November 25, 2011

Ikea plans to replace wooden pallets with paper platforms

The Swedish retailer is giving up wooden pallets for single-use, recyclable paper versions.

By DC Velocity Staff

Ikea, the Swedish home-goods and furniture retailer, is giving up wood pallets in favor of paper platforms. The retailer reportedly uses 10 million pallets annually worldwide and expects to save 10 percent on transportation costs by making the switch.

"We don't know if the paper pallet will be the ultimate solution, but it's better than wood," Jeanette Skjelmose, sustainability manager at Ikea's supply chain unit, told Bloomberg News reporter Ola Kinnander in November. Skjelmose said that the corrugated-paperboard pallets are able to support a load of 1,650 pounds.

The pallets will only be usable for a single, one-way trip and then will be recycled. Because the paper versions are smaller and 90 percent lighter than their wooden predecessors, Ikea expects to save nearly $2 million annually by reducing the number of truckloads and containers it ships. But it will also have to spend nearly half that to purchase card stock and new forklifts, the retailer said.

Ikea is placing a big bet on the compact, lightweight paper pallets; wooden pallets will be gone from the company's system by the end of December. The question now: Will the cost savings from the smaller, lighter, one-way paper pallets outweigh the benefits of using multiple-trip wooden pallets?

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