Season 5, Episode 189 : Cutting Construction Waste

Will: [00:00:00] Hi, and welcome to Sustainability Solved, the sustainable business podcast. I'm Will Richardson, the founder and CEO of the Green Element Group, incorporating Green Element, Compare Your Footprint, and of course, Sustainability Solved. We've been empowering organizations to manage their environmental impacts for a just and sustainable world since 2004.
Charlie: And I'm Charlie Luxton, an architectural designer who focuses on sustainable housing. Today, we're talking about pallets. Every year, the building industry uses 20 million of them, the equivalent of 6, 000 acres of forestry, but only 10 percent are ever recovered or reused. The rest go to landfill. [00:01:00] Paul Lewis of Pallet Loop wants to change that.
He's created the first reusable. trackable and returnable pallet for the construction industry. Welcome Paul.
Paul: Hi there. Good afternoon, Will and Charlie. Thank you for having me on.
Charlie: Great to have you. So can you, can you tell us a little bit about your background and why pallets have become your, well, become your thing?
Paul: Yeah, I guess, sadly, I was, I was kind of brought up in nappies around pallets. So we, we, my father, um, was a time study engineer, so he was very much focused on, on time and motion. I worked. Uh, there's a kind of full circle thing here. He worked for, uh, Jewsons who were a timber merchant based in Great Yarmouth, where we're originally from.
And he was a time study engineer for their production. We were manufacturing windows, doors, but also pallets. So Jewsons many years ago, manufactured timber pallets. So kind of go forward to 2001. I went off to [00:02:00] university, studied accounting and finance. And, uh, came out and my brother was already in the business.
He sucked me into the family business and, uh, and that was it. You know, the next thing is we, we kind of grew from a business that was, that had 40 people to over 350 people over 15 years. And, uh, and we were manufacturing, you know, 150, 000 pallets a week for industry. And that wasn't just construction industry.
That was, that was pharmaceutical. That was agricultural food, a chemical. 50%, I would say of what we were manufacturing was ultimately for construction product manufacturers. So through that, I guess I just, you know, I was, I was seeing the, the waste, um, that, that, and the problems that, um, the first hand and the complexity of the specifications that we were, that we were pushing in from, from the front end, you know, upon the request, you have on.
Every manufacturer had their own specification that they wanted us to build. And so, um, we built them and, [00:03:00] uh, it was 2015 when we exited that business. And I guess I had the wonderful, um, luxury of time for a year or so. Um, which allowed me the, uh, headspace to, to think about what was next for me. And, um, that was where the idea for PalletLoop was ultimately born back in 2017.
Charlie: So it sounds like it's quite a simple idea. You, you make a pallet. You know where it goes and you get it back. I have a feeling it's far more complex than that because no one has done it. What are the complexities and what other kind of, um, barriers you've got to this seemingly fairly obvious change?
Paul: You know what? It's, it's, it's, it's not massively more complicated than you've just spelled out, if I'm honest. Complexity is born in the, I, I mentioned a moment ago, complexity. Let's take an example of a successful pooling system, and we see it in the supermarket chain. So if you walk into a supermarket and you look down [00:04:00] below the product that your eyes naturally drawn to, but look down below that, and you'll see maybe a blue or red or brown pallet, just those three specifications or three types of pallet that are all effectively the same specification.
There's nearly 200 million movements a year around the. FMCG, so the fast moving consumer goods, the retail grocery sector, and they achieve a 98 percent reuse rate on, on those pallets. So as you said, you know, construction, 20 million, less than 10%. And, and that makes you ask the question, well, why, what, what, what's, what's going on there?
Well, 3000 specifications are coming in to this supply chain across the 20 million pallets, which, which means that it's just broken at the front end. You know, it's dysfunctional. Yeah. How can you create something standardised out of the backend of that? Uh, when [00:05:00] every manufacturer is using their own specification dedicated to their specific production lines.
And that was probably ultimately the starting challenge was to, to speak to manufacturers and understand. Can they standardize so standardization was key here. Um, but then it was a case of getting the, the key stakeholders in the industry to buy into the thought processes of actually doing something different.
And yeah, let's face it. The construction industry will admit themselves, they're not the best sector, uh, uh, at change. And so definitely trying to get people into a different mindset for that change has been, has been a challenge.
Charlie: Because you say there are 3, 000 different specifications and that's literally just to do with the fact that people just go, I want it to carry this amount of weight, I want it to be, because the sizes are fairly standard, is it, am I correct or?
Paul: No.
Charlie: No, nothing standard. Oh, okay.
Paul: No, that's no problem. You know, so, so.
Charlie: Absolutely nothing standard.
Paul: Nothing standard. Anything from 600 [00:06:00] millimeters up to 4. 8 meters, you know, it's, it's really, it's very, and, and that is the challenge. You know, if you want to supply, whether you want to supply baked beans or whether you want to supply crisps or ironing boards into a supermarket, they will say, you have to use that pallet.
If you don't use it, don't supply us, or we'll fine you for making our supply chain inefficient because we've got standardization throughout our supply chain, the construction industry have never had that challenge. You know, there's never been that challenge from the end users back up saying that this, this doesn't work for us.
And I guess this is what we're inviting the industry to consider is actually, is there a better way, but that has to. That has to ultimately be driven by the manufacturer for them to make the physical change onto the power. But of course they want to know that the customers are open to that, to that change as well.
So [00:07:00] we've had to spend, you know, as you, you know, it's, it's been, I suppose, 2017 was when, when we came up with the idea, 2019 was when we started to actually physically fund the business and said, right, let's go for this and took on the first employees. And we've just. 10 weeks ago, supplied our first pallet.
So his pin, it's been quite a long time to coax all the stakeholders along, whether it's the, the end users, the principal contractors, the house builders, the merchant sector, or, and in turn, then the manufacturer to, to get everyone lined up. And it's, it's, that's been really difficult because people in this sector I've found are working in silos.
And so breaking that down has been a challenge.
Will: I can. I understand kind of how you end up with three, 3000 odd variations because, you know, someone thinks, Oh, we could be, this should be better. This could be better. This could be better, et cetera, et cetera. With that in mind, and the [00:08:00] fact that someone somewhere has designed a pallet to be better, what are the downsides of you standardising it?
Because or are there downsides? Because if someone thought it was to be better than the downsides are, it's not as good as the one before.
Paul: You know what, Will, I don't, I just don't think anyone's ever been challenged. So I, I, you know, if you, if you go into a manufacturing business and say, what, why ask the question, why are you using that specification?
They'll, they'll have to go and pull out a manual from 1972 as to when, when that, that manufacturing line was first put in and they'll, they'll realise that they just made a pallet that fitted the line. It was, it was an afterthought. And I think that this is the point is we. We look at a lot of waste is a design flaw and that's, and I think that it was just not designed in at the front end because there was no requirement for that to happen.
Um, so it is, you know, I always kind of, when I'm, you know, inviting people to change, I, I [00:09:00] always ask them to consider if we had a, a blank piece of paper, you know, and you look at a successful model, it's achieving 98 percent return rate over here. Would you, would you design the system that you've ended up with in the construction industry?
And of course the answer to that is, is always no. And, and the starting point of that is always, we need to become more standardised in, in, in our approach.
Will: It reminds me of that wonderful Facebook meme that's, um, explains why an American railway is the gauge it is, and it goes back to trams. And then it goes back to carts.
Then it goes back to horses pooing basically, and over 1300 years, we have ended up with trains that are on a particular gauge because of the way that horses pooed in the Roman times. Because each time there was an iteration, but the iteration was done on the one before.
Paul: Yeah. And, [00:10:00] and, and it wasn't challenged.
No one asked the question, well, why are we doing this? It was just that it was, it's not a big deal in many people's worlds. It's a big deal in my world. I'm very passionate about getting this right. But. You know, for some people it's just a pallet. And I think that, you know, this industry, this sector has been literally stepping over this problem for 20 or 30 years. And it's become just a part of the furniture. You know, you go to a, you go to the back of a supermarket and everything's stacked up neatly. You go to a building site and there's a, there's a pallet graveyard in the corner somewhere, and that's just acceptable.
Charlie: I mean, that's the thing. If you went to, went to any building site and said, how much of a pain in the arse are all of these different pallets that you then have to try and get rid of in the old days, you'd just burn them, but now no. So then you're paying for skips to take them away as having paid for them to be delivered.
And I think most builders would go. Yeah, that's a total nightmare. Like, it's ridiculous. But it does seem that that whole wider sort of deposit based model, I mean, around bottles for beer and for milk bottles and [00:11:00] everything seems to really come unstuck. How, how do you think you can get us to re adopt this sort of once very widespread system?
Paul: Yeah, no, good question. I think that, yeah, you just touched on bottles. So, so, let's take Germany and Norway and their recycling rates. So Germany and Norway are both achieving 98 percent recycling of their plastic bottles. Take that into the UK, I think the figure is something just north of 50%. In the US it's just under 30%.
What's the key fundamental difference between the systems Norway and Germany offer a deposit back on their, on their bottles? So when we, when, when we came up with, you know, the, the whole idea of, of Pallet Loop, first and foremost, always front and center was we need to maintain a value in that asset, in that pallet.
Because, because I firmly believe that, you know, that, that small monetary value, you know, that's, that's, again, [00:12:00] you look at plastic bag usage, 2015 was when we had a five pence plastic bag tags. That has reduced the amount of single use plastic bags by 98 percent in nine years. Okay, so that small monetary incentive will, will, I believe, just change behaviors.
Um, and again, you know, there's lots of other examples of this, you know, I'm going to the Latitude Festival this weekend down in Suffolk. And last time I was there, there's, You know, there's, the kids are all walking around with their, with their snakes of, of depositable gases and collecting them all up as they do at this big sporting event.
Why? Because there's a value to it. And so, so it just induces a behavior and. My vision is that, that if we can adopt that, if we can put a value on 20 million assets in the supply chain, that, well, you know, who knows, we might get a different behavior on the back end of this.
Will: I just remember a friend of mine years ago, he was a lawyer for mergers and acquisitions, [00:13:00] and he was working on behalf of a company buying a pallet company, and that's all they did.
Was make pallets and send pallets around the world. And I remember chatting to him and he said, we've just come across a company that 10 percent of their assets. I lost, they don't know where they are. And I mean, he was obviously thinking about it from a financial point of view, that that's 10 percent of the business if all that business is.
So is that quite normal, that scenario? And is that one of the reasons why you're doing, you're doing if companies lose, because I mean, Charlie was talking about pallets going in skips and there being no value. Of course, there's a value to them. Someone must own them somewhere or manufactured them. Yeah.
Paul: Yeah, no, there's two things there. First of all, the skips, you know, there's a, there's a value to the asset, but also there's a cost to, to, to the disposal and the skip. So [00:14:00] there's one major house builder recently has assessed that every pallet that's disposed to a skip costs them £8. Now, you multiply that up into the number of pallets in the industry, that's a huge cost to actual cost burden to them.
But with regards to the, the, the number of pallets that are lost, that. Definitely one of the things that was, was important for me to, when I was looking at the, uh, the Pallet Loop model was to make sure that it's a, it's an equitable system for the supply chain. So some of the existing pallet pooling systems will be, it's, you know, it's a, a penalty if you lose.
So, so if you lose 10 percent of the assets that you're meant to have under control, then they will bill you. At the end of the year, when they do an audit for that 10 percent loss at, you know, 20 a pallet and, you know, that can smart quite a lot when, when that comes through. And of course no one budgets for these losses.
So it's always a, a very unwelcome invoice that, that hits. [00:15:00] With the Pallet Loop, we've kind of reversed that round. It's, it's a positive stroke if you get that pallet back. So, so it's, it, you know, there's no difference with using Pallet Loop today than there would be, uh, using a white pallet. You know, we, we supply you in a green pallet, you put your products on it and you ship it out.
You haven't got to complete any paperwork. You haven't, it's literally the model is around that pallet just maintains a value and so if someone signs up and becomes a, a a member of our loopback system and they comply with with the requirements of loopback then we will pay them back up to four pounds a pallet.
And it's as simple as that, really. So it's only, so we're removing the negative and trying to create it as just a positive behavior for return.
Charlie: So just to cut, so your pallets are made of wood or are they made of plastic?
Paul: Yep.
Charlie: Made of wood? Yep,
Paul: made of wood.
Charlie: Standard, standard pallet sprayed a specific color that relates to your loop, the green?
Paul: Yeah, we've designed them so they're slightly, [00:16:00] maybe slightly better than a lot of the pallets that are kind of in the supply chain today. So we've just made some slight. tweaks to make sure they're in some cases slightly safer and standardised to a level that they would be, you know, for example, we've got our, our first pallet that was issued for British Gypsum to put their bagged plaster onto.
That pallet of course can also carry bagged cement, bagged aggregates, bagged sands, and lots of other stuff. So we believe actually just, just that single specification could Could account for 25 percent of the whole of the construction industry's volume.
Charlie: And then am I paying a premium to come and buy your pallet?
Paul: Pallet Loop ultimately is the cheapest way to supply your customer. So in 100 percent of cases that we've looked at, Once you take into account the payback that you get at the back end, actually it's the cheapest way to service the customer by, by, yeah, than using a single use white pallet. So there's the challenge for [00:17:00] manufacturers that maybe there's an increased cost on day one because of the payback that we've built into it.
But actually, when you take that into account, once we've paid that back, It reduces the cost to the supply chain.
Charlie: So if I, I'm British Gypsum, I've got your brand new, lovely green pallet. I've loaded it up with gypsum plaster. I've sent it out to a building site. They unload it and do, how does it get back to you? Or does it go back to British Gypsum and then eventually come back to you?
Paul: No, that's the, that's the big thing with, uh, you know, the biggest challenge, you know, talking about challenges at the start of the conversation, the biggest challenge with Pallet Loop the real, the real, differentiator that we've done is, is create a, a logistical system at the back end to recover the pallets back.
So we, we as Pallet Loop, we'll go and recover those pallets from building sites, from merchants, from principal contractors. So we, you know, it's all about making this easy for the supply chain. So. You do it [00:18:00] is for us, it's about making sure that we can recover from probably a hundred thousand potential locations.
You know, where do you think about again, the current, the existing pooling solutions, existing pooling solutions only gets to the supermarket and then go back again. So it's very closed loop. And that was the, one of the challenges with Pallet Loop was the fact that Yes, the pallet could end up on a Morgan Sindel site, it can end up on a Barrett Homes site, it can end up in a Travis Perkins yard, but it could also end up on your doorstep because you will have, you know, but you don't order a pallet of baked beans, well, you may, but not many people I've met have, you know, so the pallets don't leave the retail network.
Pallets do leave. Really spread out across the construction. So hence that's why you know that monetary driver and, you know, we've had to set up a bit more of a diverse logistical recovery program to ensure that we can get the pallets back in.
Will: And how do you know where all the pallets are?
Paul: We don't. [00:19:00] What we are ex expect is that people will tell us where they are because they'll tell us when they want their money back.
Each pallet has got RFID, so ra, the, the radio frequency. Identification tags. So we know through that, through that tag, when the pallet was issued and who it was issued to. And then for, as far as Pallet Loop is concerned, that's the last information we know on the outbound. Then we'll know when it was collected.
So a date it was collected and where it was collected from. So, so we'll, that's as much information as we'll get, but that will still give us a load more information than actually is that we're gathering today. So we'll be able to. assess through that what the recovery rates are in the house builders compared to the principal contractors or compared to the merchants to the retailers.
We'll be able to compare one house builder to another. We'll be able to identify what the damage rates are in different supply chains or different stakeholder groups. So we can, we then know where we have to [00:20:00] Um, allocate our resource to help to make the improvements. You know, that's the, the information that we'll be getting.
Charlie: So are you assuming that let's go back to your British Gypsum model, British Gypsum pay an extra fiver nominally, I'm sure I'm getting this very crudely. Do they then hand that extra fiver on to the customer and then the customer then gets paid by you when it gets recovered or does it go straight, how does that sort of that, that's the handing on.
Paul: Yeah, in the case of British Shipsman, there's no on cost. They've started using Pallet Loop. There's been no change of pricing to their customers. So it's just, you know, really been seen as just a swap for a white pallet. And so there's no, we're not having to build in a line item deposit. That is where Pallet Loop started. I started on the journey with a line item deposit of £20. Now, that I thought would really induce a different behavior and you see it today already in the merchant sector, there are depositable [00:21:00] pallets already being used. So very much around maybe bagged aggregates and bagged sands and your, your dense concrete blocks, those manufacturers seem to have held onto their deposit systems.
Whereas the cement sector, the roof tile sector, others have kind of gone to very much away from it. So I would say that. You know, less than 10%, probably 5 percent of the industry are using deposit that, you know, even then that causes the merchants a real challenge because it, you know, if you're a manufacturer A, B, C, D and E, and you're all using your own depositable pallets, well, you have to stack them separately in your yard.
You know, a lot of merchants are very tight for space in yards. So it becomes, and then, and then you'll find that, you know, the manufacturer of concrete blocks, they're not a pallet recovery experts. When they deliver in. They may have another delivery to go on to, so they can't collect the pallets this week.
Then they can't collect them next week. And it just becomes a, a bit of a mess. And so it [00:22:00] was around a kind of trying to create a one stop shop solution, I guess, where your Pallet Loop will have multiple specifications. So we'll have a specification as I touched on for, for bagged products. We'll have a specification for plasterboard, we'll have a specification that's That we've worked with the roof tile manufacturers on.
So we've worked with the top four roof tile manufacturers and we've been able to create a standardised pallet that they've all tested and could work for the 1. 2 million pallets that are being used to ship roof tiles out. So we believe that with about eight specifications, we can cover between 75 and 80 percent of the construction supply chain requirements.
Um, so, but through that standardization process.
Charlie: So, but then I'm the, I'm the, I'm the final recipient of this pallet and I longer need it. And therefore I phone you. And you come and collect, hopefully, a number of pallets from me and I get the refund back. Is that how, that's the sort [00:23:00] of the closing of the loop?
Correct. Exactly that. And does it, and from the carbon analysis you've done, driving vans around, I'm assuming they're vans or small lorries, to collect pallets, does that still have a sort of a climate change benefit?
Paul: Yeah, absolutely. We, the first big invoice I've signed off back in 2019 was a lifecycle analysis.
That was the third, that was really the starting point. Yes. To make sure that actually what I foresaw as being a solution was a genuine solution. Now, you know, when it comes to carbon, yes, absolutely. It would, it reduces by up to 40, 50 percent the carbon requirements of, of, of shipping pallets through the supply chain.
But of course it's also then reducing the waste. I mean, you know, 275, 000 tons of wood waste is being pushed into the supply chain through just through those 20 million pallets. So there's other significant benefits [00:24:00] and cost benefits. But I mean, you, you, you asked at the start, Charlie, are they made of timber?
Yeah. You know, they're made of timber and I still think that timber is the right product to use. It holds the carbon within it. And it's very repairable. I always say, you know, they're a bit like triggers brew. You can, you can get, get that in and you can tear one component off that's broken and you can repair it and it's back out again, ready for reuse.
Once a plastic pallet is broken, it's, it has to be completely ground down and then remade again. And that makes it very, very inefficient and very expensive. Um, and so this is always. You know, the challenges with, with, with any sustainable solutions right now are making sure that they are cost effective for a supply chain, for the users.
So that's been very much at the forefront as well, making sure that we can deliver a solution that delivers carbon benefits, that delivers general cost effectiveness sustainability benefits, safety, uh, improvement, but also is, is, is the cheapest way of [00:25:00] servicing, but for everyone to service their customer.
Charlie: And what, what do you perceive is, is, is really in it for the supplier? I mean, did they, they get to sort of tick off a line item on their ESG, on their scope three, one assumes it's almost a consumable item in this, is that, is that where you're getting the traction with the, you mentioned British Gypsum with the larger suppliers that they're going, right, actually, this is going to really help us with that kind of you know, uh, carbon modeling.
Paul: Yeah. We sit for, we, we sit very much within the scope three. Um, uh, being able to deliver a, a net zero solution for, for that, for that element of packaging, um, for those guys, but, uh, and of course, in, in, you know, we're future proofing away from packaging taxes, which are absolutely going to come down, down the track, we've seen it within plastics.
We see it already within, within timber, within the PRN system. And, and of course. We believe that these taxations on, on single use packaging are only going, the cost is only going to ultimately go one way. So again, the invitation [00:26:00] is to, you know, the earlier we get on board, the earlier the, the, you know, that's why I'm so appreciative to, to Saint-Gobain and the, and the, and the ultimate sustainable leadership that Mike Chilcott, their CEO as, as, as very much kind of led the way.
Uh, by, by, uh, you know, really promoting the use of, of, of Pallet Loop within across , because without, without this, that kind of sustainable leadership and people say, well, we're just going to go with this, then we don't ever get the chance to put the wheels on the track and start to learn. And that's always been a challenge for, for Pallet Loop.
It's that chicken and egg is, is, well, we've got this great idea, but, and everyone's telling me it's a no brainer, but actually, how do we now get it to, to work, you know, work in the supply chain and how are we going to learn? Where the pitfalls, do I think that this is a silver bullet right now for the construction sector?
No, I don't think it's the finished silver bullet. I don't think it's the finished article with the incredible team that we've got. And with the, with the stakeholders that are engaged with us, we will continue to develop [00:27:00] Pallet Loop and, and understand where the challenges are and we'll, we'll, we'll, we'll change because it's within our interest to make sure that those stakeholders are are engaged and happy with the system that we've created.
Will: Can I just ask, what's, who's Saint-Gobain?
Paul: Saint-Gobain own British Gypsum, so they're the ultimate holding company of, um, of British Gypsum and a number of other manufacturers across the, uh, across the supply chain of construction.
Charlie: I think it's fascinating.
You, the statistic you mentioned, was it, was it £8 to get rid of us, get rid of a pallet in a skip? Yeah. £8. Yeah. I mean, I think if you, I think most builders would say, well, it takes up no space. It's just a tiny bit in the bottom of the, but £8 sort of changes.
Paul: Well, you think, you know, a skip in central London now is 400 pounds.
Have you ever tried to shove pallets in a skip? They don't.
Charlie: Yes, I have.
Paul: They just don't fit very well, do they? Exactly, you know. They're not, they're not very spacious.
Charlie: The best thing to do is get a mini digger and drive over them and scoot them up and drop them in. And we, [00:28:00] we, we've sent them off for, for, for, for, for, for wood waste, you know, energy reclamation.
But it, it, And I've hand pulled them apart and made, made some of the, the, the, made furniture and buildings. And actually my entire plant room is made out of stillage from windows that I took apart because they're easy to take apart and pallets. Yeah. Yeah. But you know, it's always been this, this incredible resource coming through a site that just is very hard to access and actually ultimately ends up just keeping off and keeping people warm, you know, back in the day, keeping them warm in winter, they just burn them, which is, is, is a ludicrous use of a, of a, of a, of a material.
Paul: Yeah, yeah, yeah, absolutely. And I think that that's, that's a good point because, because we've been challenged on the fact that, you know, well, growing trees is a good thing.
Of course it's, you know, you know, a a a tree that is growing absorbs more carbon dioxide than a tree that's at full maturity. Um, so, you know, not for a minute am I promoting that we should stop, stop fed trees that are from [00:29:00] FSC, sustainable sources. What I do think is wrong is wasting a fibre that has got multiple reuses again, because you know it's a natural fibre and we're gonna have to use these kind of natural fibres to replace other things that are challenges, you know, plastics. Well, okay, fine. You go into a, into an M and S now and pick up a wooden spoon or a wooden fork. It's not plastic anymore, but of course that's only because there's fibre available to do that. Well, if we keep just burning it, because, because it's a, it's much easier to do that, then we won't have the fibre available in the future.
Um, to help us deal with some of the other challenges we've got coming down the track. So yeah, I think being, being resourceful with, with our natural resources is, is, is key.
Charlie: This is what I work with a kind of a very experienced sustainability consultant, a building sustainability consultant. He says, yeah, the thing is you can't log your way out of a climate crisis.
You're like, Oh yeah, you know, you just can't cut all the trees down. So every single bit of, uh, wood fibre has [00:30:00] an enormous value, you know, and we see that coming through the, the building site, the building system now with wood fibre insulations and, you know, laminate, laminated veneer lumbers and super efficient use of timber.
And we're trying to be as efficient as we can yet. You're getting lumps of wood onto a site and chucking it in a skip and, and off it's going. And as you say, it, it does need to, to change. What do you think the biggest barriers to uptake are going to be? You know, obviously you've managed to get a large, you know, a large, almost household name supplier to get on board because they've obviously got a breadth of talent in their sustainability department and, and the ear of significant leadership.
Do you think you are going to have the ability to grow this at scale and speed in the way that we need?
Paul: Yeah, that's, that's a good question because you, we, we've been working with, with key stakeholders now for, you know, I mean, I would say my first conversation with major stakeholders was back in 2017.
So, yeah, roll forward seven years and we've now got a [00:31:00] live solution that is, you know, very much, uh, you know, assessed as a no brainer yet. We have only got one customer on board. We've got more coming down the track, but, but it's, it's very much, it's a difficult. You know, economic scenario right now. So, you know, three years ago, the industry was so busy.
I think it would have just been adopted roll forward three years and, and volumes are down margins are under pressure. And, you know, as much as I want to push Pallet Loop as quickly as possible, you know, the, the finances need to be, need to stack up for the whole of the supply chain, but the manufacturer at the front end is the challenge for us.
You know, it's, it's kind of getting through that procurement barrier. Yeah. And getting the, the, the whole bigger picture and, and seeing the, the future proofing against taxation, the, the carbon benefits, the, the, the lack of waste. So yeah, our challenge probably sits kind of when, when [00:32:00] sometimes we can, we, we, we land in the procurement conversation with the manufacturers.
Will: Reusable pallets. Do exist in other industries the blue pallets have belonged to CHEP now if that's the case in other industries. Are you only? concentrating on construction and what's you what's the difference between you and say CHEP and What actually is the environmental? impact that you have, are you, what you did a life cycle analysis on it?
If you were to extrapolate that data out, what are those kinds of figures?
Paul: The key difference between us and a, and a, uh, you know, an existing pallet pool of a CHEP. Would be that their ambitions, I believe for growth are in new markets because there's big volumes in new markets for them to go after with their existing model.
So for them to, to the, the asset that they have for the retail sector, isn't necessarily suitable [00:33:00] for what is required in the, in the, in the handling and the supply chain of, of construction. So. Stacking, uh, cement on it, roof tiles, you know, plasterboard and nor do they necessarily want, you know, the contamination that, that, that the construction, its supply chain invariably puts into the, into the pallet pool.
You know, I was at, I was up at, uh, in Burson on Trent yesterday at our, one of our key recovery sites and seeing Pallet Loop pallets coming back in along with other pallets from, from building sites. Yeah, they're quite, they're quite messy. So the last thing you want to do is, is, is bring them in and, and they've got a lot of cement dust, et cetera.
And then the next trip they're putting fresh produce in and going back into Tesco. So I think that that was one of the, one of the challenges that, you know, and one of the different, the key differences between us. And as I touched on before, the, the, the, the financial model is different. We, we, we, we kind of, we're going to be positively paying at the back end through our [00:34:00] payback system, as opposed to if someone loses it, well, It is a lost pallet that's a risk that we have to take. Um, and we've modeled that risk within our, within our system, but, um, you know, as opposed to, to, to a, uh, a pallet pool of where if you lose their asset, they will charge you for that.
Will: And what is that environmental impact? The environmental savings? I know you've, have you extrapolated out in best case scenario? This is what we will achieve within the building industry.
Paul: Yeah, we do. I mean, with regards to, well, we, we can save 6, 000 acres, I think Charlie, you started with that. So, you know, 6, 000 acres of forestry every year is being felled just for us to manufacture pallets for the construction sector. So that's a, you know, it's about, you know, about 275, 000 tons of, of, of, of lumber.
That is moving through the supply chain and not being reused. So that's a huge, huge sustainable benefit. You know, if you think in those seven years, since I came up with the idea, you know, you multiply [00:35:00] that up. That's a, that's the big area of forestry and the, the ability for us to effectively reduce and drive out, you know, today with the, with our current system, 40 percent of the CO2.
Um, so I think the, the life cycle analysis suggested that we would save 1. 82 kilograms of, of carbon per pallet trip that Pallet Loop makes over an existing. So again, depending on the volume that you have in your, you know, that the manufacturer has, you can extrapolate that out and, and show that. And through the RFID technology, we can really.
You know, officially record that, that, that physically that pallet has come back from British Gypsum and document that so that they can report that within their ESG sustainability figures as a business.
Charlie: One assumes that that tracking data also has real value to the operators, to the, to, to, to British Gypsum to actually have a full tracking data of where their stuff goes, must be a proxy to understand what their sort of business network is operating and how it's, how it's sort of shaking [00:36:00] down.
Paul: I mean, ultimately RFID is. It's just a, a digital barcode.
So everyone is, is, is very welcome to use that RFID label within their manufacturing, within their stock taking, you know, with, within their yards. But yeah, no, I think. It's, it's, it's, it's exciting for me to, to consider how we can report back for the first time ever to, to businesses, actually their, their exact sustainability credentials for, for their pallet movements.
And, and I think that that again, drives targets and behaviors and, and conversations within businesses to increase that year on year, whereas today they're figures that we don't necessarily know.
Charlie: Is there, is there a kind of, is there a minimal viable number? I mean, you're obviously you've, you've got your first good scale customer and you, you know, you're up and running, but do you need to get to a certain kind of market saturation so that the pickup efficiency gets to a point that you're like, right, this is, we're really cooking on gas here.
Is that, so there's a, is there a kind of immediate challenge that you need to sort of [00:37:00]
Paul: We've kind of forecast that we believe a, uh, our forecast is that within the, by the end of year three, we can deliver 5 million issues a year. So that'd be 25 percent off the construction sector today with the contract that we've started with, with British ships, and that could equate to about 1.
5 million off that five. You know, the bagged cement sector on their own is 1. 8 million pallets, you know, the roof tile sector, 1. 2 to 1. 4 million pallets. So you can very quickly get, if you can get the engagement of the, of these key manufacturers.
Will: I've just looked up what 6, 000 hectares looks like and a hectare is a sports field.
So 6, 000 sports fields. That's actually quite a lot
Paul: per annum, you know, cumulatively just every year.
Charlie: What would you expect your wastage rates will be? What would success look like you in terms of wasted rates? If you got down to 10 percent wastage, so you're now [00:38:00] down to 600 hectares rather than 6, 000 with that, that would be a significant win, I assume.
Paul: Well, I was again, you know, if, if today the current rate is, we believe six to 8%, My challenge to the industry would be, well, if we achieve 10 percent as a reuse, would that be a win? You know, if we get 2 percent increase in, in, in Figbook, absolutely. You know, why can't we achieve 90, 90 plus percent? I think a lot of that will come down to, you know, mass adoption of the scheme, because, you know, the more we have out there in the field, the faster they stack up more problematic, they quickly become for people.
And the quicker people will be phoning us to get them back through. Already we've seen, again, yesterday, I, I saw six loads of loop pallets. You know, we only started 10 weeks ago, we'd forecast that a pallet would, you know, we'd estimated that a pallet would be, it would take about 180 to 200 days when we're forecasting this for a pallet to, to come back through.
And already we're seeing, you know, the first plaster board pallet. [00:39:00] It only went out 10 days ago and we've already had the first one back in, you know, so it's amazing how quickly this, this can happen and how efficient that the system can be.
Charlie: So effectively one pallet could probably replace five, six, seven pallets because quite often on a building project, the plasterboard pallets will come and they'll sit there in a corner until almost the end of the job.
And when they do the big cleanup. Traditionally, there would have been a bonfire, but nowadays it'll go into a, you know, a wood skip or a, you know, a normal skip. Yeah. So, you know, it's amazing that if you get that thing churning, you can probably reduce the number of pallets full stop over the entire market.
Paul: Yeah, absolutely. I mean, we, we, we, when in our previous manufacturing business, we, we operated a, a repair facility for a major pooling business. And you would see pallets coming through that, that system that were 10 years old. You know, they'd been repaired. You probably get three or four trips a year within that retail sector.
They'd been repaired 30 or 40 times, you know, 30 or 40 uses compared to, you know, so you work that out [00:40:00] at 6, 000 acres per annum, you know, times that, you know, there's a vast saving that's available.
Charlie: Obviously you're focused on pallets, but is there in the conversations that you're having with these large suppliers and manufacturers, are there other areas of the construction industry, which is notoriously wasteful?
Where this kind of moving beyond single use, do you think there are great opportunities out there for wider, wider adoption?
Paul: Yeah, no, the culture within Pallet Loop and the team is, is we are looking at anything that would be classed as packaging. In this, the whole of the supply chain, we are looking at go, how can we make that reusable?
Is, can we make that reusable? But why can't you create reusable cement bags? Why can't you create, you know, reusable strapping? Why can't you create
Charlie: paint, paint pots,
Paul: paint pots, tubs of, why? And I think that shoot for the stars and, and you, you'll find some really great stakeholders in this sector that would engage [00:41:00] with you and work with you to deliver that.
So, you know, one for me would be the, the bulk bag, you know, the, the, the one ton single use big lump of plastic and I think, well, why, why can't we, why can't we create that into a reusable system? Yeah, we're going to have lorries going into. Every single collection point across the UK, well, why don't we look at that?
You know, so, so, you know, these are things that we will, you know, I think that the Pallet Loop was the start. I, I firmly believe that the future will be loop. And we will be looping other consumable assets and, and delivering a service to, to the construction industry, because again, if the lorry's on site, why can't we help them dispose of their gypsum waste or their glass wool waste, et cetera.
You know, it's just collaborating with, with the supply chain and see, see where it goes.
Charlie: Well, there's been, there's been multiple sort of schemes to try and pull secondhand building materials. Uh, when I built our company office at the end of it, I managed to [00:42:00] convert a shipping container by buying four sheets of plasterboard and three rolls of insulation.
Everything else was leftover materials. Absolutely everything else was leftover materials. And on most building sites, that would just go in a skip because builders move from site to site and they do not keep half boxes of screws and it's just, it's just, they just don't. The amount of material going out on skips is enormous.
Eye watering. And it does seem to me as though you might be, you know, sort of starting to, to crack that problem that once you've got a lorry appearing on site at the end of a job to take something back, there is an awful lot of stuff that could go back into the top end of the system. So it's, you know, absolutely incredible. I can see it's taken a lot of work and a lot of ambition and, uh, full respect. I think that's an incredible achievement.
Well, that's it for this episode of Sustainability Solved. Next month, another form of innovation within the building industry. We're going to be talking to two of the judges from the Housing Design Awards about this year's winners.
Make sure you hit follow in [00:43:00] your app so you get notified as soon as that episode drops.
Will: For questions and more information on sponsorship opportunities, email podcast@sustainabilitysolved.org and if you've enjoyed what you've heard today, please do leave us a review in your podcast app. It would be really appreciated.
Charlie: Thanks for listening. I'm Charlie Luxton.
Will: And I'm Will Richardson.