A committe of the Automotive Industry Action Group (AIAG) has created a standard for disposable and reusable packaging, which it hopes will be adopted internationally. The goal is for sizes to fit all modes, while aiming for the highest efficiency for sea containers.
According to Paul Phelps, committee co-chair and a packaging engineer for Molex, the biggest challenge to adoption could be the variety of pallet sizes and specs. However, the committee is working with global associations to gain acceptance.
“The size selected in the new standard is just slightly reduced from the current European pallet,” said Phelps. “And this size is already used by GM as a runner pallet and by Ford as a block pallet. China has no standard for pallets or trucks, so they are likely to follow if we give them something to start with.”
Miniature Precision Components’ Bob Furlo, who co-chairs a sister committe, believes the international approach will help encourage adoption. “The committee recognised that emerging markets were ready to buy in because they didn’t have groups like AIAG to give them a voice,” he said.
The committee is optimistic for international adoption although they admit that some large users will hang on to in-house standards. “Because this pallet fills 97% of ocean containers, penetration might be rapid because it would offer approximately a 10% cost reduction,” points out Phelps. “But not everyone will adopt this standard…Chrysler and Nissan, for example, have their own fleet of containers.”
Timothy Nickel, global manager, packaging engineering for Visteon and co-chair of the committee, expects that the standard should serve as the common denominator for companies who do not have a current standard.
That said, he continues, some major players already had pallet standards close to AIAG’s and could become early adopters.
Of course, adoption will be spurred on by the level of support from manufacturers. Ford, GM, Visteon, and Continental already list the AIAG standard in their guidelines. “Basically, adoption will be quick by the companies that don’t have a standard, as well as among those that realise that adopting the standard doesn’t cost a lot,” said Phelps.
Besides cost savings, Phelps says if a company can package on this pallet and send it overseas, and have the foreign company pack and return it, the pallets have the added benefit of reusability. “Currently, odd-size pallets get landfilled and have to be replaced,” he says.
Direct pallet purchase cost is not necessarily the main driver of this action, according to Nickels. “We believe that adoption of this standard will push the cost of the pallet downward a bit, but more exciting is the likely growth of a strong secondary market that will drive pallet re-use rates higher, and ultimately enable users a lower acquisition and use cost.”
Committee members say a return on investment will depend on the level of penetration in the industry. “The level of benefit will depend on how many companies within their supply chain also adopt it,” says Nickel.
The next step is for AIAG and Odette to communise carton sizes and for the committee to develop standard carton sizes and specifications.
Phelps adds that if it works well other industries might adopt the standard, too.