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How do differing standards increase trade costs? The case of pallets

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  • Aldaz-Carroll,Enrique
  • Raballand,Gael J. R. F.

Abstract

The pallet is a platform used for storing, handling, and transporting products. There are hundreds of different pallet sizes around the world. The case of pallets is examined to illustrate the impact of multiplicity of standards on trade costs. We select this case because pallets are used all around the world, pallet standards are not too sophisticated, and data on the impact of pallet standards are to some extent available. The paper examines why there are so many different pallet sizes, the associated trade costs and the reasons why countries have not harmonized pallet sizes to eliminate such costs. It then presents options for exporters to mitigate the adverse effects of standards multiplicity while complying with destination markets'standard requirements. The range of options is limited in the case of exporters from less developed countries because of the lack of rental and exchange pallet markets. To mitigate the costs of this multiplicity of standards, the World Bank's strategy should be divided in two directions: to develop awareness of costs related to the multiplicity of standards and to support actively harmonization at the global level (within International Organization for Standardization) and at the regional level (within regional cooperation agreements).

Suggested Citation

  • Aldaz-Carroll,Enrique & Raballand,Gael J. R. F., 2005. "How do differing standards increase trade costs? The case of pallets," Policy Research Working Paper Series 3519, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3519
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    Cited by:

    1. J. Luis Guasch & Jean-Louis Racine & Isabel Sánchez & Makhtar Diop, 2007. "Quality Systems and Standards for a Competitive Edge," World Bank Publications - Books, The World Bank Group, number 6768, December.
    2. Hezekiah Agwara & Philip Auerswald & Brian Higginbotham, 2014. "Algorithms and the Changing Frontier," NBER Working Papers 20039, National Bureau of Economic Research, Inc.
    3. Jianwei Ren & Qingqing Zhao & Bo Liu & Chunhua Chen, 2019. "Selection of pallet management strategies from the perspective of supply chain cost with Anylogic software," PLOS ONE, Public Library of Science, vol. 14(6), pages 1-18, June.
    4. Fabiana Tornese & Maria Grazia Gnoni & Brian K. Thorn & Andres L. Carrano & Jennifer A. Pazour, 2021. "Management and Logistics of Returnable Transport Items: A Review Analysis on the Pallet Supply Chain," Sustainability, MDPI, vol. 13(22), pages 1-23, November.
    5. Zhou Kang & He Shiwei & Yin Weichuan & Cheng Lingyan & Song Rui, 2017. "Optimization of Empty Pallets Dispatching Based on Different Transportation Modes," Journal of Systems Science and Information, De Gruyter, vol. 5(2), pages 97-110, April.
    6. Ray, Charles & Janowiak, John & Michael, Judd & Bachev, Hrabrin, 2007. "Economic and environmental impact assessment of proposed bark-free requirements for wood pallets in international trade," MPRA Paper 99615, University Library of Munich, Germany.
    7. Hao Zhang & Jiadong Jiang & Liwei Zheng & Xiangzhen Li, 2019. "The interaction between standards development and economic growth of China," International Journal of Quality Innovation, Springer, vol. 5(1), pages 1-13, December.
    8. Roy, Debjit & Carrano, Andres L. & Pazour, Jennifer A. & Gupta, Akash, 2016. "Cost-effective pallet management strategies," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 93(C), pages 358-371.
    9. Carrano, Andres L. & Pazour, Jennifer A. & Roy, Debjit & Thorn, Brian K., 2015. "Selection of pallet management strategies based on carbon emissions impact," International Journal of Production Economics, Elsevier, vol. 164(C), pages 258-270.
    10. Aldaz-Carroll, Enrique, 2006. "Regional approaches to better standards systems," Policy Research Working Paper Series 3948, The World Bank.
    11. Gilles Pache, 2022. "Who will be the winners of the current changes in retail logistics?," Post-Print hal-03948675, HAL.
    12. Saewhan Kim & Laszlo Horvath & Jennifer D. Russell & Jonghun Park, 2023. "Sustainable and Secure Transport: Achieving Environmental Impact Reductions by Optimizing Pallet-Package Strength Interactions during Transport," Sustainability, MDPI, vol. 15(17), pages 1-19, August.
    13. Patricia Sourdin & Richard Pomfret, 2012. "Trade Facilitation," Books, Edward Elgar Publishing, number 14596.
    14. Hezekiah Agwara & Philip Auerswald & Brian Higginbotham, 2013. "Algorithms and the Changing Frontier," NBER Chapters, in: The Changing Frontier: Rethinking Science and Innovation Policy, pages 371-410, National Bureau of Economic Research, Inc.

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