SMART Logistics Potential Customers

Part
01
of five
Part
01

SMART Logistics Potential Customers: Part 1, US Food Industry

To craft a comprehensive answer, the research below lists in great depth insights to the following points:
a. The food industry in the United States and its main segments.
b. The Biggest contributors/companies in each segment.
c. A case study on how a raw material like eggs, moves between segments within the food industry, from production step up to the distribution and customers purchasing step.

Food Industry in the united states

Food industry definition

The food industry in the United States can simply be defined as the process of turning a raw material into edible food, that can then be distributed and consumed by end users. A lot of internal and external drivers have and still affect the food industry greatly. Some of these drivers are policy, environmental changes and the changing demand in various markets.

The five segments that make up the food industry

The final edible product (food) has to pass through a subsequent flow of five segments, these segments make up the food industry in the United States. Each segment has one or more dominant and large companies. The five segments in order and their largest companies are:
a. Farm Production Segment
The key players in this segment are the farmers, fishers, and ranchers; where they combine their natural resources as land, water, and labor with other resources like capital and machinery to produce raw agricultural products (crops and livestock).
- Main companies are: CHS, Sanderson Farms, Cal-Main Foods

b. First Line Handlers and Primary Processor Segment
The workers in this segment combine, store, and provide initial processing of the raw materials before shipping them to wholesalers or the processing and manufacturing segment.
- Main companies are: PepsiCo, Archer Daniels Midland, Coca-Cola, Tyson Foods.

c. Wholesale and Logistics Segment
The wholesale food industry consists of companies that purchase and store food products in warehouses. These companies sell and distribute these products to retail outlets using various transportation options.
- Main companies are: Seaboard and Andersons.

d. Retail Food & Food Services Segment

After distributing the products, this segment is related to the consumers in the United States who purchase their food from grocery stores, convenience stores, vending machines, and other retail outlets.

- Companies are: Walmart, Kroger, Albertson's, McDonald's, Starbucks, and Darden Restaurants.

e. Consumer Segment
As the last segment in the food industry, consumers represent the final actors. Consumers can be food purchasers, or those who receive food assistance through governmental programs or food banks or school feeding programs.

The production and logistics of eggs in the Food Industry

As an example of an edible product passing through all segments making up the food industry, this research details all steps in the process of eggs production and how one or more step in the production process is assigned to a significant segment in the food industry.

The steps in the eggs' production process in order are:
a. Laying
c. Washing
d. Candling
e. Sorting and Packing
f. Shipping
g. Selling and Storing
f. Enjoying

How each step relate to a significant segment in the food industry
a. Farm Production Segment:
This segment has the laying, collecting, washing and candling processes. Where farmers or other laborers basically feed the chicken by hand or using equipment, collect eggs by hand, wash and sanitize the collected eggs, and finally validate the quality of eggs by inspecting the egg's interior under a light source.

b. First Line Handlers and Primary Processor Segment
The (sorting and packing) and shipping steps are in this segment. Laborers sort and place eggs in cartons. These cartons are then added to egg shipping cases, which can vary in sizes based on the demand and can usually carry a dozen eggs. Egg shipping cases are then placed in pallets -that also vary in sizes- to be shipped to companies that purchase and store eggs in warehouses.

In order to have an overview of the number of pallets used to ship egg cases to companies, this research gathers the following precise numbers and draws an approximate number of pallets that were used in 2017 to ship eggs to companies in the United States:

- According to (eggcartonstore), the size of a 30-dozen egg shipping case is: 12" Width x 24" Length x 13 3/4" Height.

- And, given the standard pallet sizes are:

- Assuming that a pallet of size 48" X 48" is used to ship 30- dozen egg shipping cases, then one layer of egg boxes in the pallet will hold four 30- dozen size boxes (Which is the width of the pallet- 48" divided by the width of the egg shipping case- 12'').

-Assuming that a pallet can also be stacked four egg shipping boxes high, then 1 pallet can hold sixteen 30-dozen boxes.
- According to the American Egg Board, in 2017, 255 million 30-dozen egg shipping cases were distributed to companies.
- Assuming each pallet hold sixteen 30-dozen egg shipping cases, then dividing 256 million egg shipping cases by 16, results in approximately 16 million pallets of eggs shipped in 2017.

c. Wholesale and Logistics Segment
Companies receive the pallets holding all the egg shipping cases, and they sell and distribute the eggs to retail outlets using various transportation options. Thus, the process of selling and storing belongs to this segment.

d. Retail Food & Food Services Segment and Consumer Segment
As the final two segments, the final process of (enjoying) belongs to these segments. Customers can buy their eggs and enjoy their meals.

Significance of pallets in any industry

Pallets of different sizes used for shipping diverse goods are critical and essential for transporting anything. According to inboundlogistics.com:
More than two billion pallets are in circulation at any given time in the United States.
Approximately 94 percent of industrial and consumer goods in the United States travel on a pallet at some point in their movement from production or manufacturing plant to distribution facility to end customer.

Smart pallets have been embraced in the US food industry, especially in the egg industry and have helped revolutionized egg transportation. For instance, "egg producers Trillium Farms and Centrum Valley Farms have decided to use the smart pallets exclusively when shipping eggs to their customers in order to track location, distance, time, temperature and shock/vibration data. Egg producers benefit from reduced product breakage and greater hygienic standards, according to Doug Mack, Chief Operating Officer at Trillium Farms." Over 2 billion pallets are in use daily in the US, with about 25% needing to be replaced after a year.

The push towards smart pallet is also driven by its superior durability compared to the existing alternatives that are mostly made of wood. According to Doug Mack, Smart pallet solutions offer "superior platform, performance, data collection and phytosanitary attributes."

Conclusion

There are five segments that make up the American food industry. In subsequent order the segments are: Farm production, First Line Handlers and Primary Processor, Wholesale and Logistics, Retail Food and Services and Consumer. The process of handling any product must go through these five segments of the food industry; starting its production up to its shipment and distribution. Pallets are critical and essential to ship and transport any type of goods with "more than two billion pallets are in circulation at any given time in the United States".
Part
02
of five
Part
02

SMART Logistics Potential Customers: Part 2, US Beverage Industry

OVERVIEW
Through our research we found that there are 9 major segments of the United States beverage industry. The 9 segments are: carbonated soft drinks, bottled water, juice & juice drinks, sports drinks, tea and coffee, energy drinks & shots, alternative drinks, beer, and wine & spirits are the specific industry segments for the US beverage industry. This research will identify and briefly detail an overview of the industry segments for the US beverage industry.

CARBONATED SOFT DRINKS
We found that the United States is the world's largest carbonated soft drink market in terms of both growth and value. We found that some major companies in the carbonated soft drink market were:

Coca Cola Company — Leading beverage company that provides carbonated soft drinks such as Coke, Diet Coke, Sprite, Fanta, and Minute Maid to name a few.

PepsiCo. — Major beverage company that makes carbonated soft drinks such as Pepsi, Diet Pepsi, Wild Cherry Pepsi, Mountain Dew, Diet Mountain Dew, Mug Root Beer, and Sierra Mist.

Dr. Pepper Snapple — The beverage company’s brands include Dr. Pepper, Snapple, 7up, A&W Root Beer, Canada Dry, Hawaiian Punch, Crush, and Sunkist.

BOTTLED WATER
The United States currently has the largest bottled water market worldwide. Bottled water is regulated by the U.S. Food and Drug Administration (FDA). Before the water is bottled, it will be treated by distillation, reverse osmosis, filtration or ozonation. Bottled water can be either carbonated or not.

Our research has found that the in the United States market, the top selling bottle water brands are Dasani, which is owned by Coca Cola, Aquafina, which is owned by PespiCo., Nestlé Pure Life and Glaceau Smart Water, which is a privately owned subsidiary of The Coca-Cola Company.

JUICE & JUICE DRINKS
The juice and juice drinks category include juices such as orange, apple, and pineapple; lemonades & punches such as fruit punch, tropical punch, strawberry lemonade and peach punch; juice drinks such as sparkling punch just to name a few. Juice and smoothies have become a strong part of the beverage industry category. Fruit juice production has showed volatile tendencies during the last few years in the United States. The sales of juices and juice drinks in the U.S. has reached about 971.5 million cases as of 2015.

Our research has found that Tropicana (which is a division of PepsiCo, Inc.), Simply Orange (a brand of Coca Cola), Florida’s Natural, and Minute Maid (also a brand of Coca Cola) are leaders of the bottled juice industry.
SPORTS DRINKS
The sports drink market in the United States was estimated at $852.0 million in 2017. The sport drink market is expected to reach $1135.2 million by the end of 2023.

The major brands in the sports drink market are Gatorade, PowerAde, and BodyArmor. Gatorade is manufactured by PepsiCo. Gatorade commands 46% of the worldwide sports drink market.

PowerAde is made by Coca Cola Company. PowerAde accounts for about 20% of the sports drink market. PowerAde combines carbohydrates, electrolytes with fluids for energy and hydration.

BodyArmor is marketed as a natural sports drink. BodyArmor offers their sports drinks in grape, mixed berry, fruit punch, strawberry banana, orange mango, and tropical punch flavors.

TEA & COFFEE
Coffee drink sales continue to grow year after year. This category includes coffee drinks such as ready-to-drink iced coffee, hot coffee drinks, and specialty coffee drinks. The United States market for ready-to-drink and packaged coffee sold at retail was projected$13.5 billion in 2015. It is estimated that by 2020, sales are expected to reach nearly $18 billion.

We found that the leading companies in the coffee drink segment of the United States beverage industry are Dunkin Donuts, Starbucks, and JAB Holdings, who own brands such as Krispy Kreme, Keurig, Caribou Coffee, and Espresso House.

Our research found that tea sales are growing as well, exceeding $7 billion in 2015. By 2020, it is estimated that retail sales of tea in the United States will be near $9 billion. The tea category includes drinks such as ready-to-drink iced tea, flavored tea, and green tea.

Our research revealed that the leading ready to drink tea brands in the United States in 2017 were Arizona, Lipton Pure Leaf, and Gold Peak (manufactured by Coca-Cola).

ENERGY DRINKS & SHOTS
The energy drink industry consists of beverages such as energy drinks and energy shots. Energy drinks are best known as beverages that promise the consumer to give them an extra energy boost. Energy drinks typically contain additional ingredients such as taurine, guarana and B vitamins. They are also typically high in caffeine. Energy shots are basically just a more concentrated version of the energy drink that contains a larger amount caffeine. Statistics indicate that sales of energy drink amounted to $2.8 billion dollars in 2016. Sales have consistently increased since 2011. According to industry sources, the energy drink market reported a sales growth of 5.13% in 2016.

The energy drink market in the United States is dominated mainly by major companies such as Red Bull, Monster Beverage (a subsidiary of Monster Energy), and Rockstar, based on 2016 sales.


ALTERNATIVE DRINKS
Alternative beverages are non-alcoholic drink with non-traditional ingredients. They make up a smaller portion of the beverage market than soft drinks do in the United States. However, sales continue to improve, largely because of the various benefits the drinks provide. Alternative beverages are normally sold in smaller packages. As a result of smaller packaging, they can command higher prices per ounce.
We found though our research that the major companies that are providing alternative beverages in the United States are Coca-Cola Co., PepsiCo, and Dr Pepper Snapple Group.

BEER
We found that in 2016, the 2nd largest country in worldwide beer production was the United States. In the United States beer market, we found that sales were about $34.17 billion dollars in sales in 2016.

After extensive research of statistics, sales numbers, and numerous articles, we have found that the top beer companies are Anheuser-Busch (including brands such as Bud and Bud Light), MillerCoors, and Constellation Brands.

WINE & SPIRITS
Wine
The United States has ranked fourth in the category of the largest wine production country. We found that wine sales have held about 17% of total alcohol sales in the United States. According to the articles that we researched, based on sales the top 3 wine companies are Barefoot, Sutter Home and Franzia.

Spirits
The distilled spirits market in the United States is the 2nd most valuable in the entire world. Vodka has remained the largest category, which represents one third of the total volume. Sales of Vodka rose 3% to $6.2 billion in 2017. Other spirits include whiskey, tequila, Cognac, and Irish whiskey. Based on our extensive research of articles, sales numbers, and statistics, we found that some top brands of spirits sold in the United States are Grey Goose, Ketel One, Barcardi, and Patrón.

LOGISTICS
We found that manufacturing a soft drink is a multi-step process, that involves a number of steps. Most soft drinks go through a similar life cycle. They typically begin the syrup producer, then go to the bottler, then to the distributer (if necessary), then to a merchant and lastly, to the consumer. This is what we found is typical life cycle of a soft drink.

First raw materials are blended to form syrup concentrate for specific the beverage. If it is a diet drink, the artificial sweetner is added. Then the syrup concentrate is packaged for shipment.

The bottler receives the syrup concentrate and adds any necessary sugars or other ingredients. Water and carbonate are then added and product is placed in appropriate container. The containers are then packaged for shipment and shipped.

The distributor receives the product and repackages if necessary, then they send the final product to the merchandiser or final customer.

We found a report that states that"The Coca-Cola Company selected Oracle Transportation Management and deployed it to manage inbound transportation between supplier networks and its plants. To date, five carriers are fully integrated on the system, and Coca-Cola expects to have 15 of its 30 inbound carriers online by the end of the 2011, and all inbound carriers online by the end of the first quarter 2012. The company is concurrently working to deploy the solution for all outbound transportation providers—about 15 carriers who transport products between the plants and bottling partners and customers, worldwide."



Part
03
of five
Part
03

SMART Logistics Potential Customers: Part 3, US Warehousing and Logistics Industry

OVERVIEW

We researched on warehousing and logistics in the United States. We found that the US scored 3.99 in the Logistics Performance Index 2016 making it one of the top logistics countries in the world. The supply chain in the United States is integrated with some top logistics companies involved in all the key segments. We searched for packaging, warehousing and trucking segments paying attention to how pallets are used across the chain. The logistics chain involves an integration of packaging, transportation, and warehousing and pallets play a key role in each segment. Pallets have been referred to as the ‘cell’ of logistics.  Our research shows that about 94% of US goods travel on a pallet in the logistics chain. So, when 'outfitted with the right technology', pallets also can track the assets. We could identify players in this industry to include Nelson Company, Knight Swift, XPO Logistics. Many companies who work with reusable pallets are embracing RFID technology to track and manage their pallet fleet.

Please find below a dive into this request detailing three companies for each segment and how pallets are used in each segment.

PACKAGING
Companies:
1. Independent Packing Services, Inc. based in Minnesota, USA. With 25 years’ experience in packaging, they incorporate ‘corrugated plastic or fiberboard’ into their packaging designs.
2. Nelson Company founded in Baltimore, USA, has been offering expert packaging and crating advice for the past 100 years.
3. Georgia Pallet and Crate Company is based in Atlanta, USA. Since 1982, the company has supplied wooden crates and containers to companies that ship industrial products.

HOW PALLETS ARE USED IN PACKAGING
The pallet used in packaging will determine whether the goods will be damaged while being transported or will arrive at their final destination intact. This is why smart logistics companies are particular about the pallets they use in packaging. They pay attention to the material they will use in the packaging.
Packaging companies use wood pallets more. 8 in every 10 of reusable pallets are made of wood. This is because wood pallets can be easily reused or recycled. For it to be reused, in the pooling system, it has to meet criteria of size. In America, standard pallet size is 40x48 inches while in Europe it is 80cmx120cm. Other pallets are made of metal, plastic or paper, depending on the goods being transported.

The pallet used by a packaging company is also determined by where the package is being sent. If the goods will be freighted to another part of the country or world, then it is important to determine the climate condition(s) that the pallet will encounter, so that the packaging will be made to suit these.

It is also important that packaging companies do not make pallets too light or to stack more products into a pallet as this will have consequences in form of product loss or damaged goods.

TRUCKING

Companies: 
1. Knight Swift has a fleet of 77,000 trailers and 23,000 tractors.

HOW PALLETS ARE USED IN TRUCKING
In order to make the best trucking decisions, a shipper needs to know the dimensions of the pallets they will use a well as the durability of the pallets. Most trucks used in LTL shipping are 96'' wide. This means that it can take two standard to larger sized pallets up to 48″x 48″ side by side in one go. The material used in producing the pallet to be used is also important in trucking. Since the pallets will spend time in the truck being ‘bumped and bruised’, deciding whether wood, metal, plastic or paper packaging should be used is important. Another technology that comes into play in pallets and trucking has to do with algorithms. These technologies take into consideration not just dimensions of the truck but also the weight of the truck relative to the weight of the load and distance to be traveled and how this affects the pallet. This research talks about ‘GRASP algorithm’ which links pallet and truck loading to provide a solution which optimizes the position of the pallet on the truck for best trucking results.

WAREHOUSING
Companies: 
1. Menlo was founded in 1990. The company is based in San Mateo, California. They offer warehouse management services.
2. USF Logistics has headquarters in Oak Brook, Illinois. They provide contract warehousing services among other logistics services.
3. XPO Logistics is a US-based logistics company which has over 755 warehouses and 150-million sq. ft. of space.

HOW PALLETS ARE USED IN WAREHOUSING
There is a relationship between the packaging industry, which supplies the pallets and the warehouse which stores the pallet. This means that the pallet provider and the shipper need to communicate about how the pallet will be used and what warehouse system or business model they operate. For instance, pallets that will be used within an organization (where the pallets travel within the company’s distribution system) will differ from pallets used when the distribution involves outside wholesalers and locations.

Pallets are also used in warehousing for storing the products before onward distribution. The size and dimensions of the pallets will determine how they will be stacked in the warehouse and what pallet storage system will be used.

Technology is applied in warehousing. One way which involves pallets is labeling. The Print and Apply Labeling technology automates how shipping labels, packing slips, and other documentation requirements are applied on the pallets.  Other technologies in warehousing are Cartonization, Dimensional Weight, Pick by Voice and Pack Automation.

IMPORTANCE OF TRACKING
Introducing tracking technology in pallets is important in logistics. As stated earlier, the pallet is seen as the 'cell' of logistics and so introducing the right technology into pallets is essential. Tracking pallets is important because more companies are opting for reusable pallets. Two technologies being used are Active RFID and Bluetooth. RFID uses electromagnetic fields to identify and track tags automatically. These tags store identifier information. The advantages of active tags include easily localizing assets, optimizing processes and also creating greater accountability.

CONCLUSION
To wrap up, we found that pallets are an integral part of US logistics with over 90% of industrial and consumer goods traveling on pallets in the distribution system. We also found that technology is important in warehousing, trucking, and packaging. Also, outfitting pallets with the right technology such as RFID or Bluetooth will help in tracking goods throughout the logistics process. 
Part
04
of five
Part
04

SMART Logistics Potential Customers: Part 4, US Retail Industry

There are 10 main segments within the US retail industry I have identified. These segments include 1. Motor vehicle & parts dealers 2. Food & beverage stores/ Food services & drinking places 3. General merchandise stores 4. Building material & garden dealers 5. Health & personal care stores 6. Clothing & clothing accessories stores 7. Miscellaneous store retailers 8. Furniture stores 9. Electronics & appliance stores 10. Sporting goods, hobby, book & music stores.

US Retail Industry

After thorough analysis of the request and the information provided I have listed and briefly detailed the main industry segments within the retail industry, a few of the main companies within each segment, as well as provided an example of a product passing through all segments making the retail industry.

Motor vehicle & parts dealers

The nature of the motor vehicle & parts dealers industry is as a link between the manufacturer and the U.S. consumer of automobiles. Companies in this industry conduct business out of physical retail establishments selling automobile parts, supplies, batteries, and lubricants. The industry includes about 37,000 establishments and brings in a combined annual revenue of $53 billion.

Top Companies:

2) AutoZone

Food & beverage stores/ Food services & drinking places

Food services and drinking places is one of the most widespread and familiar industries in the world. Statistics provided by CollegeGrad states that in 2008 across the United States there were 546,300 privately owned food service and drinking places.

Top companies:

I have based the top companies for this sector based on sales and annual revenue.

General merchandise stores/Gasoline stations

General merchandise stores are among some of the most visited retail establishments across the US. General merchandise stores sell a wide range of various items. Establishments included in this industry are department stores, super centers, and warehouse club stores.

Top companies

1) 7-Eleven
3) Speedway

Building material & garden dealers

Products sold by these retail establishment are large and heavy, such as; landscaping timbers, lawn furniture, lawnmowers, stone pavers, etc. This makes shipping these products difficult and expensive so most prefer a traditional brick and mortar establishment and make little use of e-commerce.

Top companies

Health & personal care stores

Stores such as pharmacies and drug stores. These establishments specifically sell health care products and medicine, however some stores do sell other commonly used household products.

Top companies

Clothing & clothing accessories stores

According to information provided by CollegeGrad in recent years many of these establishments are moving towards bypassing wholesale and buying directly from the manufacturers. This industry makes great use of e-commerce to showcase their items for sale.

Top companies

1) Nordstrom
3) Old Navy
4) Macy's

Miscellaneous store retailers

Establishments within this segment retail from a fixed POS location. Establishments that fall into this segment are establishments such as florists, used merchandise stores, pet and pet supply stores, etc.

Top companies

The number of different types of establishments in this segment of the retail industry are too large to identify the TOP, so I have provided the top companies within one of the types of retail establishments falling under this segment.

Furniture stores

A furniture depot is defined as a store that sells movable, generally functional, articles you are able to place in a room, house, etc. This industry is so fragmented that there is no large number of companies accounting for a majority of the industry.

Top companies

2) Consort
4) James

Electronics & appliance stores

Establishments in this segment generally have special floor displays to properly demonstrate the product. Revenue for this industry has fallen over the past 5 years but profit margins have begun to recover from their previous 2012 figures. Revenue for this industry is $73 billion annually.

Top companies

2) IBM
3) Intel
4) Apple

Sporting goods, hobby, book & music stores

Companies within this segment provide retailed products for each sub sector as well as expertise on the use of sports equipment and other leisure activities. In 2015 this segment of the retail industry earned an annual $63Billion.

Top companies

THE PRODUCTION AND LOGISTICS of a t-shirt

First step:

Planting and harvesting the cotton seeds to be used for the t-shirts is the first step in production. Farmers plant their cotton using large machines covering 10-24 rows at a time. The seed cotton is then stacked into bricks called modules.

Second step:

Weaving the fiber Into cloth is the second step in production. The cotton is run through a machine called a carding machine, which cleans and lines the cotton up in 2-3 soft, straight ropes.

Third step:

Finishing and shipping the cloth is the third step. Once the cotton has been woven into cloth, it is then shipped via planes, trains, trucks, and cargo ships to textile finishing facilities.

Fourth step:

Producing the garments is the fourth step. Most companies produce their clothing in factories spread around the world. However, there are a few who use the same facility they used to spin their cloth. With help from design and creative teams, companies then decide what sizes, cuts, and colors will be in fashion for the up and coming weeks and months.

Fifth step:

Shipping finished products to the warehouse is the fifth step. Depending on how the producer decides to distribute the t-shirts, they will either head to the distribution warehouses or directly to the retail store once they leave the factory. For instance, Walmart’s implementation of cross-docking (where arriving truck inventory is shifted directly to departing trucks) skips lengthy transits, shortens warehouse storage times, and lowers inventory storage and transportation costs.

Sixth step:

Distribution from warehouse to storefront is the final step in the process. Once a request for more t-shirts is made to the warehouse by a retail store, they will be sent to the store. They are sent to your home if they were purchased online. It is loaded onto either a truck, freight, or postal service, if ordered online. Once received at the store, employees will unpack it and decide where to send or display the t-shirts.

Conclusion

I have provided a detailed list of the main segments within the US retail industry, as well as some top companies for each segment. I have also included in this brief a detailed overview of the production and logistics of a t-shirt from raw materials to manufactured product between suppliers, processors and distribution partners.

Part
05
of five
Part
05

SMART Logistics Potential Customers: Part 5, Challenges and Potential solutions

The key challenges facing the US logistics industry, specifically pallets, include contamination in the food and beverage industry and lost or counterfeited cargo due to poor tracking capabilities in other end-user industries. The main companies using smart pallets are Trillium Farms and Centrum Valley Farms, and Wal-Mart. Smart pallets address these challenges by using a more durable and impermeable composite material preventing breakage and contamination, and better tracking technology reducing loss and counterfeit cargo as well as reduced labor costs.

Key Challenges

Two main challenges were identified facing the food and beverage industry using wooden pallets. The most commonly mentioned is the risk of contamination by fungus, bacteria, insects or other foreign materials. Another problem is the inconsistency in weight and size for companies using automated machinery and robotics. The cost of non-wooden pallets is a challenge for this industry.

In other end-use industries using pallets such as warehousing and material handling, and retail, challenges include large financial loss due to lost or counterfeited cargo as a result of poor tracking. The two segments most affected are the pharmaceutical and automotive. Currently, tracking the pallets is limited to radio frequency identification (RFID) tags or global positioning system (GPS) devices, both of which are expensive and, RFID requires additional infrastructure.

Based on these challenges, the end-user industries that would most benefit from using smart pallets include the food and beverage — although cost could be a problem — and the pharmaceutical and retail.

Companies using smart pallets

Several companies have already began adopting the smart pallet technology such as egg producers Trillium Farms and Centrum Valley Farms. The smart pallets allow the companies to track location, distance, time, temperature and shock/vibration data and thereby reducing breakage and increasing hygiene standards.

Wal-Mart began its pilot in 2004 with eight suppliers shipping RFID-enabled pallets. These included Gillette, Hewlett-Packard, Johnson & Johnson, Kimberly-Clark, Kraft Foods, Nestle/Purina, Proctor & Gamble and Unilever. Wal-Mart is optimistic about the systems use in the produce sector as well.

Important Pallet characteristics

Although data was not available for the individual segments it is estimated that two billion pallets are in circulation in the US per day. In 2016, over 800 million wooden pallets were produced, 500 million new and the others recycled.

In terms of size, the 48 x 40 pallets was the not most dominant in 2016, representing 35% of pallets produced. The 48 x 48 pallets had decreased by 21% since 2011, while the 48 x 40 pallets had increased by 11%. Researchers suggest that the decreased difference between the sizes may be that the industry is becoming more standardized than before.

Customers consider purchase price, strength, durability and reusability, in the respective order, when considering which pallets suit their needs. The majority of companies are using wood pallets, followed by plastic then wood composite and metal. Alternatives to wood pallets have grown in popularity from 2016 to 2017, plastic pallets showing the most significant increase.

Design is becoming an important characteristic. Many end-user industries prefer stringer pallets to the block pallets as the stringer pallet provides better support and four-way fork-lift access. Retailers such as Costco and Walmart require vendors ship their products using the stringer design. Other alternatives with regard to physical characteristics include plastic-coated pallets, pest-free or treated pallets.

Some companies are also using pallet rental companies or some other type of pallet retrieval or recovery system.

Advantages of smart pallets

The smart pallet is suitable for all the various major industries, from retail to pharmaceutical.

The smart pallets are comprised of composite materials which offer remarkable strength unlike anything else in material handling. The benefits of this improved durability includes reduced product damage, worker compensation, and system downtime. It also increases the life span of the pallet and is therefore more cost effective.

The system allows the user to potentially avoid excess CO2 production and thereby reduce environmental damage and help achieve sustainability.
The smart pallet is aimed at one of the food and beverages most pressing issues; health and safety. Smart pallets are designed from impermeable material approved by the FDA and USDA. This material prevents bacteria from entering the material and reduces the risk of contamination. The pallet can be easily cleaned, therefore hygiene and cleanliness is a huge selling point.

The improved technology saved six minutes of staff time per pallet to scan and log, approximately two man-years of labor. In addition, it reduced the potential for error and improved fulfillment. Improving overall costs.

Conclusion

The smart pallet can solve some of these urgent challenges facing the logistics industry by ensuring hygiene, reducing costs associated with manual tracking and lost or counterfeit cargo. The product has many other benefits that could address other issues perhaps not mentioned such as real-time tracking for industries like pharmaceuticals.
Sources
Sources

From Part 01
From Part 02
From Part 03
From Part 04