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27 Jan 2020 | 13:34

The hidden costs of inefficient asset tracking


When talking about supply chain cost reduction, you may think about transit time, route optimisation, or prevention of loss and damage of goods. However there’s much more that can be done, and that is keeping track of your assets.³


Whether you are a small or big enterprise, you are often dealing with re-usable pallets, tubs, bins and small containers to ship your goods. These assets can take up a significant portion of your supply chain spend if managed inefficiently.³

It is far too easy for your assets to “leak” out of the supply chain. One pallet misplaced in the distribution centre here, another never returned from a customer there. Another stuck “temporarily” in an offsite warehouse and then forgotten. Individually, these losses may seem minor, but these can soon add up to a considerable cost. ¹ In fact, the cost of replacing “lost” reusable packaging and pallets in the North American auto industry is around $750 million per year. In total, plastic pallet and container loss within the US registers between $800 million and $1.5 billion annually.²

A significant amount of assets lost is due to theft. It is estimated that each year, about 1 million pallets travel through the black market. Most of the theft Is perpetrated by an individual picking up unattended assets, but there have been cases of organised crime grinding down the assets into plastic pellets that are then sold onto plastic manufacturers overseas.¹

Although theft comes into the equation, it is believed the majority of asset loss is due to lack of visibility in the supply chain. A manufacturer of plastic pallets and other reusable packaging said “We really find that for most of our customers, 80% of what they thought was lost is actually somewhere in their own warehouse or their partners’ warehouses”.¹ The main reason for this loss is the complexity of most supply chains. Products could get damaged and diverted elsewhere with the asset it came in, or it could be sent to an offsite warehouse due to lack of storage space, or collected until there is a whole truckload to send back in one load. ¹

Regardless of how your assets are getting lost, improving the visibility of your assets is a necessity. Reusable container shortages can disrupt production, causing expensive downtime and downstream ripple effects. It can delay order processing and delivery, resulting in increased labour, freight charges and potentially lost sales. ² Not only this, a shortage of assets requires emergency purchases to replace them and often companies will increase their amount of assets to a larger size than should be necessary to ensure they do not run out.²


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¹ Lacefield, S. (2014). It's 11 p.m. Do you know where your pallets are?. [online] Available at: [Accessed 27 Jan. 2020].
² LeBlanc, R. (2015). Pallet and Reusable Loss Statistics | Reusable Packaging News. [online] Available at: [Accessed 27 Jan. 2020].
³ Sainathan, P. (2019). Attack That Sneaky Hidden Cost in Your Supply Chain: Reusable Packaging. [online] Available at: [Accessed 27 Jan. 2020]. 

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