Stacks of advantages in cage pallet use
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by John Darker, AMBIM
THE USE of cage pallets for grocery distribution may increase markedly in the next few years. Potentially, the same principle could be applied for deliveries of consumer goods to stores, supermarkets and hypermarkets.
A recent conference arranged by Super Marketing and Materials Handling News ventilated the economic a n d operating problems of cage distribution.
Many readers will have visited one of the vast hypermarkets or superstores which are now appearing in various parts of the country. The sales throughput on popular selling lines can provide a positive challenge to the transport function. Under a " systems " approach, the total economy of a distribution operation is more significant than any sectional costs. There is obvious room for experiments and pilot studies to test the feasibility of new distribution techniques.
Mr R. Harker, director of marketing, ASDA Stores, explained that a " cage " was the English name given to a unit known on the Continent as a box pallet. " It is a unit designed -to transport goods easily in bulk from the manufacturer to the retailer. When it reaches the retailer, 41 becomes a point of sale unit."
Safe, strong
Cages are built to provide the maximum amount of display for selling merchandise in a minimum amount of space. They are collapsible when not in use. Each unit, made of galvanised heavygauge wire and steel rod, is built to a rigid specification to make it safe, strong and durable.
The cage is built strongly enough to travel through a distribution network with loads of up to 300 kilograms. It is interstackable and has locating devices to ensure safety when stacked.
When closed the cage is reduced to one-third of its open height. It may be transported in multiples of up to 12 when collapsed, but locating devices must be employed to ensure safety when stacked and stability when transported.
Cage capacities vary. ASDA finds that 15 cases per unit are feasible, and in a seven-cage display unit it reckons to be able to merchandise the equivalent of 75 cases without the need for remerchandising. (A single case could display 360 individual cans of 151oz size.) At the retailing end a single cage could be used for a slowselling product while multiple "stacks " are used for fastmoving goods. In the warehousetype stores which may become the vogue; overhead racking enables the warehouse Ito be reduced in size and the space converted into valuable selling space.
Clearly, given suitably strong floor loadings, a variety of alternative methods could be employed, utilising mechanical handling aids, to stack full cages and remove empty cages.
For road transit, cages can travel two-high on standard wooden pallets though ASDA recommend stacking the cages directly on to the vehicle platform stacked two or three high, depending on type of product. Cages are normally lifted in pairs although it is possible to move four or six at a time, given long lifting forks. ASDA has pioneered the checking of cage deliveries by weight. It anticipates a life of at least 60 load journeys for the cages.
To understand the advantages of cages for a supermarket chain the road haulier needs to accept that to display 21 tons of flour — the contents of 14 cages — would take four hours while to merchandise the same quantity 'in cages takes less than 20 minutes. There is the added advantage that cages take up less room than fixed shelves in a shop.
Time again
Another example quoted by ASDA for a typical delivery of 11 cases shows a net gain of around 32 minutes, more than 23 minutes reflecting savings in merchandising time. In this example offloading and reception both take more than twice as long with cages as compared with conventional deliveries, but over six minutes are saved on the " storage" item and there is a large gain on shelf display time.
A manufacturer, using cages, gains a potential benefit of two minutes per case and adding in the merchandising benefit the total time savings amount to almost three minutes per case.
Expressed in money terms taking account of measurable " hard" savings (and " soft " savings derived from nonproductive elements) ASDA reclaimed on a total saving of 5.61 pence per case in July, 1975. 'Bearing in mind the additional floor space made available in a store and the possible total system cost savings it is easy to imagine the attraction of the cage system to a hard-pressed food industry.
Method
Mr W. Hurren, of United Biscuits Ltd, said that at the end of 1975 28 stores would be using cage pallets, and he estimated that this number would have increased to around 200 stores by 1980. United Biscuits had tried out the ASDA cage pallets and found them to be acceptable in use, but experiments with a larger "Racktainer" holding about 46 cases, proved less satisfactory. Under test, the weight of the product — 4001b of digestive biscuits —forced packets downwards and outwards against the mesh damaging some eight per cent of the product.
Mr Hurren was realistic about the costs of the cage-pallet system to a biscuit company though he foresaw an 'increase in the percentage of production channelled into a cage-pallet operation rising from 0.5 per cent to 4 per cent by 1980 and perhaps as much •as 12 per cent for digestive and chocolate homewheat biscuits. I-Ie felt that savings on packing could be eroded by the need for capital expenditure on pricing machines, automatic packing units and extra labour in controlling a nonstandard operation.
Mr Hurren noted that the proposed half Europa-size cage pallet has still not been approved by manufacturers and retailers. He wanted to see the retail trade accepting full responsibility for ownership of cages and for their sterilisation and general hygiene.
Dr David Walters, of Cranfield School of Management, noted that the cage-pallet idea originated with United States fruit growers in 1959 with much success. 'He argued that the introduction of a technique such as cage pallets could be aided by radical changes in the terms of trade. Why not, said Dr Walters, consider a discount structure based on drop size ?
The implications -of cage-pallet deliveries cover at the manufacturing end, production, warehousing and handling, inventory management, transportation, unitisation, and order communication. The distributor may be concerned with a similar range of factors as well as with instore merchandising and labour productivity.
A total systems approach may make possible improved levels of service, lower inventory costs, better warehouse cube utilisation,. improved vehicle utilisation, better return on capital.
Dr Walters speculated on the use of jointly owned facilities involving co-operation between a manufacturer and distributor. Food marketing, as well as being a complex organisation, was also of necessity flexible and changeable. To put price tags on a tin of 'beans at the end of the production line might slow things down. Shopkeepers were not keen en this necessary job, either, since it was labour 'intensive and the object of merchandising was to maximise sales within a given floor area.
Specialist hauliers
So would it make sense for distribution centres to be set up where conventionally unitisedloads would be received and converted into cage pallet loads to meet distributor requirements? Alternatively, could third parties such as specialist haulage contractors provide this type of service ?
The introduction of a national wooden pallet pool has met with much hostility, or inertia, over
the years because of the difficulty of apportioning costs and benefits. The introduction of a cage-pallet system is likely to involve a new approach to distribution costing methods, but the possible advantages are great enough to justify the trouble this will cause to all parties in h2 distribution process.
Mr Jolyon Drury, an architect with much experience of transport depot planning, speculated on the size of shop likely to be penetrated by cage pallets if the system becomes popular. Outside the superstore and hypermarket area, transport and handling problems would be 'magnified. The roll-pallet trend, using pallet trucks and tail lifts, would be reversed.
The loss of vehicle cube when carrying cages could approach 20 per cent or more; it might not be possible to load up display cages to their designed capacity.
Mr Drury contrasted the ease with which a load of palletised goods could be sheeted and roped with the problem of load security with cages. He anticipated that cages on a flat bed vehicle would be subject to greater damage in transit than goods carried in cardboard cases. If tins and other packages were made more strongly then additional costs would be incurred.
Clamping
Some cage pallet users carry the cages three high. There is a securing device developed by Caddie that clamps cages to the vehicle floor, and it is possible to clamp the cages one on each other to minimise sway.
A major problem concerns floor loading, especially when cages full of tinned goods are carried. "With in-travel hammer blow impacts," said Mr Drury. "Timber floors will not last for long. Floors will need to be chequer plate or alumni= strip, and then will have to be carefully designed."
One idea is to position chassis members under the feet point of cages, but there is the problem of part loads and mixed media: special-purpose vehicles would have to be dedicated to cage pallet work.
The merits of side and end loading in particular applications will have to be probed thoroughly. Mr Drury went so far as to contrast the cost of load restraint gear for a 12m trailer at £400 with the £500 costs of air suspension, to eliminate much roll and shock damage. Hence 'his feeling that cage pallets will demand purpose-built vehicles for the critical transport link.