FDBusiness.com

The True Cost of Wrapping Your Pallets

 Breaking News
  • HKScan Strengthens its Meals Offering With Investment in Estonia HKScan, the leading Nordic food company, plans to invest in its Rakvere unit in Estonia. The €8 million investment will go towards modernising the unit’s frying department, including the expansion of the building and the installation of new cooking and packaging lines enabling implementation of new technologies and packaging solutions. Construction is to commence in [...]...
  • Food and Drink is at the Heart of the UK’s Largest Packaging Show Packaging Innovations, Empack and Label&Print returns to Birmingham’s NEC on 28 February-1 March 2018, and is set to be the most innovative show to date. With over 290 exhibitors already signed up, the UK’s largest annual event for the entire packaging supply chain will feature the latest industry innovations and technologies, alongside a major free-to-attend [...]...
  • AGRO Merchants Group Acquires Grocontinental AGRO Merchants Group, a global leader in cold storage and logistics solutions, announced today the acquisition of UK-based Grocontinental Limited. This transaction reinforces AGRO’s position as the leading cold storage and logistics provider in the United Kingdom and Ireland, deepens its commodity expertise, and substantially enhances its value-added service offerings for customers. David Grocott and Linda Grocott, third generation owners of [...]...
  • Trade Fair and More – The Event and Congress Programme For Anuga FoodTec 2018 Resource efficiency will be the primary focus of Anuga FoodTec 2018, the leading international supplier fair for the food and beverage industry, which will be held in Cologne, Germany from 20 to 23 March 2018. Around 1,700 suppliers from more than 50 countries will be presenting their new products for the production and packing of [...]...
  • TINE to Invest €77 Million in New Jarlsberg Plant in Ireland TINE, Norway’s largest farmer-owned dairy co-operative, is to invest €77 million in a dairy with the capacity to produce 20,000 tonnes of Jarlsberg cheese a year. The goal is to secure and strengthen Jarlsberg sales outside of Norway as export supports are phased out in 2020. This will make export of Jarlsberg from Norway unprofitable. “Jarlsberg [...]...

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

  • January 8, 2018RAI Exhibition
  • January 16, 2018Sival Plant Production Trade Show
  • January 17, 2018Dutch Organic Trade Fair
  • January 17, 2018Anfas Food Product
AEC v1.0.4

Jobs: Logistics

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber





Subscribe Here



Advertisements