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Ikea To Cut Shipping Costs With Switch to Paper Pallets

Ikea expects to cut its transport costs by EUR 140 million ($193 million) a year when it switches to recyclable, paper shipping pallets in 2012. Businessweek reported that the new single-use, corrugated cardboard pallets - at 5.5 pounds - will be 90% lighter than their wood counterparts and capable of supporting the same weight load.

Slimmer profile and reduced weight are the main advantages of the new pallets that allow more goods to be included in each shipment. This is expected to reduce transport costs by 10 percent. However, Ikea will spend roughly EUR 90 million ($120 million) a year on paper and new forklifts.

Ikea says it currently uses about 10 million pallets to ship goods around the globe. The new paper pallets will be assembled on site by Ikea’s suppliers.

Wood pallets are generally rented from logistics companies, and are more durable when exposed to weather conditions, but Ikea says its shipments are rarely left outside.

“We hope this will be a start in making transportation systems smarter and freight as compact as possible,” Jeanette Skjelmose, sustainability chief at Ikea’s supply-chain unit, told Bloomberg.

The story notes that Ikea isn’t the only major company moving away from traditional pallets. KLM Cargo is switching from aluminum pallets to pallets made of a light-weight composite that will allow the airline to carry more freight with less fuel.

Bart King is a PR consultant and principal of Cleantech Communications.

Bart King is the principal and founder of New Growth Communications, a network of affiliated content producers and strategists serving clients in the emerging green economy. Follow him @bart_king and on LinkedIn.

[Read more about Bart King]

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