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Strong, sustainable and waterproof cardboard pallet that equals load carrying capacity of wooden pallets

Periodic Reporting for period 1 - UPALET (Strong, sustainable and waterproof cardboard pallet that equals load carrying capacity of wooden pallets)

Reporting period: 2017-03-01 to 2017-07-31

•What is the problem/issue being addressed?

Airlines, railroads and trucking companies use pallets to haul products that we consume.
Since their invention in the twentieth century, their use has dramatically supplanted older forms of crating like the wooden box and the wooden barrel, as it works well with modern packaging like cardboard boxes and intermodal containers commonly used for bulk shipping. Pallets make it easier to move heavy stacks. Loads with pallets under them can be hauled by forklift trucks of different sizes, or even by hand-pumped and hand-drawn pallet jacks. Movement is easy on a wide, strong, flat floor. The greatest investment needed for economical pallet use is in the construction of commercial or industrial buildings.
Currently, the main pallets that are used for shipment in the industry are wooden pallets, closely followed by plastics pallets, and finally cardboard pallets. However, all of them have drawbacks:
Wooden pallets:
• Are heavy, big and come in a few standard sizes which limit the available truck bed volume: companies need more trucks to transport the same amount of product.
• Are not compliant with ISPM 15. They must be debarked and then heat treated or fumigated with methyl bromide and stamped or branded with a mark of compliance. The consequence is higher costs of production.

Lighter solutions as plastic or cardboard pallets:
Plastic pallets:
• Are very expensive (up to 6 times more expensive than their wood equivalent).
• Their manufacturing process is costly (consumes 5 times more energy and 8 times more raw materials than wooden/cardboard pallets) and non-eco-friendly (releases a lot of emissions and generates more waste).
• Require maintenance and cleaning of each pallet after their use.

Cardboard pallets:
• They cannot withstand certain weather conditions, mainly wet conditions.
• Are only suitable for light loads: maximum 750 kg.
• Need a special-purpose forklift attachment to correctly handle them with minimal difficulty and damage.

•Why is it important for society?

Currently, 90% of pallets are made of wood. However, there is a trend pointing to cardboard as the natural replacement in the short term. The industry is challenged to ensure full sustainability of products in manufacturing, transportation, logistics and recovery. The only material that would fulfil this challenge is cardboard.
Drawbacks of the current solutions are:
• Wooden pallets (90% of those used): i) Expensive and heavy; ii) Difficult to recycle; iii) Require fumigation to prevent entry of pests to the country of destination according international regulations ISPM-15.
• Pallets of cardboard or paper (5% -10%): i) Don’t resist heavy loads; ii) Problems resulting from moisture.
• Plastic pallets (2%): i) Expensive; ii) High index of breaks; ii) Non recyclable; iii) Some contaminant components.
UPALET is a cost-effective and recyclable cardboard pallet that is as strong and can carry just as much as wooden EUR pallets, yet it is 13% lower and 80% lighter. UPALET will ensure that trucks, ships and airplanes shipments are much closer to 100% than currently is the case (e.g. 40t trucks: from 97% to 99.5%) (Note that a 40t truck may carry up to 33 wooden EUR pallets: 891 kg of dead weight).
ALPESA addresses the EU Transport Challenge by reducing the number of vehicles required to transport the same amount of product due to the replacement of wood and plastic pallets with UPALET pallets. As a consequence, we will minimise transport’s systems’ impact on climate and the environment; with a substantial reduction of traffic congestion; and with a substantial improvement in the mobility of freight.

•What are the overall objectives?

A total of 4 global objectives have been set out for the proposal as a whole:
1) Adjusting the pallet specifications for the transport of different products: consumer goods, fresh food, retail, manufacturing and automotive.
2) Upscaling of the UPALET production from pilot plant to industrial plant, in order to produce 1 UPALET/22 s.
3) Demonstration of UPALET in the transport of consumer goods, fresh food, retail, manufacturing and automotive (real operating environment).
4) Draft and deliver a comprehensive, investor-ready business plan,
1. In-depth market analysis to determine the acceptance of the proposed solution among transport companies (airlines, railroads and trucking companies) and among many industries like consumer goods, fresh food, retail, manufacturing and automotive.
2. Technical feasibility analysis to identify the technical gaps that might exist between the current state of development of our pallet and the clients’ requirements of the industries considered in the market analysis.
3. Business plan: A detailed five-year business plan will be drafted which will enable the validation of the preliminary hypothesis (see section 2) and pave the way for a detailed business plan showing the business model, route-to-market, penetration and marketing strategy, the approach to getting UPALET customers or clients on board as strategic partners, market inception, and full-scale commercialisation.

The result of the Feasibility Study has created understanding about:

- The interest among the different industrial sectors in the use of cardboard pallets.
- What conditions must be met for a pallet to be attractive to customers.
- The technical solutions that will get the whole value chain as economical and effective as possible.
- How profitable the segment of the pallet production will be for ALPESA.

The conclusions from this study show that our business idea has an enormous commercial potential and our project shall continue with a Phase 2 project that co-funding actions needed prior to UPALET market entrance. Furthermore, we have identified during this 5 months a growing interest to exploit our technology.

Since we want to achieve different markets, the technology developed by ALPESA to bring UPALET to the market can be the door to open a new business area for ALPESA.

But first of all, the following actions are still needed:

To finalise the industrial plant, located in Tavernes de la Valldinga, in Valencia Region.

- To validate UPALET at the required industrial conditions defined by our potential final users, once all required equipment is being acquired, installed and tuned.
- Since we are looking to stand out among our competitors we need to certify the sustainability of UPALET through an eco-design approach (LCA, LCC, SLCA) and assure the recyclability of our product.
- To reach different European markets we need to Reduce the costs of the UPALET production plant between to €300K-€400K).
- We need to reduce the time to set up the production plant.
- Initiating ambitious promotional actions, including presentation of UPALET in the main fairs in Spain, Germany, UK, Sweden, Italy, France and US (see Table 4).
- Tech watch of any related technologies and determination of our IPR strategy to reinforce our competitive advantage over time.
- Revision and updating of financial forecasts.
- Seeking of additional funding from private investors in Spain or alternatively, in other European nations and US.
- We need to implement a new business model to commercialise our technology.
Currently, there are several models of cardboard pallets on the market, but none of them offer guarantees of resistance as the ones expected to achieve after the completion of this project. The main difference and advantage of UPALET lies in the design of the pallet: while other manufacturers use corrugated cardboard to form the rungs, ALPESA uses cardboard tubes or mandrels, which makes it tougher and more resistant to all kinds of punches.

One of the major constraints is the manufacturing cost. There are currently no companies able to manufacture a cardboard pallet that improves the performance of the wooden ones, and whose manufacturing cost makes it profitable to market. Current solutions consist of reinforcing the pallet, using complex designs that make the product more expensive and difficult to manufacture in series and in an automated manner.

Socio-economic impact

ALPESA will create in 4 years 2024 20 direct new jobs and will generate an accumulative revenue of more than €20M from the direct sales of UPALET. We expect to increase at least per 12 this impact, through our future clients in Europe by licensing UPALET’s technology.

Transport: UPALET is lighter than its equivalents in wood or plastic existing in the market, thus reducing costs, consumption of fossil fuels and CO2 emissions associated with the transport of the merchandise, even allowing its transport by air. In a 40-ft. truck, for the same load to be transported, the total weight when using Europalets represents an increase of more than 8% compared to the alternative of UPALET.