Pallet handling the challenging exchanged deal
The pallet exchange between freight operators and shippers is often a fundamental part of transport orders. Nevertheless, this concept is increasingly unpopular, because the exchange process of the wooden loading aids can result in massive costs on the part of the forwarder and logistics service provider. sennder deals extensively with this issue and puts together the most important facts about the exchange of loading equipment for you.
How does the exchange work?
Methods can be distinguished in two main exchange processes:
- The Cologne Process
The pallets are exchanged "step by step", i.e., in the case of loading, the transport companies must bring empty pallets to the shipper, in order to balance out the missing pallets that are missing due to the loading. In the case of discharge, the carrier will once again receive empty pallets, which the target company can give away safely through the receipt of palletised goods.
2. The Bonn Process
In the case of the Bonn process, the carrier commits himself to the return of the pallets. He does not bring empty pallets to the loading, but only transfers the palletized goods and must return the empty pallets to the loading point after discharge.
For which exchange process the forwarding agent decides, depends on the situation and is individually agreed between the shipper and the carrier.
Why is the pallet exchange disliked?
Many forwarding agents do not see the pallet exchange as up-to-date as high cost and effort are associated with it. These include:
- Administrative burden
In some cases, pallets are situationally not exchanged during loading or unloading, or the grades of exchanged palettes are different. As a result, pallet accounts must be led to document pallet balances or liabilities as well as different grades of pallets.
- Transport costs
Especially in the Bonn process, the received empty pallets must be brought back to the loading location, which means additional transport costs.
- Theft and repairs
The carrier shall be liable for theft and damage to the loading equipment, which represents a potential cost driver. Moreover, it may be that the grades of the palettes are different so that the carrier receives poorer-quality pallets during the exchange than the ones he has actually brought for loading.
Often, the fundamental rejection of orders with pallet exchange is part of the terms and conditions of a logistics company, to avoid the aforementioned consequences.
The alternatives to pallet exchange
The increasingly loud demands for a withdrawal from the exchange deal on the part of the traffic companies creates incentives for the development of alternative models of pallet handling.
Among a possible alternative to the exchange is the resale of the pallets. Instead of looking at the pallet exchange as part of the service package of the carrier, who ultimately bears expenses and costs, the loading aids shall be sold directly as a so-called "outer carton" of the goods to be transported. Thus, the buyer of the goods will at the same time become the owner of the pallets and the carrier benefits from clarified ownership structures and reduced administrative burden.
Furthermore, there are a range of pallet exchanges, such as for instance the Frankfurt-based start-up Swoplo, which administers pallet accounts for companies. Companies have the nationwide opportunity to indicate their pallet balance or liabilities on the online platform. Through the transparency of all the accounts on the platform, shippers can compensate for the balances and liabilities among each other, if, for example, they have respectively balances or liabilities at the same location. If the supplier of the company A has pallet liabilities, then company A can propose an exchange with the pallet balance to another company B. Instead of the having to physically return the empties by a transport company, company A directly exchanges with company B at a location. Automatically cost-effective prices on the exchange are determined. Swoplo was able to convince a large number of freight forwarding companies with its business model.
We at sennder GmbH see sloppy pallet management as a major risk factor for freight forwarders. By automating the establishment and management of pallet accounts, we are a reliable partner for a transparent handling of pallets. Clear agreements about the rights and obligations of the carrier apply as a prerequisite for a long-term cooperation with us. Thus, we cater for the exchange business by our proactive pallet management and can assist you with professional competent advice.