Pallet pool programs operate large fleets of standardized pallets rented per-use to multiple shippers.
Detailed Definition
A pallet pool program is a rental system in which a pool operator owns a fleet of standardized pallets and issues them to manufacturers, who ship goods on them to retailers and distributors. The operator then collects the empties from those receivers, inspects and repairs them at service centers, and issues them again. The best-known US pools are CHEP and PECO, which rent wood block pallets, and iGPS, which rents plastic pallets. Fees usually combine handling or issue charges, rental time and charges for pallets that go missing, which the industry calls leakage.
How a pallet moves through a pool
A pooled pallet follows a loop. The operator delivers pallets to a manufacturer, the manufacturer loads and ships them to a customer such as a grocery distribution center, and the operator later collects the empties from that customer. At a service center the pallets are sorted, inspected and repaired, then sent out again. Throughout the loop the pallet stays the operator's property. Users typically report each shipment of pooled pallets to the operator so responsibility for those pallets moves to the receiving location.
What a shipper should check before joining
- Whether your main customers accept and return pooled pallets, since the model depends on receivers taking part.
- The full fee structure: issue or handling fees, rental by time, transfer fees and charges for unaccounted pallets.
- Reporting duties and the systems or EDI links needed to record shipments.
- How pallets are handled for customers outside the network, including export loads.
- Footprint, material and construction, so the pallet suits your racking and automation.
Pool pallets versus white-wood pallets
A white-wood pallet is bought and owned by the user, who can reuse, sell or recycle it. A pool pallet is never the user's to sell or keep. Pallet recyclers that collect pool pallets with mixed loads generally return them to the operator. Comparing both models on delivered cost, return rates and administration is covered under pool vs buy.
Authoritative Sources
- Consumer Brands Association (formerly GMA) (CBA): the trade association whose 48x40 inch pallet standard (the "GMA pallet") became the dominant US pallet specification.
Related Glossary Terms
Frequently Asked Questions
Can I buy pallets from a pallet pool program?
Generally no. In a pool program the operator owns the pallets and rents them, so users pay for their use rather than buying them. If pooled pallets arrive at your facility from a supplier, they still belong to the pool operator. The usual step is to store them separately and arrange collection through the operator. Reusing them for your own outbound shipments outside an agreement, or selling them, can lead the operator to treat the pallets as lost or misappropriated property.
What does leakage mean in a pallet pool?
Leakage is the loss of pallets from the pool's controlled loop. It happens when pallets are kept, sold, scrapped, shipped to places the operator does not collect from, or simply not reported. Because lost pallets must be replaced, operators build leakage into their pricing or charge users for pallets that cannot be accounted for. Accurate shipment reporting and shipping only to receivers that take part in the pool help reduce it.
Do pallet pools work for export shipments?
Pools are built around domestic or regional collection networks, so a pallet shipped overseas may never come back. Check the operator's rules before exporting on pooled pallets, as some restrict it or offer separate arrangements. Wood pallets used for export must also meet ISPM-15 treatment and marking requirements. Many exporters use one-way purchased pallets, or plastic or engineered wood pallets that are outside ISPM-15, for international loads.