For retailers and manufacturers across the country, the bottom line often hinges on their products getting to market at the right time, and at the right cost. The actual delivering of these products, however (most often by way of trucks that...
For retailers and manufacturers across the country, the bottom line often hinges on their products getting to market at the right time, and at the right cost. The actual delivering of these products, however (most often by way of trucks that carry pallets and containers very long distances) can end up being a logistical, financial and environmental headache.
Many retail and manufacturing brands are faced with the transportation of empty shipping containers and pallets to and from warehouses once their products have already been shipped. This can cause redundancies, extended fleet service and time, and environmental damage from unnecessary road travel.
In order to reduce these inefficiencies, the Canadian Pallet Council (CPC) has developed an online solution to help ease asset tracking and transportation costs. Their new software, called Electronic Container Transfer (ECT), allows companies to run their logistics planning more smoothly, while being more environmentally friendly and cost-efficient.
ECT establishes opportunities for trading partners who are members of the CPC to exchange offsetting imbalances of empty shipping containers and CPC pallets simultaneously. By electronically reconciling offsetting imbalances of the same returnable empty container among trading partners, ECT eliminates or significantly reduces the transportation and handling costs while reducing road traffic and engine pollution.
How ECT works
Using the database already in place, the ECT system reviews transactions on a daily basis and identifies imbalances that form loops among a wide range of trading partners. Once a loop of imbalances has been identified, the system presents the opportunity to reduce the pallet or container imbalance electronically to each company, giving CPC members the option to accept or decline each opportunity or new route. If accepted, the imbalance is either eliminated or updated in order to organize and shorten the transport route.
A supplier in Kitchener, Ontario regularly ships a truckload of product to a warehouse in Vancouver. At the same time, a supplier in Vancouver regularly ships a truckload of product to a distribution centre in Mississauga.
ECT identifies the opportunity for the supplier in Kitchener to transfer the empty pallets from the Vancouver warehouse to the Vancouver supplier and the supplier in Vancouver to transfer the empty pallets from the Mississauga distribution centre to the Kitchener supplier. If the parties agree to this arrangement, a total of 6,960 kilometres are avoided by returning the empty pallets through this co-operative exchange.
Key benefits of ECT
The ECT functionality has two major benefits: the reduction of logistics costs for the return of empty pallets and containers and the reduction of greenhouse gas emissions.
By limiting redundancies in the shipping process and offsetting imbalances, the new software reduces costs by eliminating or reducing the transportation and handling costs associated with the return of empty pallets or other returnable containers. A reduction in transportation also means reduced administration costs for customers and reduced damages, fewer repairs and fewer scrap pallets due to reduced handling and transportation.
For a distributor in Toronto who has suppliers in Vancouver and Halifax, the total transportation and handling costs avoided by offsetting imbalances of 2,000 pallets (compared to returning the transportation of empty pallets) would be $59,000.
In addition to cost savings, one of the major benefits of the ECT software is its role in reducing harmful effects that can come from fleet transportation. By cutting road traffic and fuel consumption, greenhouse gas emissions can be drastically reduced. For that same distributor in Toronto who has suppliers on both coasts, trading offsetting imbalances of 2,000 pallets would have reduced greenhouse gas emissions by 77.5 tonnes. The reduction of tailpipe greenhouse gas emissions would have been 59.5 tonnes and the reduction of greenhouse gas emissions from the upstream production, 18 tonnes.
The CPC estimates that approximately 25 to 30 million CPC pallets move in Canada each year, a huge number when considering the potential overlaps and redundancies shipping these pallets can cause. The new ECT software is a step in the right direction in offering Canadian retailers and manufacturers the competitiveness and efficiency they require to meet their bottom lines.
Belinda Junkin is President & CEO of the Canadian Pallet Council in Cobourg, Ontario. Contact Belinda at firstname.lastname@example.org