What Is the True Cost of a Crappy Pallet?

Sometimes companies fail to assess the true cost of the equipment and supplies provided to employees. They look at price per unit, or some other measure of direct cost, but often fail to account for or anticipate ancillary expenses associated with an item. And the true cost may be much more than they often think.

My next-door neighbor is a local distributor for a high-end coffee manufacturer. Using his garage as a warehouse, he supplies some 77 Publix Supermarkets with his merchandise. Needless to say, he moves a tremendous amount of product. He also generously keeps some of his neighbors amply stocked with perfectly fine high-end coffee that has simply passed its 90 day sell-by date. But, of course, that is not the point.

He gets his coffee deliveries once or twice a week. He called me Wednesday to ask a favor regarding one of those deliveries. He had a store that was out of product and urgently needed help, his wife was out of town, and a delivery truck with 8 full pallets of coffee was due that afternoon. He asked if I would mind meeting the driver and signing for the order. I told him, magnanimous neighbor that I am, that I’d be happy to. 

The truck arrived right on time, around 4:30 that afternoon. I watched as the driver deftly rolled one pallet at a time out of the truck, on to the liftgate and then up the driveway into my neighbors garage. It represented some real physical effort. The pallet stacks were about 5 ½ feet high, loaded with hundreds of boxes of coffee. Most of the pallets came off the truck without an issue. 

Two of them did not.

Those specific pallets had been damaged somewhere in transit or had simply reached the end of a useful life. One had partially lost a piece of wood underneath, with one end still stubbornly attached to the pallet. The wood was dragging on the ground and jamming the wheel of the pallet jack the driver used to maneuver it. For the second problem child, the pallet had completely collapsed on one side, which made both lifting and maneuvering the load problematic.

Looking at the pallets, you could see they were very utilitarian, made of low-grade lumber, nails and staples. I immediately thought of the famous quote attributed to Astronaut Alan Shepard, discussing his thoughts as he launched into space on top of the Mercury-Redstone 3 rocket. As he thundered into space, he couldn’t help but think that virtually every part of the massive rocket he was riding was “made by the lowest bidder.” Not exactly a comforting thought. And it looked like the pallets before me followed that economic model.

The driver really struggled with those two defective pallets. He had to bend, stoop, kick, push, pull, and tug with impressive force to clear the hurdles and make those boxes move. In the case of the partially collapsed pallet, the entire wrapped load of coffee leaned precariously to one side. It could have easily tumbled off the liftgate, taking the driver with it. According to the driver, this was not an uncommon occurrence. He blamed “the boys in the warehouse” for carelessly handling the stacks. I am more inclined to think the pallets, which are gathered and continually reused, were poorly constructed and had lived beyond their useful life. As I watched him truly struggle to move these heavy loads into position, it was apparent that he could easily be hurt in this process, and that the cost of that pallet would be much more than the sum of its parts if that were to occur.

A spinal injury from handling an improper or damaged load could run in the hundreds of thousands of dollars, or more. That would far exceed the pennies saved by purchasing poorly made equipment. That lesson transverses all industries and business functions; it is not a problem limited to poorly constructed wooden slabs. For employers, making sure that employees have decent equipment and supplies is essential for maintaining a safe workplace, and the cost of saving a few pennies can be exorbitant indeed. Ultimately, the true cost of a crappy pallet may be more than anybody wants to bear. 

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