The price of your pallets is determined on the base of three components: the price of wood, of transport and of labour. The cost of EPAL pallets are more impacted by the price of wood and transport, in contrast to pooled pallets. And that has got some positive consequences:
1) Rising freight costs do not impact the price of pallet pooling, as less distance is covered.
Pallet pooling is less susceptible to rising freight costs. Normally speaking, a white wood pallet is shipped back to where it came from after use, while a pooling pallet is returned to the nearest service centre. Thanks to the extensive network of service centres and pick-up and return points at customers’ and retailers’ places of business, a pallet that has just been emptied can quickly be used again. If you are exporting goods on a CHEP pallet to Germany or the United States, for example, the pallet will move to the German or American pool respectively, and will not need to be shipped all the way back.
Moreover, CHEP can collect pallets at retailers until the truck is fully loaded. With the exchange system it is usually limited to 3 or 4 piles of pallets because of the one on one exchange. What is more, governments are imposing higher and higher taxes on freight. This does not hit CHEP as hard, since transport costs are less decisive for the price of pooled pallets.
2) The rising cost of timber does not affect pooling as much, thanks to the optimised use of wood and pallets.
The CHEP pooling system is not as badly affected by rising timber prices:
- CHEP has a large network of customers, and not all of them experience peaks in the number of pallets they need at a certain time. By leasing pallets and reusing them only when necessary, fewer pallets are needed than if every customer were to buy its own pallets individually. And fewer pallets mean lower costs.
- CHEP uses less wood to repair pallets. The stateof-the-art automation at our service centres allows us to identify quickly which part of a pallet needs to be replaced. So we only repair that part, subject to our strict quality standards of course. Additionally, there is a growing demand among retailers for pallets made from PEFC® and/or FSC® certified wood. CHEP holds both certifications for all the wood it uses, which is often not the case for second-hand exchangeable pallets.
- CHEP pallets do not get lost as easily as exchangeable white wood pallets. This is because they are the property of CHEP and, as such, protected by law. Their blue colour makes them easy to recognise. CHEP also takes action to prevent its pallets from being traded on the black market.
The use of wood is optimized by the 'share and reuse' model of CHEP. Because of the smaller role that wood plays when setting the price for pooled pallets, the current rise of the price of wood makes pallet pooling more and more relevant.