Pallets and the Power of the Cube
Space, as the original Star Trek series noted, is the final frontier. And space can be a vexing constraint for supply chain professionals at every stage of physical distribution. Operators must make the most of space in the warehouse and space in transport. The same concern holds true for space in the manufacturing plant or in retail.
The rise of ecommerce has driven the need for more warehouses, located closer to customers, to facilitate rapid delivery. Warehouses are also cramped because of a very tight commercial real estate market that has exacerbated the shortage of warehouse space in the United States and Canada. For example, in Buffalo, New York the vacancy rate for industrial space locally is just over 2%, compared to 6% in 2013 and 9% in 2012.
The bottom line is that warehouse operators need to fit more inventory into existing facilities to increase their use of space, or what is referred to as cube utilization.
What is cube utilization?
Cube utilization is an industry term that refers to the amount of the total available space that is utilized in a vehicle or facility, expressed as a percentage. When the available space is filled completely with product, the cube utilization is 100%.
Industry insiders refer to this as being “cubed out.” This term is popularly used to describe a trailer when no more product can fit in it. There are related terms such as cube optimization, cube efficiency and cube maximization. It all comes down to making the most of the space you have.
Pallets and cube utilization – almost a 100 year relationship
The relationship between wood pallets and cube is complicated, but it is one that has been mutually beneficial. Starting in the 1920s, early forklifts (known as tiering trucks) began to double-stack loads of palletized merchandise to improve storage in manufacturing facilities.
The development of the bottom deck on skids in the 1930s was in response to the need to stack merchandise atop other loads. The result was the invention of the pallet.
The saga of pallets and cube utilization continued into the 1940s. Early in the WW2 palletization effort, the Eastern Quartermaster depots of the U.S. Army were highly resistant to palletized loading for overseas shipments to Europe.
Were they just change-averse? Or was concern about cube loss the reason palletization never initially got off the ground? Not surprisingly, when pallets were designed with a lower profile later during the war, acceptance followed.
The Second World War also saw the birth of the 4-way pallet, an innovation that allowed forklift drivers the flexibility to load product more compactly in the holds of ships.
Pallets and cube utilization – today and tomorrow
There are several ways that wood pallets help improve cube efficiency. Two obvious examples are stacking and racking. The use of pallets helps facilitate the vertical stacking of unit loads. Likewise, pallets can be racked in conventional racks or automated storage systems that help improve cube utilization.
There are other ways that pallets can help you make the most of your facility. Consider that unloading palletized products will often require considerably less dock space than floor loaded goods that must be manually handled upon arrival. Because loading and unloading palletized goods are much quicker than for unpalletized items, fewer dock doors and dock space will be required to handle the same throughput.
Pallet dimensions must also be considered in cube utilization. The pallet footprint can make a difference in optimizing the amount of floor space utilized in a transport vehicle. For example, the use of 20 48”x40” pallets in a 40’ ISO container would result in just 3.7% wasted space.
Then there is pallet height to consider. Even lowering the standard pallet by one inch might allow for an extra layer of product on a pallet to be shipped, which would potentially result in huge efficiency gains. A systems approach is required and would require coordination with pallet handling equipment. Standard pallet jacks would have to be modified.
There are many aspects that go into cube utilization, from maximizing the product density within containers, to choosing the optimal pallet pattern, to selecting the palletized storage system that best meets your needs. There is a lot at play, but pallets remain at the heart of the cube utilization equation. That is the power of the cube.