Issue link: http://palletcentral.uberflip.com/i/1311385
30 PalletCentral • November-December 2020 palletcentral.com incorporate sustainability, pallets are a potential solution, not a roadblock. At its most basic level, the supply chain includes five steps: • Sourcing new materials • Manufacturing materials into basic parts • Assembling basic parts into finished products • Selling products to end users • Delivering products to consumers The role of the pallet is within the whole chain: • Delivering raw materials for assembly • Shipping out goods • Distribution to retailers • Warehouse storage • Direct-to-customer delivery So, what is it about wood that makes it the "lifeblood" of the global supply chain? There are several reasons, and most of them have to do with sustainability, reusability and recyclability, and customization. The numbers tell the Wooden pallet story: • Wooden pallets are a $31 billion industry in the U.S. • 93% of pallets in the U.S. are made of wood • More than 90% of all products in the U.S. move on wooden pallets • 95% of wooden pallets are recycled as of 2016 (in 1998, not even two-thirds of pallets were recycled). Sustainable Supply Chain The investment cost, the time it takes to train colleagues and gain knowledge, the regulations you must play within, the lack of industry buy-in … all of these are factors that outweigh going all-in on a sustainable supply chain, right? Wrong! Despite growing stakeholder pressure, many companies still do not have a comprehensive understanding of the performance, risks and sustainability impacts of their supply chain. It's becoming increasingly clear that a sustainable supply chain develops positive return for companies. And wooden pallets can play a key role. A recent supply chain study reveals this: "Overall, the study demonstrates that by improving environmental, social and governance (ESG) perfor- mance throughout their supply chains, companies can enhance processes, save costs, increase labor productivity, uncover product innovation, achieve market differentia- tion and have a significant impact on society." – The State of Sustainability Supply Chains: Building Responsible and Resilient Supply Chains, EY & UN Global Comact. When making improvements on the supply chain, it is important to note that using wood is good for the environment, despite some perceptions. In fact, every cubic meter of wood used as a substitute for other building materials reduces C02 emissions to the atmosphere by an average of 1.1 ton C02 (CEI- BOIS). If this is added to the 0.9 tons of CO2 stored in wood, each cubic meter of wood saves a total of 2 tons CO2. Based on these figures, a 10% increase in the percentage of wooden houses in Europe would produce sufficient CO2 savings to account for about 25% of the reductions prescribed by the Kyoto Protocol5.* Illustrating that "wood is good," as an industry we must continue to share with our partners facts such as: • According to the U.S. Forest Service, there were 119 percent more hardwood trees in 2007 than in 1953, with the growth-to-removal ratio of 2.00 (tow new trees for every one removed). • Each year, 1.7 billion trees are planted in the U.S., which is an average of 4.8 million seedlings each day. Another point in supply chain development to be aware in building a reusable and recyclable supply chain using wooden pallets is that, according to McKinsey, 90% of a company's impact on the environment comes from supply chains. Let's look at the value pallets bring to the chain. The wooden pallet life cycle is significant. In fact, we should be proud as an industry that 95% of them are recovered, refurnished and recycled! They become mulch, biofuel, animal bedding and more at the end of its service life. According to the research by the Virginia Tech and the USDA Forest Service, 508 million new pallets were manufactured. In the same year, 341 million pallets were recovered out of which only 35.39 million wooden pallets were landfilled in 2016. So you can see, use of recovered wood in pallet manufacturing is growing at a high rate. Are you familiar with Walmart's Project Gigaton? Their sustainability pledge to remove a gigaton of CO2 emissions between now and 2030 is ambitious. In fact, it's equivalent to taking 211 million passenger cars off the road in the U.S. for an entire year. So, how do pallets stack up with that? As an industry, we have been proactive to design a carbon Sources * https://europanels.org/wp-content/uploads/2018/08/Position-Paper-on-the-role.pdf https://www.naturespackaging.org/en/recycling-wood-pallets-reduces-carbon-emissions/ https://www.fs.usda.gov/treesearch/pubs/36144 https://corporate.walmart.com/newsroom/2017/04/19/walmart-launches-project-gigaton-to-reduce-emissions- in-companys-supply-chain