Before shipping goods, many manufacturers struggle to achieve full compliance with a seemingly complicated and over-technical nemesis: the pallet label.

But this is a modest process that’s well worth mastering: get it right and you’ll have pallet labels that scan every time, speeding your product’s time to market, giving you better inventory control and saving your business time and money. Get it wrong and you risk your stock being rejected, lasting damage to your customer relationships and penalties from retailers.

Here we look at the major issues — and how to fix them. (Plus, there’s an opportunity to take up a free Matthews pallet labelling audit. See the end for details.)

So what’s the big deal with pallet labelling?

GS1 Australia has set the standards for logistics labels, making it easy for manufacturers to ensure they have the best quality labels. It has compiled a pallet label quality checklist to assist suppliers with successful pallet labelling.

But they’re not the only standards you should be concerned with; your logistics labels should also be compliant with your customers — the retailers. Bad pallet-labelling practices are an ongoing headache for major supermarket retailers, and many now impose penalties for logistics labels that don’t meet their requirement, so if you get it wrong multiple times, you may well cop a fine. For all these reasons, it’s definitely in your interests to know what makes a good pallet label, and what makes a bad one.

As extra “incentive” to get pallet labelling right, check out the latest supply chain changes canvassed when we were a part of the technology panel on the Transport & Logistics day at the 2015 GS1 Supply Chain Week.

What makes a good pallet label?

There are three key elements to a fully compliant pallet label: content, size, and application.

1. Content

The label will contain both human-readable text and scannable symbols, namely: supplier details, Serial Shipping Container Code (SSCC), product description, product GTIN, carton quantity on pallet, plus code date information and batch number (if applicable).

When it comes to the label content, you should be able to tick the following checklist:

• SSCC is unique for each pallet and has not already been issued in the last 12 months
• Both SSCC and product information barcodes are printed in the GS1-128 symbology
• Quiet Zones (light margins) are not infringed
• SSCC barcode magnification is between 48.7% and 92.5%
• Product information barcode magnification is between 25% and 100%
• All bar codes are at least 32mm in height
• Human-readable information is located below barcode symbology, is no less than 3mm height, and is clear and legible

2. Size

Label size is important, but more flexible than the content. A standard A6 format (105mm x 148mm) is sufficient for most requirements, so long as the width remains constant at 105mm. Larger label sizes are also allowed, and the label can be either portrait or landscape.

3. Application

No matter how perfect the content and size of the label, if it’s not in the right place, a scanner won’t be able to read it. GS1 Australia and the grocery and liquor industry recommend:

• Two identical labels per pallet on opposing fork-entry sides
• Vertical position, not crooked, creased or angled greater than 5 degrees
• 400mm and 800mm from the base of the pallet; no closer than 50mm and no further than 100mm from the right-hand vertical edge
• Label must be placed on the outside of stretch-wrap for full pallets
• When multiple pallets are stacked and stretch-wrapped on the same footprint, the pallet labels should be applied underneath the stretch-wrap as this will be cut away upon delivery into the distribution centre
• When multiple pallets are stacked and stretch-wrapped individually, the pallet label should be applied over the stretch-wrap

And… what makes a bad pallet label?

It goes without saying that a bad pallet label is one that doesn’t tick the boxes outlined above. To be more specific though, here is a list of the most common pallet-label fails according to major retailers:

• Label position incorrect
• No label in use
• Duplicated/mismatched SSCCs
• Damaged label
• Will not scan
• Under stretch wrap (for individually wrapped pallets)
• Pallet label on one side only
• Incorrect product label
• Duplicated (SSCC number already used in last 12 months)

How to achieve 100% perfect pallet labels

You might not be surprised to hear that it all comes down to the technology you use, and how this is integrated into your production line — which is precisely where Matthews comes in.

Pallet labels can be applied at the point of manufacture or point of dispatch. They can be applied automatically using a Label Printer Applicator (LPA), or manually using a Label Printer.

If you opt for an LPA, this should typically be installed at, or immediately after, the pallet stretch wrap station. It’s common to interlock the LPA with the stretch wrapper to apply an SSCC label on each fork-entry side of the pallet. Use an unattended scanner to read each carton barcode, and from that information the LPA will print the appropriate pallet label on each fork-entry side.

Better yet, you can integrate your LPA and scanner with coding management software such as Matthews iDSnet on the packaging line to automate the print, apply and verify process for both the GTIN carton and pallet label. This enhances the efficiency and accuracy of the entire process.

Once you have the equipment in place, you need to test, test, test. Use both a physical check of the key data attributes and scanning the label to ensure readability.

Multi-coded pallets

In November 2013, multi-coded pallets (MCP’s) were introduced across major retail chains Woolworths, Coles and Metcash. This is where multiple use-by dates/batch codes of a given SKU are consolidated onto a single pallet.

Here’s a quick example: A retailer’s purchase order may request a full-pallet equivalent quantity of an SKU (say 60 cartons) but a supplier can only provide this quantity if they ship multiple batch codes of the same use-by date — say 40 cartons of one batch code and 20 cartons with a different batch code but the same use-by date. Rather than two separate part-pallets, the product can be consolidated to a single pallet of 60 cartons with multiple batch codes.

But don’t panic: implementing MCP’s is not mandatory, it is simply an option for manufacturers where it makes commercial and operational sense, and where retailers are willing to accept their stock in MCP’s. Efficient Consumer Response Australasia (ECRA) recommends conducting a rigorous cost-versus-benefit analysis and detailed trading partner discussions before making a decision.

There are some specific rules as to how the MCP must be structured, labelled and communicated. You can read these in full in the Multi-Coded Pallet Guidelines on the ECRA website.

Get a free pallet labelling audit!

If you need help with your pallet labelling, contact Matthews for a free no obligation pallet labelling audit. We’ll help you work out the best solution to ensure your pallet labels are fully compliant and will scan every time. Contact us today!

For further reading, download our pallet labelling whitepaper.

* Mark Dingley is General Manager of Matthews Australasia. With 20+ years of experience in the product identification industry and the wealth of knowledge gained from working closely with manufacturers and industry associations, Mark actively contributes to industry forums, magazines and the Matthews blog. An avid soccer fan, he also gets out on the field every Saturday, in between the “sports taxi run” for his family.