Pallets To The Rescue?
The trucking industry has long said it needs the help of the shipping industry to alleviate long waits at the dock that make it impossible for many drivers to scrupulously follow hours of service regulations. The new regulations make it even more imperative that changes be made at the logistics level. Help may be on the way from an unlikely source: the lowly pallet.
CHEP, a pallet pooling service used by many of the nation's largest shippers (Proctor & Gamble, Kraft and ConAgra) is taking pallets high-tech with Radio Frequency Identification, known as RFID.
RFID tags, consisting of tiny computer chips and antennae, will be placed on CHEP pallets for customers using CHEP's new PLUS ID service. At the shipper's warehouse, as RFID-tagged cases of goods are placed on the pallet, they will be scanned and entered into a central database accessed via the Internet. That pallet will then be identified by the system as carrying those specific goods. As the pallet goes from the shipper's warehouse to the receiver's warehouse, the RFID tag on the pallet will be read by special scanners at each location as the forklift carries the pallets through the dock door. The central database will be able to track the movement of the goods with a single scan of the pallet, rather than scanning each item on that pallet. That information will be automatically entered into the participants' inventory software.
CHEP has spent six years developing the technology, including a yearlong pilot of 250,000 pallets in its home state of Florida. They experimented with various types of tags and locations in order to find one that would be read virtually 100% of the time without being damaged by forklifts.
Along with improved inventory tracking for shippers and retailers, RFID will make for faster receiving and shipping.
"RFID will enable automated receiving, which has the potential for enormous savings by reducing the time that trucks have to sit at loading docks," says Simon Ellis, supply chain futurist at Unilever.
The question is, how do you get shippers and receivers to invest in the RFID technology?
Enter retailing giant Wal-Mart. The world's largest retailer announced in November that it has directed its top 100 suppliers to begin using RFID-enabled tags on all pallets and case loads of product shipped to its stores and distribution centers by January 2005. All suppliers - 10,000 of them - will be required to use the technology by 2006.
Target, the fourth-largest U.S. retailer, recently joined top competitor Wal-Mart in requiring suppliers to add RFID tags to pallets and cases. The Department of Defense also has said it will require its suppliers to use the tags. Other companies, however, such as J.C. Penney and Sears, are waiting to see how things go with Wal-Mart and waiting for prices to come down. Or they're testing the technology, as is the case at Lowe's and Home Depot.
—By Deborah Lockridge, Senior Editor
Hours of Services continued...
