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Procurement

Specifications, quotes, normalisation worksheets and how to compare two prices for different products.

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3posts in this subject
2,462words written
12 mintotal reading time
5defined terms
Primer

Two prices for the same words are usually two different products.

A buyer sent us a competitor's quote asking why ours was eleven percent higher. Four questions established that the documents described materially different platforms: theirs was B-grade on a 5/3 economy deck, ex-yard, with no buyback; ours was Combo at an agreed 60/40 on a 7/5 deck, delivered, with a surplus credit. Normalised, ours was about fourteen percent cheaper per unit delivered.

Seven variables hide inside one line item: grade, board count, combo ratio, freight, tolerance, treatment and buyback. None of them are secret and most quotes omit several. The fix is a nine-row worksheet, filled in by asking rather than assuming, and one computed line — landed cost per unit delivered, net of recovery credit. That is the only number that is actually comparable.

On the other side of the same problem: a complete specification gets you a quote in one pass instead of three, a fixed part number, buffer stock held against your spec, and a sort line that starts setting material aside for you. That last effect is why standing customers get better consistency as well as better pricing. It is not loyalty, it is a sort line behaving rationally.

If you only remember five things
  • Ask for board count and grade in writing. Those two settle most of the variance in most comparisons.
  • Compare landed cost per unit delivered, net of buyback — not unit price.
  • 'Combo' without a numeric ratio is an invitation to a disagreement nobody can win.
  • Send the load case before the drawing is frozen. Half of all specs are wrong in both directions at once.
  • The non-conformance clause has real value and appears on no price comparison.
Common mistakes in this area
  1. Specifying 'heavy duty, to be safe' because nobody knows the load case
  2. Re-ordering against 'the same as last time' with no part number behind it
  3. Comparing a delivered price against an ex-yard price
  4. Treating a buyback rate quoted on A-grade returns as applying to a B-grade return mix
  5. Choosing a supplier who will not take your non-salvageable cores, and paying a tipping fee for them elsewhere
Reference

The tables behind these posts.

The same data we work from in the yard, so you can check the arguments above against the numbers.

Footprint specification — dimensions, construction, capacity, trailer fit
FootprintInchesMillimetresConstructionTop / btm boardsWeight lbDynamic loadRacked loadBoard feetPositions per 53′ van
48 × 40 GMA48 × 401219 × 10163-stringer, notched7 / 533–482,100–2,800 lb1,500–2,500 lb3730
48 × 40 heavy48 × 401219 × 10163-stringer, thicker7 / 746–583,000–4,000 lb2,200–3,000 lb4430
48 × 40 economy48 × 401219 × 10163-stringer5 / 328–341,200–1,800 lbNot recommended2730
48 × 4848 × 481219 × 12194-stringer or block7 / 5 + perimeter52–683,000–4,500 lb2,000–3,000 lb4626
42 × 4242 × 421067 × 10673-stringer, notched7 / 532–442,000–2,600 lb1,400–2,200 lb3430
40 × 4840 × 481016 × 12193-stringer, notched7 / 533–482,100–2,800 lb1,400–2,300 lb3730
48 × 4248 × 421219 × 10673-stringer, notched7 / 535–502,200–2,900 lb1,500–2,500 lb3930
40 × 4040 × 401016 × 10163-stringer, notched6 / 428–401,800–2,400 lb1,200–2,000 lb3130
48 × 3648 × 361219 × 9143-stringer, notched7 / 530–421,900–2,500 lb1,300–2,100 lb3334
Euro / EPAL 147.2 × 31.51200 × 8009-block11 + 3 bearers50–573,300 lb nominal2,200 lb nominal3340
Euro 2 / industrial47.2 × 39.41200 × 10009-block11 + 3 bearers60–703,300 lb nominal2,200 lb nominal4130
Euro 3 / half31.5 × 23.6800 × 600BlockVaries20–261,100 lbNot rated1780
Quarter / display23.6 × 15.7600 × 400Block or mouldedVaries9–14550 lbNot rated9160
Asia standard43.3 × 43.31100 × 11009-blockVaries48–602,200 lb nominal1,800 lb nominal3628
Australia standard45.9 × 45.91165 × 1165BlockVaries55–662,200 lb nominal1,800 lb nominal4026

Capacities are indicative ranges for recycled stock, not certifications — see load capacity for how the three ratings differ. Trailer positions assume the better of the two orientations on a 630″ × 98″ floor. Usable floor of a 53-foot dry van. Reefers and curtainsides run shorter and narrower.

Grading matrix — what each tier permits
CriterionGrade A / #1Grade B / #2ComboCore / as-is
Plugs permittedNoYesIn the B portionN/A — unsorted
Companion boardsNoYesIn the B portionN/A
Stringer repairNoYes, plug or plateIn the B portionN/A
Missing boardsNoneNoneNonePossible
WeatheringLightVisibleMixedAs received
Dimensional tolerance±⅜ in±½ in±½ inUnchecked
Protruding fastenersNoneNoneNonePossible
Rated loadFullFullFullUnknown
Indicative price index10062–7075–8530–45
Re-stamped with passportYesYesYesNo

Price index is relative, with A-grade set at 100, and moves with the market. Note that rated load is full on A, B and Combo alike — grade is a cosmetic and repair-history statement, not a strength one. Grades explained in full.

What actually moves the price of a used pallet
DriverWeightDirectionNote
Core availabilityHighestCounter-cyclicalSupply comes from platforms being retired, which tracks goods movement. Recycled prices can firm in a slowdown.
Freight & dieselHighDirectPallets are bulky and cheap per pound, so trucking rates move our price faster than lumber does.
New lumber indexModerateDirect, lagged ~2 quartersTransmits through new pallet prices, damped at every step.
Footprint scarcityModerateInverse to popularityAn unusual 42×42 can cost more than a common 48×48. Popularity is cheapness.
SeasonalityModeratePeaks Sep–OctHarvest, retail build and construction overlap in eight weeks.
Grade mix in the poolLow–moderateWidens the A/B spreadA hard winter or a beaten-up inbound stream lowers A-grade yield.
Treatment & certificationLowDirectA fixed adder per unit, not a market force.

Note the first row: recycled supply is harvested from platforms being retired, so it can tighten in a slowdown. Buyers tracking only the lumber index are reliably surprised. Full breakdown.

Indicative lead times by service tier
TierStock releaseRepaired stockNew buildHeat treatedSurplus pickup
Core24–48 hours3–5 business days7–12 business daysSame day on held stock48 hours, full trailer
Regular3–5 business days5–8 business days10–15 business days48 hoursNext scheduled run
On demandNext paired run8–12 business days12–18 business days72 hoursFull trailers, scheduled

Working days from a confirmed order against an agreed specification. Standing-release customers run shorter than these because we hold buffer stock sorted to their spec.

Vocabulary

The terms these posts assume you know.

Vocabulary is the cheapest performance upgrade in this industry — almost every argument we have with a new customer comes down to two people using the same word for different objects.

Full glossary
Companion board
A second board nailed alongside a damaged one to share the span. A legitimate repair; drops a pallet to B grade.
Core
An unsorted, un-repaired used pallet — raw material for a recycler. Sold by the load.
GMA
Grocery Manufacturers Association, whose 48×40 spec became the de facto North American pallet.
Plug
A lumber insert repairing a broken stringer. Structurally sound; cosmetically obvious.
Whitewood
Any non-pooled, non-rental pallet — owned outright rather than leased from a programme.
Questions

Procurement questions we get.

What should a complete pallet specification contain?

Fourteen lines: footprint and tolerance, construction and fork entry, jack access, top and bottom deck configuration, notch geometry, lumber, board thickness, moisture, fasteners, treatment, grade, and the load case. Assign it a part number and re-order against the number rather than the conversation.

Why is one quote so much cheaper than another?

Most often grade or board count — a B-grade 5/3 against a Combo 7/5 is a 30 to 40 percent difference and both can honestly be called '48×40 recycled'. Second most often it is freight, because pallets are bulky and cheap per pound and a yard thirty miles closer has a structural advantage nobody can negotiate away.

Is a term agreement actually cheaper?

Yes, and not as a favour. A standing commitment lets us sort to your specification continuously rather than scrambling when an order lands, which genuinely costs us less. It also removes lumber volatility, the September squeeze and freight-rate movement from your cost base.

Other subjects

Eleven more areas.

NoteSubject pages are reachable from the blog index and from every post rather than the main menu. The full archive lists all forty posts by year.

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