations.
03
Skipping the pilot
A network-wide change on unmeasured assumptions is how programmes get cancelled in month five.
FixOne lane, one quarter, measured against the baseline.
Side by side
A real twelve-month result
| Measure | Before | After 12 months | Direction |
|---|---|---|---|
| Price per pallet | $10.40 | $12.75 | Worse |
| Average trips per pallet | 4.6 | 9.8 | Better |
| Repair spend per pallet | $0.00 | $1.85 | Worse |
| Loss rate | 17% | 6% | Better |
| Cost per trip | $2.72 | $1.79 | 34% better |
| Annual pallet spend | $412,000 | $291,000 | $121,000 saved |
Against our interest
When this is the wrong answer
We would rather lose the order than sell you the wrong thing. These are the situations where this page is not what you need.
- 01
Operations under roughly 5,000 pallet movements a year
The reporting and route economics do not pay for themselves at that scale. Scheduled supply and collection without the programme overhead captures most of the benefit.
- 02
Anyone unwilling to do the baseline count
Without a measured loss rate the programme is optimising numbers nobody trusts. The count is two weeks and it is not optional.
- 03
Buyers who will still be judged on price per pallet
A programme that raises unit price and cuts annual spend by a third looks like a failure on the wrong metric. Fix the metric first.
What moves the price
Cost drivers, and roughly how much each one is worth
A quote is not a list price with a discount applied. It is these variables added up, which is why two quotes for nominally the same thing can differ so widely.
| Driver | What it is | Rough effect |
|---|---|---|
| Fleet ownership model | Your assets managed by us, or our pool charged per trip. | Balance sheet against unit rate |
| Loss rate | The largest hidden cost in most operations, and the one most responsive to management attention. | $40,800/yr at 17% on a 20,000 fleet |
| Repair ratio | How much of the fleet is repaired rather than replaced. | Nearly halves annual purchase requirement |
| Route consolidation | Supply and collection combined onto the same lanes. | 15–30% of freight |
Due diligence
Questions to ask any supplier
Us included. The answers tell you a great deal, and so does how quickly they arrive — a yard that has these documents ready is a yard that has thought about them.
- 01
“What does the baseline count involve, and who does the counting?”
- 02
“How is cost per trip calculated, and what is in it?”
- 03
“What is the price adjustment mechanism, and where is the band written?”
- 04
“What does the quarterly report contain, and can I see a redacted example?”
- 05
“Which site or lane would you pilot, and over what period?”
- 06
“Who is my named coordinator, and what happens when they are away?”
The rulebook
Standards and authorities that actually apply
Plenty of pallet marketing invokes standards loosely. These are the real documents behind this subject, and what each one does and does not cover.
- Cost per trip
Not an external standard — an internal metric. Total pallet spend, including repair and loss, divided by pallet movements supported.
The only pallet figure worth reporting upward.
- GRI 306 (Waste)
Where the diversion half of a programme's reporting usually lands in a corporate disclosure.
- UCC Article 2
Governs the supply agreement itself, including inspection, rejection and remedy.
- Your own asset register
If pallets are your assets, they belong somewhere in the fixed or consumable accounting. In most org charts they belong nowhere, which is the root problem.
Vocabulary
The terms used on this page
Defined the way the trade uses them, not the way a dictionary would.
- Pooling
- A rental model where a third party owns the pallets and charges per trip. CHEP, PECO and iGPS are the major North American pools.
- Core
- An as-collected used pallet — unsorted, unrepaired and ungraded. Raw material rather than a product, and priced accordingly.
- Grade A
- Our top recycled tier: no companion stringers, two or fewer replaced deck boards, one plug maximum, squareness within 0.5 inch.
- Racked load
- The weight a pallet carries spanning two rack beams with nothing beneath the centre. Always the lowest of the three load ratings.
From the journal
Longer reading on this subject
Written by the people who grade, repair and haul the wood — including the articles that argue against buying from us.
Operations6 min readDana Whitfield
The pallet count nobody in your building has ever done
It requires nobody's permission, no software and no capital. It usually produces the largest single saving available to the operation, and it is almost never done.
Read
- measurement
- management
- loss
Operations8 min readDana Whitfield
Cost per trip: the only pallet metric worth reporting
A food distributor raised their price per pallet by 23% and cut their annual pallet spend by 34%. Both numbers are true, and only one of them is worth reporting.
Read
- cost
- management
- metrics
Logistics6 min readTom Okafor
Backhaul pairing: how empty miles set your pallet price
The cheapest mile in trucking is the one that was going to be driven anyway. Most pallet buyers are sitting next to one and have never mentioned it.
Read
- freight
- routes
- cost
Questions
Answers to what buyers actually ask
Straight answers, including the ones that cost us the sale.
What size operation justifies a management programme?
Roughly 5,000 pallet movements a year is where the reporting and route economics start paying for themselves. Below that, scheduled supply and collection without the full programme overhead usually captures most of the benefit.
Do you take over ownership of our pallets?
That is your choice. Some programmes run on your assets with us managing them; others run on our pool with a per-trip charge. The first suits stable closed loops; the second suits variable demand and removes capital from your balance sheet.
How is pricing protected against lumber volatility?
Fixed for the term, with a stated adjustment mechanism if the underlying lumber index moves outside an agreed band. The band is written into the agreement rather than left to a conversation later.
What does the quarterly report actually contain?
Units supplied and collected, repair volume and cost, loss variance, cost per trip trend, tonnage diverted and estimated CO₂e avoided, plus the recommendations we think follow from those numbers. It is designed to be forwarded to a CFO without translation.
How long does it take to set up a management programme?
Four to eight weeks, most of it measurement rather than paperwork. We count what you actually consume and generate, which is almost never what the purchase orders suggest, then set release schedules, collection frequency and repair routing against the real numbers.