Pallet Tracking: Then and Now

Pallet tracking has evolved tremendously over the last 40 years, and it continues to transform with the adoption of new technologies. Before we begin the discussion, let’s review this deceptively ambiguous term and provide some clarification.

What is Wood Pallet Tracking?

Many pallet users talk about pallet tracking in the sense of unit load tracking. They are most concerned with the materials stacked on the pallet and ensuring that those goods reach the consignee as prescribed. In this sense, pallet tracking is a component of inventory management and product quality assurance.

Within the pallet industry, or for pallet users responsible for managing pallets as corporate assets, pallet tracking pertains to the management of the pallet itself. Pallet tracking enables pallet users to track pallet movements to other stakeholders and thereby mitigate the loss of the pallet as an asset.

Pallet tracking can help facilitate pallet return in a returnable pallet system. It can also be used to report customer shipments to a third-party pallet provider, such as a pallet rental company.

At risk of further confusion, some pallet insiders use pallet tracking as a synonym for pallet management. In contrast, others use it in a narrower context, as the shipment and return information that is manually or digitally captured into the pallet management software. For the purposes of this article, we’ll speak about pallet tracking and pallet management interchangeably.

Why is Pallet Tracking Important?

Pallet tracking can help keep reusable pallets on the job versus accumulating excessively at trading partners, becoming lost or otherwise underutilized. When managed effectively, pallets provide a lower cost per trip through repeated reuse, while reducing the need to manufacture new pallets enhances sustainability.

Poor pallet tracking can eventually lead to failed reusable pallet systems and significant financial loss. More importantly, inadequate pallet management can result in shipment disruptions if usable wood pallets are not available during production. Customer dissatisfaction downstream in the supply chain can result from subsequent delayed deliveries or deliveries on inferior quality pallets, so do not underestimate the importance of pallet management.

Wood Pallet Tracking-Then

Pallet tracking is not what it used to be. Back in the early 1980s, before PCs became commonly deployed, keeping track of pallets was a manual and uncelebrated task, often one assigned to a junior employee.

It was a time of ledgers and 3-ring binders used to record the pallet “ins” and “outs” with various trading partners. The pallet documentation used by multiple shippers could be diverse, accumulating each day into an unwieldy stack of papers to be processed. Accurate data entry could require considerable training and experience for the clerk to interpret, depending upon the complexity of the supply chain.

From those records, the pallet manager could initiate the return of pallets owed to various manufacturers, for example, or approve payments for pallets that had arrived under load and that had been invoiced. But it could get complicated. Did the invoiced pallets meet the required specification? Had the carrier taken back exchange pallets? If either of those outcomes took place, the pallet manager might reject the invoice, leading to a dispute.

Especially in the grocery industry, it was a time of generally haphazard pallet management and ongoing issues regarding pallets owed to trading partners and pallet quality. Ultimately, several leading grocery retailers in North America abandoned the pallet exchange model because of such frustrations.

Wood Pallet Tracking-Now

The paper trail and manual entry of 40 years ago gradually evolved to ledgers and databases residing on PCs and ultimately to the cloud. Manual entry evolved to various forms of automated data capture, such as estimating the number of pallets shipped based on the amount required to send a particular number of cases.

Over time we have seen a transition from batch tracking of wood pallets moving through the supply chain (such as a shipment of 30 standard 48×40 wood pallets under load), to now being able to track each wood pallet with a unique identifier.

Unique identification can help provide more precise details regarding pallet repair history or loss. For instance, if pallets are not returned the pallet manager can review their history to see where they were last shipped and identify potential leakage points. Unique ID has been made possible through innovations such as barcode and RFID. More recently, other IoT technologies have continued to improve the accuracy of tracking and provide real-time visibility of pallet locations.

Today’s leading pallet tracking solutions are easy to use. They offer operational, financial, and in some cases, environmental reporting capabilities and dashboards easily customized to meet customer needs. Some systems feature reconciliation features to help quickly identify and resolve discrepancies between trading partners. Some solutions interface with transportation providers to initiate pallet movement requests. Many tracking systems are cloud-based and sync with mobile devices carried by delivery drivers, asset managers, and other personnel working in the supply chain.

As the desire for real-time visibility and data management increases, we are seeing a shift in interest from barcode and RFID (Radio Frequency IDentification) data capture to other solutions such as GPS (Global Positioning Systems), cellular, LPWAN (Low Power-Wide Area Network), BLE (Bluetooth Low Energy). From a pure pallet management perspective, the solution’s cost can still be a barrier to acceptance, depending upon the use case.

For this reason, we see pallet managers taking various approaches to mitigate cost, such as using lower-cost LPWAN or, alternately, tagging only some pallets versus all of them to provide visibility of pallet flows. Even some tagged pallets can help the pallet manager understand where lost pallets are going.

Another option for reducing cost is through employing a hub and spoke strategy, where proximate pallets might communicate through BLE, for example, to a hub pallet that communicates by cellular or GPS to the cloud-based tracking system.

Increased visibility eliminates guesswork and allows supply chain operators to make more informed decisions. The overall value of unit load visibility is a topic for another blog, but in many cases, it will transcend the pallet management use case.

For an increasing amount of reusable pallet programs, that value is anticipated to tip the scales in favor of IoT adoption. Pallet tracking continues to evolve, and it plays an increasingly integrated role in supporting supply chain operations