Australia's two major pallet suppliers say Australia is not replicating the U.S. wood vs. plastic debate.
Melbourne-based Loscam Ltd.'s marketing general manager, David Edwards, estimates wooden pallets account for 97 percent of Australia's total pooled pallet market, while plastic pallets are less than 1 percent. Metal pallets account for the rest.
Loscam, based in the Melbourne suburb of Box Hill, primarily supplies wooden pallets in Australia and Asia. The firm has 30 percent of the Australian pooled pallet market; its main competitor, Sydney-based Brambles Ltd., has 70 percent. But Loscam's share in the grocery and retail sector is almost equal to Brambles, Edwards said.
Brambles and its pallet and container pool subsidiary, Chep, operate in 47 countries, and own nearly 300 million timber and plastic pallets and plastic transport containers.
“For most Australian customers, the wooden pallet meets their needs in terms of cost effectiveness, durability and sustainability,” said Brambles spokesman James Hall.
Brambles is introducing plastic pallets and containers in Asia, Europe and Australia and acquiring other businesses to grow market share. In March it acquired Munich-based Ifco Systems NV, which operates a pool of reusable plastic containers for fresh-produce supply chains and owns a wood-pallet recycling business.
In February, Brambles bought Container and Pooling Solutions Inc. of Livonia, Mich., which supplies bulk containers for automotive, food and beverage and other uses. CAPS and Ifco reflect Brambles' business strategy of expanding into a broader range of equipment pooling options, Hall said.
Last year Brambles and competitor Intelligent Global Pooling Systems Co. LLC in Orlando, Fla., engaged in a pallet war via the media.
Brambles claimed that deca-bromine, a fire retardant in plastic pallets like the ones in IGPS' pool, caused cancer. IGPS said wood pallets harbored food-poisoning bacteria. Tension has been growing between the firms since IGPS began winning U.S. customers from Chep.
Edwards and Hall say, however, there is no such debate in Australia. Edwards said quality and cleanliness of Australia's pallet pool is high, so no one sees a need for perceived cleaner plastic pallets.
“Loscam feels there is no debate to be won. Each pallet has its own utility for specific needs,” he said.
Hall said it is a case of finding the right solution for a particular need. “Chep is the provider of choice for either form,” he said.
“We are not seeing a trend to or from plastic pallets,” Edwards said. “Plastic pallets command higher rental rates, based on the purchase price, and customers prefer more economically priced wooden pallets, unless specific need warrants the extra cost.”
Australia's shift to retail-ready packaging, or RRP, in supermarkets is not threatening wooden pallets' future, he added. RRP allows supermarkets to display goods in the same containers in which they are transported from warehouses. Edwards said plastic pallets have always been used for specific needs, like food processing, pharmaceuticals and clean-room electrics.
RRP for fresh food has been well-entrenched among Australia's retailers for years, but is expanding in grocery categories like beverages, he said.