06-05-13 Breaking News: Pallet Pooling Opportunity in Postwar U.S.A. (By Rick LeBlanc)

As promised, this instalment looks at the conversation around pallet pooling as the end of World War 11 came into sight. The author, Matthew W. Potts, was a leading writer about materials handling for many years. He acted as the Materials Handling Coordinator for the Office of the Quartermaster General of the U.S. Army, and was extremely influential in establishing the use of pallet handling systems in Army warehouses both domestically and abroad. This was one of several important pieces he wrote as materials handling editor of D and W magazine, a distribution and warehousing trade publication.

It is perhaps noteworthy from a historical perspective that his vision of pooling centered on local, autonomous service providers, which characterized his reading audience of warehousemen across the country, versus a national pooling concept. In most any pooling organization there is a need to balance between attentive, possibly customized customer services required at a local level, versus optimisation requirements of the overall network. The focus of this piece is clearly on the former.

Pallet Pools Offer Public Warehouses New Service Opportunities

D and W, January, 1945

After the war, between one and three million surplus pallets may be disposed of by the government. Commercial shipments of palletized unit loads are expected to become common. Some pooling method for collecting pallets and re-distributing them to industry is likely to be developed. The logical organization to provide this service is the public warehouse. It has the necessary transportation, packing and storage facilities. Now is the time for public warehousemen to prepare to secure this profitable business.

By MATTHEW W. POTTS
Materials Handling Editor

In February, 1941, the writer addressed the 50th annual meeting of the American Warehouseman’s Assn., and discussed materials handling, particularly the matter of pallets. It was suggested that warehousemen get together and develop a standard pallet size most suitable for the commercial warehouse field, and that they prepare for the handling and storage of palletized unit loads.

Apparently, nothing was done to follow up this suggestion. When the impact of war struck in December, 1941, the armed services became the greatest warehouse operation in the world.

Army Developments

The first group to take the initial step in warehouse handling and storage methods was the Office of The Quartermaster General, Field Operations Branch of the Storage Division. The preliminary work of establishing methods, for the most part, was under the direction of men who were not familiar with the details of materials handling methods, and they had to depend upon the advice of equipment manufacturers, which, in many cases, was not always of an unbiased nature.

They were faced also with the responsibility of getting methods and equipment into operation so as to sustain quick results. One manufacturer was able to make quantity deliveries of a fork truck with a load capacity of 2000 lb. Consequently, the system was predicated on this particular truck, with the result that the pallet of the Quartermaster Corps was made to fit that truck load capacity. Hence, we have a standard Quartermaster pallet which is 32 in. long and 40 in. wide. A million or more of these were procured within a year, and placed in service throughout the country, and additional millions have been procured since then.

Since the Quartermaster at that time operated all of the General Depots, the 32 x 40 in. pallet was used by the Engineers, Ordnance, Signal Corps, and other service branches, and the Quartermaster also procured for those branches pallets of 36 x 50 in., 42 x48 in., 48 x 48 in., 42 x 72 in., and 42 x 56 in. These larger pallets were for use with fork trucks with capacities from 4000 lb. to 10,000 lb.

As the manufacturers of fork trucks increased their production, the Quartermaster General procured the larger trucks for all services, and the use of larger pallets than the Quartermaster’s standard 32 x 40 in. became more common.

The Navy, through the Bureau of Supplies and Accounts, started its materials handling program in 1942. By the time it was ready to procure fork trucks, the manufacturers were in quantity production, so the Navy bought very few 2000 lb. fork trucks and obtained more of the larger type, even 15,000 lb. units. For this reason, it standardized on the 48 x48 in. pallet for inter-depot and overseas shipment, and the intra-depot movements on the 42 x 66 in. pallet.

Here again, they procured, not thousands, but millions of these pallets which are distributed throughout all the states of the union, and to many of the advance bases, to Australia, India, Iceland and Europe. We hope we’ll soon be shipping palletized unit loads into Japan itself.

Postwar Surplus Pallets

However, because of this large use of pallets by the various branches of the armed services, there will come a time when they will not be required for the storing of supplies, and they will be classed as “surplus materials for disposal” with the result that possibly somewhere between one million and three million pallets will be disposed of by the government. The largest volume will be in the 32 x 40 in., 48 x 48 in. and the 42 x 56 in. sizes. It is logical to assume that the 42 x 66 in. sizes will be picked up by stevedoring companies for use in marine terminals, etc.

These will be for storage purposes, but the other pallet sizes, no doubt, will be used for palletized unit load shipments by many manufacturers who are no learning the value of this method of shipment.

“Single Shippers”

Before the armed services procured so many pallets, industry had been thinking along the line of building pallets of light cheap construction to be called “single shippers,” that is, they would carry one load and then be discarded as scrap lumber. Of course, it is better to have a good pallet, and use it over and over again, not only for inter-plant shipment, but also for handling several operations within the plant.

If the government surplus in pallets amounted only to a few hundred thousand they would be quickly bought up by industrial plants for use within their own plant areas, but since the quantity that will be surplus material, is large, and the price should be low, it is logical to assume that the cheap “single shipper” type of pallet will not be developed. Instead, industry is likely to absorb the surplus pallets.

Pallet Pools

If the more expensive and well-built pallets are used it will not be economical to scrap them. Consequently, it will be necessary to develop some pooling method so that these pallets can be collected in certain areas for re-distribution to industry as needed.

This will require an organization equipped with trucking facilities to pick up the pallets or deliver them, as required, and also with the necessary equipment for repairing and maintaining the pallets, with sufficient storage space to carry a large quantity for immediate demand requirements.

Warehousemen’s Opportunity

The logical organization to provide this service is a public warehouse. Both merchandise and household goods warehouses are equipped with packing departments, and after the war should have the available labor and machinery for maintenance and repair of pallets. They have the necessary transportation facilities, and are known in their local communities.

In the past, warehouses have supplied packing cases for their own use and the use of others, and the same is true regarding barrels for packing. These were not always new, but quite frequently were used items that had been sold more than once. The warehousing industry probably cannot act as a unit in connection with this pallet pool idea. In all likelihood, it will be more feasible for individual operators in selected areas, where the demand for pallets will be greatest, to go to work on it separately.

For this reason, the warehouseman should become conversant with the types and sizes of pallets that are available, and know their best use for a wide variety of operations.

This important subject of pallets and palletized unit load shipments has been covered by DandW in a number of articles in the past three years. We will continue to present fresh aspects of it in the future. How soon the government will offer surplus pallets for sale is not known. How they will be disposed of has not as yet been planned.

However, this should not prevent any progressive warehouseman from giving it consideration and getting prepared to take advantage of the opportunity when it is presented.

Suggested Surveys

It might be well to start an initial survey in certain localities to find out what sizes can be used, the quantities that may be required, the potential number of outlets in a given area, etc., rather than to wait until the pallets are offered, and then try to acquire the information while someone else is acquiring the pallets.

More than ever, warehousemen are going to require pallets for storing and shipping commodities. Public warehouses are natural and established centers of distribution in the areas they serve. Most warehousemen are familiar with the railroads, trucking companies and industrial plants within their areas, and should be able to secure the necessary information to determine whether or not they should become the “pallet pool” centers in their respective regions.

Pallet pool operations should prove profitable and another source of revenue for the warehousing industry in the postwar period. It’s worth investigating now.