Cardboard Pallets on the Blockchain

My acquaintances are aware of my ever-inquisitive mindset. Between 2015 and 2022, I devoted hours each week to acquiring knowledge about cardboard pallets, such as their manufacturers, composition, purpose and target audience. My objective was to comprehend the rationale behind IKEA's logistics crew's decision to replace all wooden pallets in their global supply chain with an engineered, paper-based pallet that would result in millions in savings annually.

After extensive Google searches, I stumbled upon multiple options to produce cardboard pallets, including production facilities equipped with robotic arms that applied hot-melt adhesive onto pallet legs attached to honeycomb pallet decks.

I also engaged in several conversations with logistics managers within retail chain store networks, most of whom were content with continuing to use hardwood and plastic pallets.

I collaborated with both the engineering and sales team at Lifdek USA, a privately-owned start-up that licensed their cardboard pallet "system" to many of North America's largest box plants. Our goal was to create cardboard skids and double-decker pallets for lightweight logistics needs. Unfortunately, an alleged infringement on a tiny aspect of one of their initial designs ultimately thwarted the founders' good intentions. In 2022, I therefore terminated an expensive seven-year chapter of that partnership, aided by a local Australian licensee being redirected by their Japanese owners to more lucrative short-term ventures.

Fast-forward to 2023, and businesses are grappling with a lethal combination of energy price crises, escalating global warming concerns, a shortage of truck drivers and disrupted supply chains with not enough pooled timber pallets.

On the other hand, we also have the power of accelerated learning through platforms like Open AI's ChatGPT, as well as rapidly evolving machine-learning, big data, autonomous electric trucks and ships, a $1.2 trillion market capitalization for cryptocurrencies, tokenomics and a world shaped by the rapid convergence of all these exponential technologies. Amidst these disruptive stacks are distributed asset organizations (DAO's), which hold the potential to replace failing shareholder-centric business models.

So what on earth has this all got to do with cardboard pallets, you may be asking yourself?

The advent of Industry 4.0 offers businesses shipping lightweight goods the potential to pool their cardboard pallets and become members of a global DAO, without a CEO or profit-driven board of directors.

To become a member of the DAO, business owners would purchase the DAO's token and use it to trade pallets. The proceeds from token sales would be utilized to produce tens of millions of pallets locally, at regional box plants. These would be added to the global pool any member can access. These pallets would be designed to accommodate loads weighing less than 500kg. It is impractical to transport toilet paper and vegetables on 40kg hardwood timber pallets when a 7kg cardboard pallet can adequately do the job (IKEA proved this).

Pallets are of course tangible assets that can be "tokenized." As a pallet travels from factory to distribution warehouse and onto retail stores, token ownership is transferred to another member's token wallet through IoT tracking devices, NFC, or QR-code scanning technology. This process eliminates the need for human pallet controllers to oversee the movement of expensive wooden and plastic pallets in and out of warehouses.

The transaction entries would be digitally secure and cryptographically inscribed on the EOS blockchain, for full transparency. Through this process, DAO members would collectively benefit by billions of dollars annually while keeping these pallets in the circular economy rather than in landfill sites emitting methane.

When a damaged cardboard pallet is discarded into a recycling bin, the final user automatically is billed a token fee that recovers a portion of the pallet's unused cost. If the pallet is extensively used, the fee may be minimal, encouraging safe re-use, where appropriate. Cardboard box co's and recyclers become DAO members.

All DAO members benefit proportionally from the hiring and de-hiring of these pallets among members, increasing the value of their tokens and reducing the cost of placing new pallets into the pool for rent or purchase. Significantly, no company would own the DAO. Members control its direction.

Local authorized box plants that supply new pallets to the pool receive tokens from sub-DAOs buying new tokens to fill their supply chain with pallets. Tokens can be exchanged between business wallets worldwide, similar to transferring Bitcoin over the Lightning Network and if a person owns enough tokens, they own a digital equivalent of a new pallet(s).

By redirecting surplus tokens to other DAOs dedicated to land regeneration initiatives, it could lead to the planting of millions of trees annually. Furthermore, billions of kilograms of transport CO2 emissions could be avoided by reducing the weight of pallets on semi-trucks. A full truck carrying ~ 22 pallet loads would be ~ 600kg lighter, when compared to carrying traditional timber hire pallets, which originated in Australia as repurposed remnants from American military equipment during WW2. Hardwood timber hire pallets are frequently produced in Southeast Asia and transported globally. They move empty, filled with air, from warehouse to warehouse.

In contrast, cardboard pallets can be manufactured locally in regional box plants using locally sourced and upcycled corrugated fiberboard. They ship flat-packed.

So where to from here?

There are numerous knowledgeable experts in the areas of DAOs, tokenomics, NFTs, and blockchain technology who can be connected with impact investment fund managers holding billions in potential investment capital. This capital could be channeled into a Series A funding round to establish the pallet DAO, recruit a founding team of logistics-related specialists, and finalize product development.

In closing, as a deep generalist, I cannot guarantee that the DAO terminology I've used is contextually precise. The objective of this article was to spark a vigorous discussion among people invested in old material supply chains, seeking better circular economy outcomes.

If you are reading this article and believe that you can contribute investment as a DAO member, please reach out to me at [email protected].