How to work out if pallet storage is right for you

As businesses evolve, their storage needs change. In the past two years this has meant many organisations finding themselves with large volumes of freight that need to be stored in an outsourced facility. Current reasons for exploring pallet storage include:

• Brexit issues meaning companies need to bring in larger amounts of goods and store them, to resume costs or transportation times
• Changes to customer behaviour post-pandemic meaning they buy more online, leading to more demand being met from UK warehouse space rather than shops or other outlets
• Supply chain problems as a result of the Ukraine conflict requiring different routes and more storage space in the UK.

All of these, and more, mean that warehouse space is increasingly becoming pallet storage space.

What is pallet storage?

There are two different forms of warehouse space that handle pallet storage, the first is block stacking.

Block stacking

This is where pallets, often shrink-wrapped, are stacked on top of each other without shelving. This has advantages:

• It’s cheaper – because it doesn’t require shelving or racking
• Space maximisation – eliminating aisle space and stacking vertically allows for effective use of warehousing
• SKU management – by stacking large groups of the same SKU, stock can easily be controlled and located, improving logistics at the start point.

But it also has disadvantages:

• Height restrictions – depending on the materials store, there can be limitations on height stacking without shelving or other structures
• Damage risk – if the weight is too high or congruence of the stacking is slightly askew, there can be damage to lower levels of stock
• Accidents – block stacking lacks the stability and sturdiness of racking, meaning that it’s more prone to accidental damage.

Racked storage (with or without automation)

This too has advantages and disadvantages. On the plus side:

• Pallets can be stacked higher and in mixed loads – because the racking stops downward pressure on the pallets which could damage lower items
• Pick and pack is swift in fully automated warehousing with racked storage

On  the minus side:

• Racked storage is more expensive and automation adds even more to the cost.

So how do you know if pallet storage is the right solution for your business? If any of the following factors are significant to you, pallet storage might be a solution.

Warehouse storage space is at a premium

Pallet storage is a space-efficient way of storing goods, especially if you’re carrying items of reasonably large unit size. Hiring warehouse space is a significant cost for any business, and exploring outsourcing your pallet storage may be a way of reducing overheads. This can be particularly advantageous where a business needs to have warehousing near an expensive centre of operations like a major city, where costs can be significantly higher.

Simplifying warehouse operations is a goal

Generally, palletised goods are easy to handle and transport, making logistics more straightforward. This can both offer a simplified warehouse system, thus saving time and cost and also the ability to work with a range of logistics partners because palleted goods are a standard unit which can easily be costed into transport plans. Where a company has previously has a range of warehousing spaces, pallet storage can be a good first step towards centralising.

Damage and pilferage are a major cost

There’s no doubt that pallet storage reduces pilferage, but only if the pallets are shrink-wrapped. This is because removing a whole pallet of goods from a warehouse is difficult but taking individual items from bins or shelving is much easier. Damage is also reduced because material handling is standardised when pallet storage is the primary method of holding and transporting stock. People can be trained on fewer operations, have to make many fewer risk assessments because the selection and movement of pallets is completely standardised and equipment use is also clear and limited and the right personnel (or automated processes) can be in place at the right time with the right equipment to undertake each task.

Your warehouse demand is seasonal or due to go through a growth phase

Examples here are businesses that have strong summer or winter component (hammocks and garden furniture in spring and summer, Christmas novelties in winter, for example) – these are companies that see a huge surge in demand in certain periods of the year but wish to secure stock in other periods, so they don’t have to contend with increased logistics cost or delays in transportation.  Alternatively, your company might be going through a growth period that requires stocks of equipment or materials that will be used to help the business expand – in such cases, pallet storage may be the ideal option as it permits the stockpiling of a guaranteed amount of supplies that can then be transported to the necessary location as required.

There are other issues to bear in mind when deciding about pallet storage.

Standard UK Pallets, CHEP or Euro pallets

There are three main pallet styles commonly used in the UK. CHEP (Commonwealth Handling Equipment Pool) pallets and standard UK pallets are the most common in the UK and they measure 1200mm x 1000mm. Euro pallets are slightly smaller at 1200mm x 800mm and are often used by overseas companies. The size differences seem minimal but will affect racking systems if used. This can influence costs and needs to be clear to any logistics provider.

Block stacking or racking

We’ve already covered this in depth, but it’s important to be clear if you need one, or the other, or a blend, when you’re planning warehouse rental, as it may be more cost-effective to split warehousing to make the best use of your logistics budget. It’s also important to recognise that block stacking can incur additional handling costs as it is not always as easy to move around block stacked warehousing as in racked storage facilities.

Fragile or hazardous goods

While most warehouse space is well equipped to handle both fragile and hazardous goods, you may find you pay more for storage of fragile goods which have to be located in a specific warehouse area, and chemicals requiring (intermediate bulk container ) IBC storage always cost more, so if you have mixed materials you need to warehouse, undertaking good assessment is vital to ensure you’re getting the best deal.