The heat shrink-hooding method provides very good pallet load stability and protection; it works particularly well with loads that have a substantially smaller footprint than the pallet as the film will shrink tightly around the contours of the pallet and load.
The operating costs of a heat shrink-hooding system are higher than those of both spiral stretch-wrapping and stretch-hooding. Because the film bag is shrunk (as opposed to stretched), it must have a larger pre-shrink circumference than the perimeter of the pallet load so that the equipment can apply the bag over the pallet load prior to the application of heat—requiring substantially more film than stretch-hooding. Using significant energy consumption for heating, the heat shrink-hooding method also carries the risk of fire, which can often mean higher insurance premiums to protect against potential losses. 
Additionally, heat shrink-hooding equipment can be more maintenance-intensive compared to the other two methods.
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