Pallets: Pallet pooling for the other guys

Upstart PECO Pallet brings competition to the pallet pooling market

By ·

Are you red, or are you blue?

For pallet pool users, that’s not a political question, even if we are in the election season. It’s a matter of whether you prefer the ubiquitous blue pallet from CHEP or the red pallet from PECO Pallet

For years, CHEP was the only game in town when it came to leasing or renting pallets from a pallet pool. Today, CHEP is still the dominant player in the market, with a 90% share, according to CHEP’s estimate. But, they are no longer the only player in town.

Launched in 1997, upstart PECO Pallet has offered an alternative to CHEP with its signature red 48- x 40-inch wooden block pallet. Today, PECO has a pool of 5 million pallets, about 8% the size of CHEP’s pool, 136 depots across the country, and is accepted at more than 450 retail distribution centers across North America, including the top supermarket chains and discount retailers.


There are a number of similarities between the two companies, starting with the ordering process: A PECO customer places an order for pallets 72 hours before they’re needed, primarily in full truckload quantities. Most PECO customers place orders on the Web. The rental period begins when PECO delivers the pallets to a manufacturer, and it ends when the manufacturer reports that it has shipped the pallets to its customer. Later, PECO picks up the empty pallets at distribution centers or retail stores and returns them to a depot center, where they are sorted, inspected, cleaned and repaired. 

What then is PECO’s competitive advantage? The simple answer is that they aren’t CHEP. “We look at the playing field as an oligopoly, and we bring an alternative to CHEP to the market,” says David Casarez, director of sales. While most of us would love a corner on the market in our own businesses, as customers we know that competition is a good thing. 

But beyond that, PECO believes there are a few differences in how they approach the market and customer service, says Casarez.

For one, given that a significant portion of PECO’s business is in the grocery industry, PECO pallets aren’t used to ship industrial products that might contaminate a pallet.

PECO argues that it has a more rigorous inspection, cleaning and repair process than any of the pallet management and repair services on the market. As a result, “we believe we have the lowest total lifecycle cost per pallet in the industry,” says Casarez.

And finally, while PECO declined to discuss rental rates, the company bills customers one flat rate per pallet, rather than an issue fee and a rental rate. “We understand our customers volumes on a monthly basis and how long they stay in the supply chain,” says Casarez. “That allows us to offer a simple, straight-forward, all-in-one price per pallet. When you place an order, you’ll know exactly what it’s going to cost.”

Reader survey: From wood to plastic to pallet pools, our readers tell us what’s important in pallets.

Pallets and containers: A CHEP off the old block
More than a decade after entering the North American market, CHEP continues to be the leader in pallet pooling.

Pallets and containers: The plastic pool alternative
iGPS offers pallets users an alternative to wood

Reusable containers: Putting a cap on your container needs
CAPS does for reusable containers what CHEP does for pallets


About the Author

Bob Trebilcock
Bob Trebilcock, editorial director, has covered materials handling, technology, logistics and supply chain topics for nearly 30 years. In addition to Supply Chain Management Review, he is also Executive Editor of Modern Materials Handling. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.

Subscribe to Modern Materials Handling Magazine!

Subscribe today. It's FREE!
Find out what the world’s most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today!

Article Topics

Pallet Pool · Pallets · PECO Pallet · · All Topics
Latest Whitepaper
Mobile Solutions: Improving Supply Chain Efficiencies
To meet customer's ever-increasing service expectations and improve their business efficiency, companies are looking to their supply chain operations – especially material handling and warehouse operations managers.
Download Today!
From the February 2017 Modern Materials Handling Issue
In warehouses and DCs, planning solutions tend to take a back seat to execution system functions. Vendors are working to boost the trust factor using tools that break down forecasts and blend with analytics.
Automated Storage on the Move
Receiving 101: Setting the Table for Success
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2016 Warehouse/DC Operations Webcast: Confronting omni-channel complexity
During this webcast we’ll examine the current activities, trends, and best practices in warehouse and DC operations management and how companies plan to address complex issues associate with omni-channel fulfillment.
Register Today!
EDITORS' PICKS
Johnson & Johnson: A vision for automation
J&J Vision Care brings together a variety of automated technologies, including an innovative...
Using AGVs at LEDVANCE
The lighting manufacturer reaped savings by reducing maintenance costs and product damage, and using...

System Report: Sustainable Distribution at REI
Specialty outdoor retailer REI’s new distribution center brings together the next generation of...
System Report: Whirlpool puts mobile robots to work
In Whirlpool Corp.’s Clyde, Ohio, factory, mobile robots have automated the delivery of parts to...