FDBusiness.com

The True Cost of Wrapping Your Pallets

 Breaking News
  • Irish Distillers to Invest €150 Million in Sites in Cork and Dublin Irish Distillers has announced investment of over €150 million in its sites in Cork and Dublin to meet demand for its products as the Irish whiskey renaissance continues apace. This is accelerated by the continued growth of the company’s flagship Jameson brand, which is now in double or triple-digit growth in more than 80 markets [...]...
  • Kepak Sweeps Up Seven Awards at Blas na hEireann Irish meat processor Kepak Group has picked up seven awards at this year’s prestigious Blas na hEireann Irish Food Awards, including a Gold award for its newly launched Centra Irish Angus Sirloin Steaks with Pink Peppercorn Butter. As one of Europe’s leading food innovators, Kepak was up against the top Irish producers in a range of distinct [...]...
  • Chr. Hansen Acquires Dairy Ingredient Supplier Through the acquisition of Austrian-based ingredient supplier Österreichische Laberzeugung Hundsbichler, Chr. Hansen will further expand its enzyme production and presence into the traditional segments of specialty cheeses. Hundsbichler products are widely recognized for high quality, and this acquisition will enable Chr. Hansen to offer cheesemakers a second-to-none product portfolio in the animal rennet space. The acquisition [...]...
  • Croxsons Pulls Out All the Stops For HMS Spirits Company Leading glass packaging company, Croxsons, recently came to the aid of start-up artisan gin distiller, the HMS Spirits Company, to fulfil an urgent packaging requirement. The distiller had found itself without a closure for its latest release, Mary Rose Gin, a small batch London Dry Gin produced to celebrate Henry VIII’s famous warship. The distiller, who [...]...
  • Mains Overtaking Bottled Water Coolers in West Europe 102,500 more water coolers were installed across West Europe in 2017, marking a 3.4% increase and taking the total to 3.1 million, according to a new report from the sector’s leading specialist consultancy Zenith Global. The number of mains water, point of use coolers rose by 6.2% to reach 46.9% of the total, up from [...]...

The True Cost of Wrapping Your Pallets

The True Cost of Wrapping Your Pallets
September 05
09:00 2016

In recent weeks there has been some debate on the pros and cons of the cost of wrapping pallets from the point of view of just paying a cost per pallet rental type scheme, which seems to be anything from 70p to £2 per pallet, versus 34p to 48p when owning your own pallet stretch wrapper either by buying the machine outright of purchasing it with the help of a finance house. Owning your own machine of course allows you to purchase the film from existing suppliers competitively.

Paddy McCartney, National Sales Manager of Aetna UK Ltd, and Becky Goy of First County Finance, who have worked with Aetna clients for many years, have made the following observations on the subject.

Paddy comments: “In some ways the idea of simply paying a cost of 70p a pallet seems a reasonable however the more pallets you wrap the more it costs you. A part pallet and a film break during a cycle will also count as a pallet wrapped at 70p.

* 50 pallets/day is 12,000 pallets/year and the cost would be £8,400.00/year.

* 125 pallets/day is 30,000 pallets/year and the cost would be £21,000/year.

AetnaAugust2016“You are however locked in to a contract, if your business grows then the fixed cost of rental can become a real burden for your business. Most financial commentators are saying that the UK economy is now on the turn after four long years of relative hardship, so to put yourself into a position of stifling growth could end up being a double whammy on your business.”

Paddy continues: “I would like to outline some observations on the above.”

Costings

“For a customer wrapping 50 pallets a day this amounts to 12,000 pallets per year. If a customer takes a 3-year lease purchase with an Aetna 3 year parts warranty, this will cost £224.69 a month. The machine amortised on an annual rate of 12,000 pallets would then cost 22.5p per pallet with film costs of under 25p per pallet, a total cost is 47.5p per pallet.”

* 12,000 pallets/year = £5,700.00.

“If the customer was producing 125 pallets a day, 30,000 per year, the same machine cost would reduce to 9p per pallet and even if you kept the film cost the same this would bring the cost down to 34p per pallet.

* 30,000 pallets/year = £10,200.00.

“At the end of the lease you own the pallet wrapper. Of course this means that no further payments are made for the machinery and the cost per pallet falls to under 25p/pallet.

“As you can see from the above examples continually paying a fixed fee of 70p per pallet can be very costly. Over the short term it may seem convenient but by making the comparison with leasing a machine and arranging your own supply of film the ‘pay per pallet scheme’ is very detrimental to cash flow and budgets.

“Furthermore, the long term costs of paying per pallet show that customer’s could actually end up paying for the machinery several times over.”

Becky Goy continues: “The computations clearly show the lease purchase option is of real benefit to any user, giving complete control over where you buy the film, and after sales and service support of a company that has to-date produced 130,000 machines. We have worked closely with Aetna UK helping customers with Lease options, and it is by far the most cost effective solution for any business now and in the future.”

About Author

mike

mike

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • October 18, 2018Future Food-Tech London - Marketing Partnership
  • October 21, 2018Int'l Food Products Exhibition (Sial)
  • October 25, 2018Italian Espresso Coffee Show (TriestEspresso Expo)
  • October 25, 2018Finnish Food Fair
AEC v1.0.4

Jobs: Logistics

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber





Subscribe Here



Advertisements