Ikea expects to save millions in transport costs with its paper pallets.

Global furniture retailer Ikea Group has launched a cardboard alternative to the wooden pallets that have dominated world trade for over five decades.

Ikea, which uses 10 million pallets to supply its stores, will now use a lighter, thinner, paper-based alternative the company says will save it 10% in transport costs.

Sustainability manager Jeanette Skjelmose says Ikea doesn't know if the paper pallet is the ultimate solution, but thinks "it's better than wood". Made from folded corrugated card, the paper pallet can support a load of 750 kg, the same as timber. Ikea's 1,200 global suppliers will assemble the pallets from locally sourced card. The pallets are one-third the height of wooden pallets, at 5 cm and 90% lighter at 2.5 kg.

They are expected to save the company thousands of truck trips and cut its transport bills by EUR140 million (USD193 million) a year - at a cost of EUR90 million (USD122 million) for paper purchases and new forklifts.

Skjelmose told Bloomberg that Ikea hopes this will be a start in making transportation systems smarter and freight as compact as possible. Ikea will help with the transition by shipping ready-to-assemble pallets to some of its suppliers. About 330 of them are in China.

The paper pallets are designed to last for a single journey and could challenge pooling systems used by many large companies.