The Single Most Important Object in the Global Economy

How much do you know about the pallet, that "humble construction of wood joists and planks"? Unless you are a manufacturer, shipper, supplier, retailer, or logistics worker, you probably don't know much about them. But as a consumer, you depend on pallets more than you know.

As one German article, translated via Google, put it: “How exciting can such a pile of boards be?”

And yet pallets are arguably as integral to globalization as containers. For an invisible object, they are everywhere: There are said to be billions circulating through global supply chain (2 billion in the United States alone). Some 80 percent of all U.S. commerce is carried on pallets. So widespread is their use that they account for, according to one estimate, more than 46 percent of total U.S. hardwood lumber production.

Companies like Ikea have literally designed products around pallets: Its “Bang” mug, notes Colin White in his book Strategic Management, has had three redesigns, each done not for aesthetics but to ensure that more mugs would fit on a pallet (not to mention in a customer’s cupboard). After the changes, it was possible to fit 2,204 mugs on a pallet, rather than the original 864, which created a 60 percent reduction in shipping costs. There is a whole science of “pallet cube optimization,” a kind of Tetris for packaging; and an associated engineering, filled with analyses of “pallet overhang” (stacking cartons so they hang over the edge of the pallet, resulting in losses of carton strength) and efforts to reduce “pallet gaps” (too much spacing between deckboards). The “pallet loading problem,”—or the question of how to fit the most boxes onto a single pallet—is a common operations research thought exercise.

Once you're convinced of how crucial the pallet is for global and even local trade, read how the humble pallet came about, and how it came to be so important. Link -via Boing Boing

(Illustration credit: Robert Neubecker)