An arcane technical bulletin on sprinkler systems ignited a firestorm among pallet users before being withdrawn this spring. But the controversy continues to smolder.
Susan Lacefield has been working for supply chain publications since 1999. Before joining DC VELOCITY, she was an associate editor for Supply Chain Management Review and wrote for Logistics Management magazine. She holds a master's degree in English.
It's not every day that an arcane technical bulletin sets off a storm of controversy, rumors, and finger pointing. But when the National Association of State Fire Marshals (NASFM) issued a draft code application bulletin (CAB) in September 2008, it caused just such a flare-up in the pallet community.
The source of the controversy was the humble wood composite pallet—or to be precise, the question of whether it could legitimately be classified as a wood—as opposed to plastic—pallet for purposes of fire code enforcement. That may sound like a semantic distinction, but it has big implications for DCs that use these pallets. A change in classification to plastic (wood composite units contain a plastic resin) would raise the units' fire rating, meaning they'd require higher-capacity (read: costlier) sprinkler systems to protect them.
Fears that they might be forced to retrofit their facilities with expensive new sprinklers sparked an outcry from several large shippers and groups like the National Wooden Pallet and Container Association (NWPCA). At a meeting in May, the NASFM attempted to quell those fears, offering public assurances that it had no intention of pushing for new rules or enforcement practices. Although the hubbub eventually died down, the incident pointed up how much confusion remains when it comes to pallets and fire safety.
The spark
The publication that sparked the incident was not a law or even a fire code, but rather a guide for fire inspectors. Titled "Pallet Fire Loading Impact on Sprinkler Design," the bulletin was written to address issues relating to compliance with section 13 of the National Fire Protection Association (NFPA) standard, which lays out requirements for installing automatic sprinkler systems.
Designing a sprinkler system to the NFPA standard is a complex calculus that involves many variables: floor area, the type of commodity stored, and the type of pallet the product is stored on, to name a few. But that last variable is sometimes overlooked, according to the NASFM. "When automatic fire sprinkler systems are designed pursuant to NFPA 13, the type of pallet intended to be used is a factor that is considered," says Jim Narva, chief project manager for the NASFM. "Changing the type of pallet that is used can have unintended consequences that affect the fire protection and the capability of the system."
What caused all the uproar was a section in the NASFM bulletin that pointed out that the "wood pallets" referred to in the NFPA standard are different from the wood composite units used widely today. The NFPA defines wood pallets as pallets made of pure wood with metal fasteners. Wood composite pallets, by contrast, are formed of sawdust held together with adhesives made out of a plastic resin called formaldehyde urea, the NASFM noted in the bulletin. That comment raised concerns that the NASFM considered composite pallets to be a variety of plastic pallet, and led to worries that wood composite pallets might be regulated as plastic pallets at some point down the road.
Narva insists that the association had no such intentions. "NASFM has been misrepresented as in some way proposing changes to the existing codes and standards or re-interpreting them; that is not what we are doing and that has never been our intent," he says.
In the end, the NASFM withdrew the CAB from its Web site. It also formed a committee to help rewrite the CAB to reflect only what's in the existing fire codes.
What does this mean for pallet users? For practical purposes, nothing. No company is going to have to upgrade its sprinkler systems, nor is anyone suggesting that they might be required to do so in the near future. However, the controversy does highlight the need to understand—at least on a basic level—the implications of the type of pallet you use for the safety of your facilities, your employees, and the surrounding community.
Total meltdown?
As for why fire codes treat plastic pallets differently from wood, it's all in the way the material burns. Although plastic may take longer to ignite than wood, plastic products (if they aren't treated with a flame retardant) burn hotter and faster than wood products do. And when heated, plastic tends to melt and run like lava.
"Plastic commodities typically produce higher-challenge fires and therefore require sprinklers that deliver more water," explains Jim Lake, senior fire protection specialist for the NFPA.
If a plastic pallet is treated with a fire retardant, however, it may be exempt from requirements for higher-capacity sprinklers. To receive that exemption, the pallet manufacturer must have its pallets certified by a testing laboratory, like Underwriters Laboratories (UL) or Factory Mutual (FM) Approvals.
The testing laboratory will subject the pallets to a 30minute burn test in a controlled environment. If the pallets are found to perform as well as or better than wood, they will receive an FM 4996 Approval or a UL 2335 Listing. For example, all of the pallets used by pallet pooling company iGPS have received a UL 2335 Listing, says Bob Moore, the company's CEO. "Our pallet just doesn't burn at all," he says. "It smokes a little bit." (That's not to say that fire-retardant plastic isn't without its own controversies. See sidebar, "another firestorm in the making?")
Name game
So why not simply declare the wood composite pallet to be a variety of plastic pallet, subject to the same requirements as plastic units? For one thing, calling wood composite plastic is stretching things a bit. According to pallet pooler CHEP, there's actually very little plastic in wood composite-block pallets; they are 95 percent wood.
Furthermore, not all plastics are the same. The plastic in the adhesives used in the wood composite blocks is known as a thermoset. "A thermoset doesn't flow like lava; instead, it chars up on the outside," says David Deal, director of product services and industry affairs for CHEP. This means that wood composite blocks react to fire the same way pure blocks of wood do, he says. To confirm this assertion, the NASFM is reviewing the latest evidence as part of the process of revising the CAB.
Then why not just revise the standard to state that wood composite pallets should be considered to be wood pallets? Lake says an NFPA technical committee did review a proposal to change the definition of wood pallets in NFPA 13 during a previous revision cycle but decided it was unwarranted at the time. He adds, however, that the technical committee would be willing to revisit the issue if the NASFM's research shows a compelling reason to do so.
Several pallet suppliers say the confusion surrounding fire performance could be eliminated if all pallets were simply required to undergo a burn test and certification process. "There should be a 'meets and exceeds' standard," says Steve Letnich, vice president of sales and marketing of steel pallet manufacturer Worthington Steelpac. But others disagree, contending that testing would be unnecessary as well as burdensome and expensive.
In the absence of such standards, what should conscientious DC managers do? Since different states have different fire codes and regulations, it's best to work closely with local officials to make sure you stay on the right side of the law.
"Basically, the best thing they can do is go to their local fire marshal and ask questions before they build a building, before they talk about what they're going to put in a building," says Letnich, "so they know exactly what type of sprinkler system they're going to require."
another firestorm in the making?
Just as one controversy is being put to rest, another is flaring up. The focus this time, however, isn't wood pallets but plastic ones that use the fire retardant deca-bromine.
Some brominated flame retardants have been linked to health risks like nerve damage and thyroid problems. In fact, fire retardants using pentabromine and octa-bromine have been pulled from the market because of their toxicity. Some researchers say that deca-bromine breaks down into these more toxic forms and that the chemical then leaches into the environment. These concerns have led several states to restrict the use of deca-bromine.
Plastic pallet pooler iGPS, however, disagrees with that assertion, countering that deca-bromine is encapsulated in the resin and that it does not off-gas. The company says that the European Commission's environmental protection authorities evaluated more than 1,000 scientific studies and concluded that there was no need for risk reduction measures related to the use of deca-bromine.
The debate continues. In the meantime, plastic pallet users would be wise to keep an eye on the issue and discuss potential repercussions and alternatives with their pallet companies.
Congestion on U.S. highways is costing the trucking industry big, according to research from the American Transportation Research Institute (ATRI), released today.
The group found that traffic congestion on U.S. highways added $108.8 billion in costs to the trucking industry in 2022, a record high. The information comes from ATRI’s Cost of Congestion study, which is part of the organization’s ongoing highway performance measurement research.
Total hours of congestion fell slightly compared to 2021 due to softening freight market conditions, but the cost of operating a truck increased at a much higher rate, according to the research. As a result, the overall cost of congestion increased by 15% year-over-year—a level equivalent to more than 430,000 commercial truck drivers sitting idle for one work year and an average cost of $7,588 for every registered combination truck.
The analysis also identified metropolitan delays and related impacts, showing that the top 10 most-congested states each experienced added costs of more than $8 billion. That list was led by Texas, at $9.17 billion in added costs; California, at $8.77 billion; and Florida, $8.44 billion. Rounding out the top 10 list were New York, Georgia, New Jersey, Illinois, Pennsylvania, Louisiana, and Tennessee. Combined, the top 10 states account for more than half of the trucking industry’s congestion costs nationwide—52%, according to the research.
The metro areas with the highest congestion costs include New York City, $6.68 billion; Miami, $3.2 billion; and Chicago, $3.14 billion.
ATRI’s analysis also found that the trucking industry wasted more than 6.4 billion gallons of diesel fuel in 2022 due to congestion, resulting in additional fuel costs of $32.1 billion.
ATRI used a combination of data sources, including its truck GPS database and Operational Costs study benchmarks, to calculate the impacts of trucking delays on major U.S. roadways.
There’s a photo from 1971 that John Kent, professor of supply chain management at the University of Arkansas, likes to show. It’s of a shaggy-haired 18-year-old named Glenn Cowan grinning at three-time world table tennis champion Zhuang Zedong, while holding a silk tapestry Zhuang had just given him. Cowan was a member of the U.S. table tennis team who participated in the 1971 World Table Tennis Championships in Nagoya, Japan. Story has it that one morning, he overslept and missed his bus to the tournament and had to hitch a ride with the Chinese national team and met and connected with Zhuang.
Cowan and Zhuang’s interaction led to an invitation for the U.S. team to visit China. At the time, the two countries were just beginning to emerge from a 20-year period of decidedly frosty relations, strict travel bans, and trade restrictions. The highly publicized trip signaled a willingness on both sides to renew relations and launched the term “pingpong diplomacy.”
Kent, who is a senior fellow at the George H. W. Bush Foundation for U.S.-China Relations, believes the photograph is a good reminder that some 50-odd years ago, the economies of the United States and China were not as tightly interwoven as they are today. At the time, the Nixon administration was looking to form closer political and economic ties between the two countries in hopes of reducing chances of future conflict (and to weaken alliances among Communist countries).
The signals coming out of Washington and Beijing are now, of course, much different than they were in the early 1970s. Instead of advocating for better relations, political rhetoric focuses on the need for the U.S. to “decouple” from China. Both Republicans and Democrats have warned that the U.S. economy is too dependent on goods manufactured in China. They see this dependency as a threat to economic strength, American jobs, supply chain resiliency, and national security.
Supply chain professionals, however, know that extricating ourselves from our reliance on Chinese manufacturing is easier said than done. Many pundits push for a “China + 1” strategy, where companies diversify their manufacturing and sourcing options beyond China. But in reality, that “plus one” is often a Chinese company operating in a different country or a non-Chinese manufacturer that is still heavily dependent on material or subcomponents made in China.
This is the problem when supply chain decisions are made on a global scale without input from supply chain professionals. In an article in the Arkansas Democrat-Gazette, Kent argues that, “The discussions on supply chains mainly take place between government officials who typically bring many other competing issues and agendas to the table. Corporate entities—the individuals and companies directly impacted by supply chains—tend to be under-represented in the conversation.”
Kent is a proponent of what he calls “supply chain diplomacy,” where experts from academia and industry from the U.S. and China work collaboratively to create better, more efficient global supply chains. Take, for example, the “Peace Beans” project that Kent is involved with. This project, jointly formed by Zhejiang University and the Bush China Foundation, proposes balancing supply chains by exporting soybeans from Arkansas to tofu producers in China’s Yunnan province, and, in return, importing coffee beans grown in Yunnan to coffee roasters in Arkansas. Kent believes the operation could even use the same transportation equipment.
The benefits of working collaboratively—instead of continuing to build friction in the supply chain through tariffs and adversarial relationships—are numerous, according to Kent and his colleagues. They believe it would be much better if the two major world economies worked together on issues like global inflation, climate change, and artificial intelligence.
And such relations could play a significant role in strengthening world peace, particularly in light of ongoing tensions over Taiwan. Because, as Kent writes, “The 19th-century idea that ‘When goods don’t cross borders, soldiers will’ is as true today as ever. Perhaps more so.”
Hyster-Yale Materials Handling today announced its plans to fulfill the domestic manufacturing requirements of the Build America, Buy America (BABA) Act for certain portions of its lineup of forklift trucks and container handling equipment.
That means the Greenville, North Carolina-based company now plans to expand its existing American manufacturing with a targeted set of high-capacity models, including electric options, that align with the needs of infrastructure projects subject to BABA requirements. The company’s plans include determining the optimal production location in the United States, strategically expanding sourcing agreements to meet local material requirements, and further developing electric power options for high-capacity equipment.
As a part of the 2021 Infrastructure Investment and Jobs Act, the BABA Act aims to increase the use of American-made materials in federally funded infrastructure projects across the U.S., Hyster-Yale says. It was enacted as part of a broader effort to boost domestic manufacturing and economic growth, and mandates that federal dollars allocated to infrastructure – such as roads, bridges, ports and public transit systems – must prioritize materials produced in the USA, including critical items like steel, iron and various construction materials.
Hyster-Yale’s footprint in the U.S. is spread across 10 locations, including three manufacturing facilities.
“Our leadership is fully invested in meeting the needs of businesses that require BABA-compliant material handling solutions,” Tony Salgado, Hyster-Yale’s chief operating officer, said in a release. “We are working to partner with our key domestic suppliers, as well as identifying how best to leverage our own American manufacturing footprint to deliver a competitive solution for our customers and stakeholders. But beyond mere compliance, and in line with the many areas of our business where we are evolving to better support our customers, our commitment remains steadfast. We are dedicated to delivering industry-leading standards in design, durability and performance — qualities that have become synonymous with our brands worldwide and that our customers have come to rely on and expect.”
In a separate move, the U.S. Environmental Protection Agency (EPA) also gave its approval for the state to advance its Heavy-Duty Omnibus Rule, which is crafted to significantly reduce smog-forming nitrogen oxide (NOx) emissions from new heavy-duty, diesel-powered trucks.
Both rules are intended to deliver health benefits to California citizens affected by vehicle pollution, according to the environmental group Earthjustice. If the state gets federal approval for the final steps to become law, the rules mean that cars on the road in California will largely be zero-emissions a generation from now in the 2050s, accounting for the average vehicle lifespan of vehicles with internal combustion engine (ICE) power sold before that 2035 date.
“This might read like checking a bureaucratic box, but EPA’s approval is a critical step forward in protecting our lungs from pollution and our wallets from the expenses of combustion fuels,” Paul Cort, director of Earthjustice’s Right To Zero campaign, said in a release. “The gradual shift in car sales to zero-emissions models will cut smog and household costs while growing California’s clean energy workforce. Cutting truck pollution will help clear our skies of smog. EPA should now approve the remaining authorization requests from California to allow the state to clean its air and protect its residents.”
However, the truck drivers' industry group Owner-Operator Independent Drivers Association (OOIDA) pushed back against the federal decision allowing the Omnibus Low-NOx rule to advance. "The Omnibus Low-NOx waiver for California calls into question the policymaking process under the Biden administration's EPA. Purposefully injecting uncertainty into a $588 billion American industry is bad for our economy and makes no meaningful progress towards purported environmental goals," (OOIDA) President Todd Spencer said in a release. "EPA's credibility outside of radical environmental circles would have been better served by working with regulated industries rather than ramming through last-minute special interest favors. We look forward to working with the Trump administration's EPA in good faith towards achievable environmental outcomes.”
Editor's note:This article was revised on December 18 to add reaction from OOIDA.
A Canadian startup that provides AI-powered logistics solutions has gained $5.5 million in seed funding to support its concept of creating a digital platform for global trade, according to Toronto-based Starboard.
The round was led by Eclipse, with participation from previous backers Garuda Ventures and Everywhere Ventures. The firm says it will use its new backing to expand its engineering team in Toronto and accelerate its AI-driven product development to simplify supply chain complexities.
According to Starboard, the logistics industry is under immense pressure to adapt to the growing complexity of global trade, which has hit recent hurdles such as the strike at U.S. east and gulf coast ports. That situation calls for innovative solutions to streamline operations and reduce costs for operators.
As a potential solution, Starboard offers its flagship product, which it defines as an AI-based transportation management system (TMS) and rate management system that helps mid-sized freight forwarders operate more efficiently and win more business. More broadly, Starboard says it is building the virtual infrastructure for global trade, allowing freight companies to leverage AI and machine learning to optimize operations such as processing shipments in real time, reconciling invoices, and following up on payments.
"This investment is a pivotal step in our mission to unlock the power of AI for our customers," said Sumeet Trehan, Co-Founder and CEO of Starboard. "Global trade has long been plagued by inefficiencies that drive up costs and reduce competitiveness. Our platform is designed to empower SMB freight forwarders—the backbone of more than $20 trillion in global trade and $1 trillion in logistics spend—with the tools they need to thrive in this complex ecosystem."