How much does a pallet rack system really cost? When you factor in the total cost of ownership, the cost is more than just the purchase price. That can be especially true if you’re only looking for the lowest purchase price because that decision could lead to much higher ongoing maintenance and loss-of-use costs over the life of the system.
The issue, notes Steel King Industries Regional Sales Manager Raymond Weber, is that lower-cost pallet rack systems are more likely to be damaged by the routine operations of a warehouse.
“If you install a higher-cost Brand A and a lower-cost Brand B in a warehouse and do nothing, they will each stand for a very long time,” Weber says. “But the reality is that a lot is going on in a warehouse, and a lot of that activity is the back and forth of forklifts which inevitably bump into elements of the racking structure.”
Lower-Cost Systems More Susceptible to Damage
“Those collisions are more likely to damage a lower-cost system,” Weber notes, “incurring significant repair or replacement costs while also taking the damaged section out of service, resulting in reduced productivity and lost revenue.”
RMI (Rack Manufacturers Institute) advises “to immediately isolate” the area where the damage occurred. That typically means emptying the bays where the damage occurred along with the adjacent bays while the repair or replacement to the damaged component are being made. “That incurs a real lost-use cost,” he says. “Furthermore, teardown, lead times, replacement parts, freight, and re-installation for a damaged structure will likely cost far more than parts in an original system.”
Ignoring maintenance can be costly, notes the CSA Group, a global standards organization.
“Making maintenance a priority can result in significant long-term savings,” the CSA Group’s User Guide for Steel Storage Rack says. “Repair or replacement of components with minor damage establishes a philosophy of zero tolerance. Conversely, if minor damage is perceived to be acceptable, the rate of the incidence of damage can accelerate,” adds the guide, which promotes safe working environments where pallet racking is installed.
Those are all real costs that affect annual budgeting, Weber says, noting that “while a pallet rack system purchase is a capital cost and repairs and upkeep are maintenance costs, the maintenance costs are very quantifiable.”
“Operating costs are inevitable, but you can avoid higher maintenance costs by selecting a pallet rack system with components designed to withstand minor and moderate impacts at the time of purchase for only a slight increase in cost,” Weber says.
Factors Relating to Durability
Dimension of rack components, and the gauge and type of steel are initial indicators of durability to take note of, Weber advises. A closed tubular design of racking components, like that used for Steel King’s SK2000 pallet racking, provides significantly better impact strength than systems that use open-back components. For heavier loads, systems that use hot-rolled structural steel for upright beams, like that used for Steel King’s SK3000 system, offer superior impact resistance.
Origin of the steel is another factor. Steel King uses only American-made steel subject to U.S. regulations to assure structural integrity.
“When you pay for higher quality up front, you get a system that is designed to stand up to warehouse operating conditions, and thus your maintenance costs will likely be lower,” Weber says.
Damage Risk Rises in Cold Storage Facilities
“Special conditions also need to be factored when determining operating costs of a pallet rack system,” Weber notes. “Those include cold storage warehouses, which often have tighter configurations to reduce refrigeration costs. That makes forklift operation more challenging and prone to collisions.”
Compounding the likelihood of collisions is the harsh conditions that forklift operators endure in cold storage warehouses. “When you’re working in a blast freezer or other cold storage facility, you’re probably moving around faster, and that can raise the likelihood of collisions,” Weber adds. “As much as you train for this not to happen, there probably will be accidents, and those costs need to be budgeted for.”
Seismic Considerations More Common
Seismic activity is another factor that can affect costs. Often, “stock” or “used” rack components do not meet building code seismic requirements for the facility location.
“Building codes relating to seismic forces are more widespread than in the past,” Weber says. “You really need to know the local code seismic requirements, then expect to pay for racking designed to meet those requirements,” he says.
As the old saying goes: “An ounce of prevention is worth a pound of cure.” That also applies to storage rack systems. So, when you are looking into pallet racking systems, keep in mind that a lower purchase price might result in a higher total cost of ownership over the life of the system.