Wooden pallets form the backbone of the American shipping industry. Each year, 405 million of them are loaded with appliances, frozen foods, whatever, to get from one place to another. Unfortunately, they have a natural enemy: the Asian long-horned beetle. Which is where John Perazzo and his SureStacker corrugated pallet come in.
Since the beetles love to eat, live in, and travel with wood, the U.S. Department of Agriculture requires international shippers to fumigate or heat-treat wood pallets, which adds $1 or $2 per pallet. "It's all of a sudden very expensive to ship with wood," says Perazzo.
Perazzo, a 54-year-old engineer, came up with the idea of a corrugated-cardboard pallet reinforced with recycled hardboard. Corrugated cardboard is exempt from the beetles' lust, and thus, from regulation, too—and at about 17 pounds apiece, the pallets are about a third the weight of the wooden ones. They're also recyclable and (unlike typical wood pallets) can be custom-sized to shippers' specifications. At $9 apiece, they cost about the same as heat-treated wood.
In five years, Perazzo's Packaging Unlimited has gone from zero to over $5 million in sales. So can it make a dent in the $6.8 billion U.S. pallet market? "The industry is extremely fragmented, and there are a lot of niche markets," says Ralph Rupert, a research associate at Virginia Polytechnic Institute's Pallet and Container Research Lab. "SureStacker's potential is there, but its success comes down to customer service and aggressive sales marketing." —Stirling Kelso
A version of this article appeared in the June 2006 issue of Fast Company magazine.