Broken pallets from customers

The problem: We almost got a non-conformance for broken pallets and he heavily implied that it will be a non-conformance if he does our next audit and he sees them.

The issue: We are a 3PL and 2 of our customers just beat the heck out of their pallets.  They come in to us with pieces missing off the front and/or loose shards of wood peeling or sitting on the bottom boards.   Trailers have to be swept out each time we unload and the warehouse floor swept after we put them away or pull them for shipping. These products come in and go out in full pallets.  Neither customer wants to pay us for rethrowing these onto good pallets, and neither plan to "buy better quality pallets" as the auditor suggested.  If items are leaning over or the pallet is outright unusable, we have to send the customer a picture before they will authorize us to rethrow it.  We do store product by customer so there is no risk of foreign material damage to other customers.

The question: Can we get a non-compliance because a customer refuses to follow, or require their suppliers to follow, good pallet procedures?  One of these customers is our biggest one and it's just one of their suppliers that this is an issue for (about 10% of the items we store for them).  We send them several pictures every load and they just don't seem to care.  The other customer is our second largest, and newest, customer and we get stuff directly from them after they've manufactured it.  They are less than 100 miles away and we have had several inbounds come in with tipped loads, damaged product, and smashed pallets.

The solution: ???  Other than sweeping up after the pallets move and getting on my guys about picking up broken pallet pieces when they see them (I pick up several every time I walk the warehouse) I don't know what else to do when an auditor walks past a pallet in the rack that is missing half of the top leading board.  We can show emails to customers showing the state of the pallets and their responses (or lack thereof) on us moving product to good pallets.  

Any suggestions, thoughts, comments?  I think I'm overthinking this to death, but it's extra frustrating because it's out of my control.

We have a pallet program, sounds like your company does not have a policy/program.

If you ship stuff to a storage facility, would you expect them to replace damaged pallets and use their staff without compensation? 

We have a pallet program.  It covers inspecting inbound pallets and reporting damage to the company that purchased them (if they are empty) or owns the product on them.  We do not own any pallets, full or empty.

My company is not going to purchase pallets or provide free manhours to rethrow pallets of products that do not belong to us.  Most of our customers send us empty pallets to use for their products and will pay for the manhours to rethrow pallets as part of our inbound procedures.  2 companies do not and have to approve and account for all pallets, new, used, and damaged, because they don't want to pay to replace the pallet or the for the man hours needed to move product onto an better pallet.  

I'm not worried about severely damaged pallets.  If it's missing a sideboard or has damaged product, customers do approve those.  I'm mainly talking about pallets where product doesn't come to the edge at the front and has a split top or bottom board that has splintered off or is hanging off because someone ran a lift into it.  Pallets that are damaged but "usable" and wouldn't be given a second thought at my last facility that was non-food.  

If a customer puts product on a pallet, then breaks off parts of the pallet and sends it to us, how is that a non-conformance on our part?

I suppose strictly speaking, you should be rejecting them would be the auditor argument.

I'm not sure if the previous reply meant this but there are pallet hire programmes in the UK at least (not sure if you have the same) so while there's a labour cost too of inverting onto another pallet, the actual pallet cost is covered.  Chep are the most popular over here.

For me, and I'm not an SQF expert but I'd document the heck out of it.  I'd include every time you've sent feedback to the customers about damaged pallets.  I'd include your H&S concerns in that as actually tipped / fallen pallets are a significant health and safety risk (sometimes that gets peoples attention).  Then if you really can't replace the pallets which are at the level of damage the auditor saw, I'd do a risk assessment on whether it is or isn't a food safety risk.  

Another idea to at least show that you're taking it seriously is to have regular connects with your customers on KPIs.  I'm sure they have some for you too.  But as part of that if you start tracking fallen pallets and also damaged but not fallen you can see if they're getting better.

I know they're your supplier but also if you go to their site I think you'll find one or all of these things.  Firstly the pallets are already damaged before they're used.  Why not see if they can at least rule that out?  Secondly, they have absolutely appalling fork lift drivers.  If they don't solve that, they will end up with a serious injury, serious loss of stock or even a death.  I'm not joking.  There was a famous case in the UK of a cheese maturation store where the whole thing collapsed on a driver.  Lastly they're not properly securing their loads in the vehicles.  I'd take a colleague who works in H&S and is an expert in workplace transport with me to go and look into this as an "offer of help" for the customers.  

Then I'd politely write the whole thing up, record it, keep tracking if things do or don't get better and when the auditor next comes you can show them the work you've tried to stop this recurring but to no avail in all likelihood but you have shown it's not a food safety risk and that you've done everything in your power.

The auditor isn't wrong (but I see your point)

The contract with these customers needs to be bulletproof. If it currently doesn't state ANYTHING about pallet condition upon arrival, I get it your hands are tied

I would be rejecting the loads at the dock,  they will figure it out quickly

no, you are not responsible for their product BUT your are responsible for your facility