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To the average Joe Public, pallets are invisible. But, for supply chain managers and logistics professionals, pallets are the understated goliath of supply chains and are right up there with containers for delivering global trade.
For those in the know, the “plastic pallets versus wooden pallets” debate is the modern-day logistics dilemma. Although wooden pallets have traditionally been the go-to, plastic pallets have well and truly emerged as a superior alternative offering many benefits.
There are differentials between the two, but the most common sticking point that people talk about is cost.
So, in this blog, we address the question, are plastic pallets cheaper than wood?
Pallet Types: Wood versus plastic
There are many factors, other than the initial cost, that need to be considered when choosing the best pallet type for your business, so before we get to cost comparisons, let’s recap the key pros and cons of wooden and plastic pallets.
Wooden pallet pros:
- Widely available
- Traditionally cheap to produce (though the cost of timber is volatile)
- Can be repaired and recycled (to an extent)
- Low energy consumption in production
Wooden pallet cons:
- Susceptible to wear and tear
- Need to be frequently replaced
- Wood is heavier than plastic, pushing up transportation costs
- Nails and splinters can damage the packaging or even the products themselves
- Splinters and debris left behind can push up labour costs
- They absorb moisture
- For exports, wood must be either heat treated or fumigated
- Shortage of supply at busy times
- The environmental impact of deforestation – it can take one tree to make four pallets!
Plastic pallet pros:
- Durable, robust and long lifecycle (last 10 years+)
- Clean and hygienic
- High load capacities (static, dynamic, racking)
- They are often lighter than wood
- Some plastic pallets can be nested, which saves significant space
- Wide variety of styles and sizes
- Sustainable (using recycled plastics) and can be 100% recycled at end of life
- Can be used for export – compliant with ISPM15
- Consistent supply available
Plastic pallet cons:
- Initial outlay
- Can be difficult to repair (time-consuming)
- Can be costly if shipping overseas and there is no back-loading in place. However, this is easier to do with a nestable pallet, with more pallets in a stack
- Requires specialist equipment for recycling at the end of their useful working life. goplasticpallets.com offers a full recycling service
Initial Costs: Wood vs. Plastic Pallets
In the past, wooden pallets have been considerably cheaper than plastic pallets. Still the comparative price has fallen dramatically over recent years, with rises in global timber prices having a significant impact.
It is not always a straightforward comparison as many factors come into play when assessing the up-front pricing. First of all, the type of plastic pallet you choose will have a huge bearing on the overall initial outlay. For instance, a lightweight, nestable plastic pallet may typically cost around 50% more than a traditional used wooden pallet and only a few pence more than a new one. However, if you were opting for a heavy duty, long-lasting plastic pallet, the cost could be higher.
You must also consider the following:
Material quality: The price of pallets reflects the cost of materials used to construct them. So, for example, the type of lumber and its cost affects the price of wooden pallets. Wood prices have been rising for some years – the price index of imported sawn or planed wood grew from 132 in 2020 to 195.6 in 2022!
The higher the quality of pallet materials, the more expensive they become. For wooden pallets, quality heat-treated wood pushes the price up.
The most economical plastic pallet option is one made from recycled plastic. At goplasticpallets.com, 93% of our plastic pallets are made from recycled materials. This forms a key part of our mission towards building a sustainable future.
Manufacturing process: Plastic pallets are manufactured using a high-pressure moulding method that consistently produces high volumes of pallets. Plastic is melted, and the liquid polymer is then injected into a mould that is clamped together under pressure. Nowadays, most plastic pallets are made of HDPE (impact-resistant high-density polyethene), which is easy to process. Manufacturing a plastic pallet is more costly than making wooden pallets, as it requires specialised tooling and moulding machinery.
For wooden pallets, the appropriate timber is selected and cut to size. For pallets being used for exports, wood is treated under the ISPM15 international regulations to prevent the spread of pests and fungi. Once cut, wooden pallets are assembled according to specifications using a semi-automatic process.
Market demand: The price of pallets constantly changes with the supply and demand of the market. For example, when used wooden pallets are in short supply, the price increases, whereas increased automation and R&D could theoretically reduce the price of plastic pallets in the future.
Bulk purchasing: Considerable savings can be made when buying pallets in bulk. Take goplasticpallets.com’s popular Cabka-IPS NEW CPP 790 PE 9F nestable plastic pallet as an example. If you order 200 units, they are priced at £9.60 (excl. VAT) each, however, if you purchased in full truck loads, the price drops to £8.50 (excl. VAT) per unit delivered to the same region*
Ongoing costs: Wood vs. plastic pallets
While price differentials between the initial costs of wood and plastic pallets have been tightening, there is clear daylight regarding ongoing costs.
Regulatory requirements: For wooden pallets that will be shipped abroad, there are administrative expenses associated with ensuring compliance with international regulations. The same compliance issues do not apply to plastic pallets, as they are ISPM 15 exempt. Find out more about the use of plastic pallets for exports here.
Transportation and storage. Plastic pallets offer cost savings during day-to-day use and storage. The pallets are typically lighter than wooden pallets, which can significantly save on the cost of transportation, especially for exports, where weight matters. However, be aware the weight of plastic pallets will vary depending on the type (lightweight vs heavy duty, for example). If you want to benefit from increased space savings, you can also invest in nestable pallets. These nest neatly into one another, which means considerably more pallets can be carried in a single trailer during return journeys.
Lifespan and Durability: Assessing Long-term Costs
Lifespan: Although many factors come into play, such as level of usage and storage, you can typically expect a wooden pallet to last for one to two years on average, depending on use. A plastic pallet’s lifespan is over ten years. Plastic pallets are not susceptible to moisture, insects, and fungi damage, making them a better option for long-term use and international shipping. They can also be cleaned more easily. Plastic pallets are more structurally sound than wooden pallets, as they have stronger connections on blocks and runners. In contrast, nails on wooden pallets can loosen as the timber shrinks and splinters
Impact of Lifespan Costs on Total Cost of Ownership
If pallets are used infrequently or for one-time shipments, then wooden pallets may be the more attractive option. But as usage frequency increases, the advantage of plastic pallets becomes more apparent. Their ability to withstand repeated use without significant wear and tear – together with savings on transportation costs – means that plastic pallets are more cost-effective in the long term.
The cost of wooden pallets mount up for other reasons. In specific sectors, such as food distribution, the risk of contamination from wooden pallets may incur additional costs. Plastic pallets are easier to clean, making them more suitable for those industries where hygiene is vital. Some industries mandate the use of pallets made from specific materials. Read more about the role of plastics in the distribution of foods here.
So, how can the long-term advantages of plastic pallets be measured?
You can check out this cost example which makes the assumption that the purchase price of 5000 plastic pallets is £40 each, twice as much as that of wooden pallets. Despite this price gap, after five years, the operational cost of the plastic pallets is actually £75,000 less. After ten years, the savings are even more substantial.
If you are choosing pallets for multiple deliveries over many years, then plastic pallets will offer significant savings. Although wooden pallets generally require a lower upfront outlay, they will need more maintenance and have a shorter lifespan. Recyclable plastic pallets also support the creation of sustainable and environmentally conscious supply chains.
The durability and longevity of plastic pallets translate into lower costs and greater efficiencies over time. If you are looking at the long game, then it is a case of plastic fantastic.
*prices correct as of 21.08.2023