Profitability will always be the main reason for investing in a pallet kiln. This can either be a positive reason, such as increased price of the pallets or a negative reason, such as not loosing a valuable customer. Regardless of your specific reasons, we have compiled some numbers below to show you the cost of operating a kiln.
The following expenses are included in these numbers:
On average, it will cost a company about US$ 350.00 per month to be certified to heat treat and mark pallets with the IPPC stamp. Therefore, the weekly cost is about US$ 81.00 and is the amount we have used for our calculation.
We would always encourage you to ask for quotes from several inspection companies. The list below includes those companies we are familiar with:
This value will vary depending on many factors (listed below). Some of these you are in control of and others you are not.
Based on our experience most people fall into a cost between 4 to 10 cents per pallet in a end loaded or side loaded pallet kiln.
For our calculation we have chosen to use 7 cents per pallet as the cost figure for end and side load pallet kilns. For the container based pallet kiln using a Piggy-back HT system we have used 10 cents per pallet as these are not as efficient.
Factors that determine your energy consumption:
This value will vary depending on your facility and how far you have to travel to the kiln. We have observed that the most practical place to install the kiln is close to the loading area.
Labor and forklift costs for pallet heat treatment:
Full truck load and larger size pallet kiln (High Cap Wide, High Cap Standard, Economy, and Junior Long model):
This is based on the PHT-471212 for 600 pallets.
This is the loading and unloading cost and is only an estimate. We estimated 30 minutes to load and 30 minutes to unload. Cost for driver and forklift is estimated at US$: 45 divided by 600 pallets per kiln charge.
Estimated loading and unloading cost per pallet: 7.5 cents.
Less than truck load pallet kilns (Junior Short, Junior Mid, Junior Sideload):
This is based on the PHT-321111 for 300 pallets.
This is the loading and unloading cost and is only an estimate. We estimated 20 minutes to load and 20 minutes to unload. Cost for driver and forklift is estimated at US$: 30 divided by 300 pallets per kiln charge.
Estimated loading and unloading cost per pallet: 10 cents.
Piggy-back container based pallet kiln:
This is based on the Piggy-back container based pallet kiln with 440 pallets.
This is the loading and unloading cost and is only an estimate. We estimated 40 minutes to load and 40 minutes to unload. Longer loading time than other units is the entry using ramp take longer and is narrowed plus handling the fan-header.
Cost for driver and forklift is estimated at US$: 45 x 1.33 hours then divided by 440 pallets per kiln charge.
Estimated loading and unloading cost per pallet: 14 cents.
This value will vary depending on your facility and how fast your stamping is and if you are allowed to automate the process. Again, we have different costs for the junior and standard pallet kilns. This reflects the different volumes you will be handling at one time.
Stamping and paper work costs for pallet heat treatment:
Full truck load size pallet kilns (High Cap Wide, High Cap Standard, Economy, and Junior Long):
It will take about 60 minutes to stamp a load of pallets plus 15 minutes to complete all the paperwork and related jobs.
US$: 15 per hour divided by 600 pallets per kiln charge.
Estimated stamping and paper work cost per pallet: 3.1 cents.
Less than truck load size pallet kilns (Junior Short and Junior Mid):
It will take about 30 minutes to stamp a load of pallets plus 15 minutes to complete all the paperwork and related jobs.
US$: 15 per hour = US$ 11.25 per load divided by 300 pallets per kiln charge.
Estimated stamping and paper work cost per pallet: 3.8 cents.
Piggy-back container based pallet kiln:
It will take about 45 minutes to stamp a load of pallets plus 15 minutes to complete all the paperwork and related jobs.
US$: 15 per hour divided by 440 pallets per kiln charge.
Estimated stamping and paper work cost per pallet: 3.4 cents.
It would be disingenious to forget about paying for the unit. The estimates below are based on about 1,000 miles of transport cost plus the price of the kiln without any upgrades. Naturally, the lease per month is based on good credit. In your specific situation, we would have to make custom estimates taking the actual freight cost and any upgrades into account.
Leasing cost (or depreciation) of heat treating pallets:
| Estimated lease cost | Monthly | Weekly |
|---|---|---|
| Piggy-back pallet kiln unit | US$: 450.00 | US$: 106.00 |
| Junior, short model | US$: 760.00 | US$: 176.00 |
| Junior, long model | US$: 935.00 | US$: 216.00 |
| High Capacity Standard model | US$ 1110.00 | US$ 256.00 |
| High Capacity Wide model | US$: 1236.00 | US$: 285.00 |
| These leasing numbers are based on good credit and a 60-month lease with a 10% buy-out at the end. For companies with excellent credit the payments could be a little bit lower. We always suggest you ask your local bank as well, since they know you and your company and can often give you a better interest rate. | ||
If you are planning to buy the kiln with a lease or loan, your depreciation cost will be much lower since interest is not taken into account; plus the depreciation period is 7 years. But we believe in taking the most conservative approach in determining the cost of heat treating pallets.
These costs are naturally then divided by the number of pallets in the table below to give you an estimated cost per pallet.
| Model / Pallets per week | 300 | 600 | 1200 | 2400 | 7200 | 10800 | 14400 |
|---|---|---|---|---|---|---|---|
| Piggy-Back Cont. Kiln (400 per load) | 0.90 | 0.59 | 0.43 | 0.35 | |||
| PHT-271111 (300 per load) | 1.12 | 0.69 | 0.47 | 0.37 | |||
| PHT-471111 (600 per load) | 1.17 | 0.67 | 0.42 | 0.30 | 0.22 | ||
| PHT-471212 (600 per load) | 0.74 | 0.46 | 0.32 | 0.22 | 0.21 | ||
| PHT-471412 (800 per load) | 0.48 | 0.33 | 0.23 | 0.21 | 0.20 | ||
| IMPORTANT NOTE: Since the Piggy-back unit utilizes an insulated container or van-body, which are designed for cold storage and not high temperatures. This means that you cannot expect it to last as long. | |||||||
| SIDE-LOADED pallet kilns are not included in the table above, but please call us for details. We do consider the models above the most economical and the side-loaded are better designed kiln but they do cost significantly more. | |||||||
In the long run, based on our experience, you will probably be best off with the PHT-471212 if you expect to heat treat more than 2-3 loads per week. Rarely do we believe the PHT-471412 makes sense due to the much higher freight costs and the fact that it will not have 1.3 loads to heat treat every time. If you know you will heat treat less than 2-3 truck loads per week and do not plan to heat treat for others, then the PHT-271111 will probably be your best choice.
Example of cost Savings: These potential profit calculations are estimates. Please remember that they include leasing costs for the unit, inspection costs, labor costs to operate the unit, and energy costs. So when the first line says $1.25 per pallet, you can see this as the value added to the pallet for heat treating or you can consider it how much you currently pay to have it done (including transport costs to and from the kiln).
Annual profit from operating pallet kiln
| Weekly HT production | Price for HT | Kiln model | Extra profit annually |
|---|---|---|---|
| 600 pallets | $1.25/pallet | PHT-271111 / Junior short | $17,472.00 |
| 1200 pallets | $1.25/pallet | PHT-271111 / Junior short | $48,672.00 |
| 1200 pallets | $1.25/pallet | PHT-471212 / High eff standard | $49,296.00 |
| 1200 pallets | $0.90/pallet | PHT-471212 / High eff standard | $27,456.00 |
| 2400 pallets | $1.00/pallet | PHT-471212 / High eff standard | $84,864.00 |
| 2400 pallets | $0.75/pallet | PHT-471212 / High eff standard | $53,664.00 |
| 7200 pallets | $0.75/pallet | PHT-471212 / High eff standard | $160,992.00 |
We are not sure where your company fits into these numbers, but you can also use the formula to help you see how much you stand to save or profit from a kiln.
Value added (Current cost) - Expense (Table Above) = Saving/Profit per Pallet * # of Pallets * 52 Weeks = Profit/Savings