PepsiCo turns to plastic

PepsiCo turns to plastic More food shippers replace wood pallets with iGPS platform.

By Chris Gillis

      PepsiCo said it will replace its wood pallets with a plastic variant, citing food and workplace safety concerns and increased environmental awareness within its own operations and those of its retail customers.
      The beverage giant's Gatorade, Tropicana and Quaker Food business units will specifically use plastic pallets provided by Intelligent Global Pooling Systems (iGPS), an operator of the world's first all-plastic pallet rental service with embedded radio frequency identification tags.
      'As of April 1, 2009 the Quaker and Gatorade business units will begin integrating iGPS pallets completely across all SKUs (stock keeping units) into their networks, with the expectation of shipping exclusively on the iGPS platform as soon as all inventory on wood pallets turns,' PepsiCo said in a March 20 letter to its customers. 'The Tropicana chilled business will convert beginning May 1.'
      iGPS, based in Orlando, Fla., estimates that it will supply more than 3 million pallets to PepsiCo and its units annually.
      Gatorade, Propel and Quaker products have been increasingly shipped on iGPS pallets since June 2007. PepsiCo praised iGPS for working 'collaboratively with shippers and receivers to revolutionize today's supply chain.'
      The company specifically noted that iGPS pallets have a significantly lower burn rate than wood pallets, and are fully edge rackable (with 2,800 pounds of capacity) and 20 to 27 pounds lighter than the average wood pooled pallet. 'If an iGPS pallet should become damaged, it will be remolded into new ones, making its useful life indefinite,' PepsiCo said.

iGPS operates the world's first all-plastic pallet rental service with embedded radio frequency identification tags.

      'The iGPS pallet is more uniform in size (48 inches by 40 inches) and is significantly more durable and hygienic than the typical multiuse wood pallet,' the company's letter said. 'The composition of the plastic pallet will improve the level of product integrity and will increase durability while reducing susceptibility to damage. Additionally, each iGPS pallet contains a unique RFID/bar code tag allowing for individual asset tracking through your own supply chain if desired (although it is certainly not a requirement).'
      iGPS is a relative newcomer to the pallet industry, starting operations three years ago. Pegasus Capital Advisors, a private equity fund manager with offices in New York and Cos Cob, Conn., retains a majority interest in iGPS.
      Other food shippers, such as Borders Melon Co., Imperial Sugar, Martori Farms, Okray Family Farms, Kraft, SK Foods, Pilgrims Pride, Ocean Spray, General Mills, and Cott Corp., have gravitated to this shipping platform in the past two years for many of the same reasons as PepsiCo.
      iGPS has also started to pick up non-food shipper business. SC Johnson, a large maker of household cleaners and insect control, air fresheners, and personal care products, now uses iGPS pallets exclusively for its domestic business.

Moore

      Bob Moore, chief executive officer of iGPS, said plastic pallets generally save its users $1 to $1.25 per unit in handling costs versus the use of wood pallets. 'That's just within the company's four walls,' he said.
      At 48 pounds apiece, iGPS is quick to point out that its plastic pallets are 30 percent lighter than traditional wood pallets, saving on transportation weight and fuel cost.
      iGPS continues to enhance the technology used to track its pallets through shipper supply chains. The pallets' RFID tags can be easily read by handheld scanners. A forklift reader capability is coming soon, Moore said.
      By the end of 2008, iGPS estimates that it has expanded its U.S. pool to more than 5 million pallets, and expects that number to reach beyond 16 million pallets by 2011.
      The company has also set its sights on entering the European market in 2009. To do this, Moore said iGPS will develop two types of pallets, including a 1,200 centimeter-by-1,000 centimeter pallet and the 800 centimeter-by-1,200 centimeter 'Euro pallet.'