Pallet pooling is an alternative to purchasing pallets outright. In a pooling arrangement, a third-party provider owns and manages a large fleet of pallets that are rented to businesses on a per-use basis. Major pooling companies include CHEP (with their distinctive blue pallets), PECO (red pallets), and iGPS (plastic pallets). The pooling model has grown significantly over the past two decades and now accounts for a meaningful share of pallet usage in North America, particularly in the consumer packaged goods and retail sectors.
The pooling model works as follows: you rent pallets from the pooling company, load them with your products, and ship them to your customers. Your customer then arranges for the pallets to be collected by the pooling company from their receiving location. The pooling company inspects, repairs, and reissues the pallets into the pool. You pay a per-trip fee plus any applicable transfer or loss fees. The pooling company handles all maintenance, repair, and logistics of the pallet fleet.
There are several advantages to pooling. You do not need to invest capital in purchasing pallets or manage pallet inventory. Pooled pallets are consistently high quality since the pooling company maintains them. The model is well-suited for one-way shipments where pallet retrieval would be impractical. Major retailers often prefer receiving shipments on pooled pallets from recognized providers. On the other hand, pooling can be more expensive per trip than owning recycled pallets, especially for businesses with high-volume, repetitive shipping lanes where pallets can be easily returned.
To determine whether pooling is right for your business, calculate your total cost of pallet ownership (purchase, storage, repair, retrieval, and disposal) and compare it to pooling fees for equivalent volume. Consider factors like your shipping patterns, customer requirements, storage capacity, and whether you have the resources to manage pallet inventory. Many businesses use a hybrid approach, owning pallets for regular shipping lanes and using pooled pallets for irregular or one-way shipments. The right answer depends on your unique operational circumstances.
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