Safer shipping: collapsed pallets can cause hidden liabilities

By Nelson Joyce & Co, 

Market expert Mr Nelson Joyce, Managing Director of Nelson Joyce & Co observes liabilities during shipment are rarely ever considered by staff preparing pallets for transport in spite of the fact that the ramifications of just one breakage can cripple a business financially.

With personnel safety risks and third party product damage identified as the two main areas of potential trouble, it is now more important than ever to properly secure pallet contents so they remain stable during handling and transport, says Mr Nelson Joyce.

He also cites commercial expectations of top retailers, who readily reject a pallet of inbound goods simply because the stretch wrap is torn or aesthetically challenged; additionally their receiving dock staff can be put at risk.

According to Mr Joyce, liability is a major issue with freight insurance companies, particularly because Australia moves its freight over such long distances, using multiple warehouses, trucks, rail and various materials handling technologies. During shipment, the pallet is exposed to many different operating environments and in almost all cases is moved alongside stock belonging to other organisations. Using cheap, weak and risky stretch wrap, which can break during normal movement only gives insurance companies an angle for grey areas.

A very likely risk scenario is during truck movements. Imagine a palletised freight, wrapped with inferior stretch wraps, breaking inside a moving pan-tech trailer and sending individual boxes or units flying around the inside over a very long distance. While the damage to one’s goods as well as other people’s stock could be enormous, it is highly unlikely that the insurance companies will pay up without a fight. One could easily end up liable for the damage because in the insurance agreement fine-print, the insurer may be waived of responsibility under such circumstances.

Cargo insurance is renowned for not paying up if damage is caused by the failure of someone’s pallet wrapping. Historically, there are many situations that may not result in liability for the insurer or its underwriter, including goods being too heavy for the pallet or the pallet being inadequate.

Stretch wrap breakage can also cause injury to forklift drivers and depot stuff during unloading and loading. Unless the damage can be proved to have been inevitable or unavoidable, the owner of the poorly prepared pallet is likely to shoulder culpability.

Mr Joyce explains Australia’s powerful national retail chains have very strong guidelines that are rarely flexible. For instance, one of these clearly states in its suppliers’ charter that all incoming pallets ‘must be wrapped with a double layer of clear stretch-wrap, which must also include the pallet itself’.

This arms the retailer with a lot of power to turn back pallets simply because they don’t look good enough which, in fairness, is arguably a healthy course of action as a damaged pallet can easily be construed as tampered, pilfered or even potentially exposed to contaminants.

It becomes even more challenging to companies shipping fresh produce, which can be quality-affected by stretch wrap. In such cases there is an insistence on ventilated stretch wrap to ‘secure the product/pallet’, thereby again shifting power to the recipient.

Either way, the significant point is that any pallet must remain intact during transit; otherwise lawyers, insurers, transporters and customers will all do their utmost to deflect liability for damage or loss.

Nelson Joyce has been consulted many times to aid in product protection issues. In a recent challenge, it used Axpol Stretch for firm pallet hold and security of transit to reduce a company’s exposure to damage claims and stock outs.

Conforming to rigid specifications, Axpol Stretch wrap is thin but very strong with elongation and tensile strength, therefore reducing the cost per pallet.

Being high clarity, noiseless and clean to use, stock identification is easy and accurate bar-code scanning is achieved. High puncture resistance reduces downtime online from film breaks caused from rough corners on pallets.

Mr Joyce concludes that a simple and small investment into a higher category of product quality can ensure one will never have a problem.