What Is Pallet Pooling?
Pallet pooling is a shared-use system where a third-party company owns, maintains, and manages a fleet of pallets. Instead of buying pallets outright, participating businesses rent them on a per-trip or per-day basis. When a pooled pallet reaches its destination, the pooling company collects it, inspects and repairs it as needed, and sends it back into circulation.
Think of it as a pallet-sharing economy. The pooling company handles all the logistics of pallet ownership — procurement, maintenance, tracking, and recovery — while users simply pay for what they use.
The Major Pooling Programs
CHEP (Commonwealth Handling Equipment Pool) is the largest pallet pooling company in the world. Their distinctive blue pallets are visible in supply chains across more than 60 countries. CHEP uses a block pallet design and operates on a rental model where customers pay an issue fee when a pallet ships and daily rental fees until the pallet is returned to a CHEP depot.
PECO Pallet operates primarily in North America and uses red-painted block pallets. PECO's model is similar to CHEP but often positions itself as more flexible on contract terms and pricing.
iGPS (Intelligent Global Pooling Systems) takes a different approach, using plastic pallets with embedded RFID tags for tracking. Their lightweight plastic pallets appeal to customers focused on weight savings and hygiene.
9BLOC and other regional poolers offer similar services on a smaller geographic scale, sometimes with more competitive pricing for regional supply chains.
How the Economics Work
The financial case for pooling depends on your pallet flow. Pooling makes sense when:
- You ship to many destinations: The pooling company handles collection from all your recipients, saving you the logistical nightmare of getting pallets back.
- You don't have space for pallet storage: Pooling eliminates the need to store empty pallet inventory.
- Your pallet needs fluctuate seasonally: Rent more during peak seasons, fewer during slow periods.
- You want predictable costs: Pooling converts variable pallet spending into a predictable per-unit rental fee.
Pooling may not make sense when:
- Your supply chain is a closed loop: If your pallets come back to you reliably, owning them is cheaper.
- You ship short distances: The pooling company's collection and transportation costs get passed to you.
- You use non-standard sizes: Most poolers only offer one or two standard sizes.
The Hidden Costs of Pooling
Pooling is not always cheaper than ownership. Watch for these often-overlooked expenses:
- Lost pallet fees: If a pooled pallet doesn't make it back to the pooler's depot, you're charged a lost pallet fee — typically $25–$30 per pallet. In supply chains with poor pallet tracking, these fees add up quickly.
- Transfer fees: When pallets move between participants in the pooling network, transfer fees may apply.
- Sorting requirements: Some poolers require you to sort their pallets from whitewood pallets at your facility. This labor cost is yours to absorb.
- Minimum commitments: Contracts often include volume minimums. Fall below them and you still pay.
- Damage charges: Returning damaged pallets can result in repair or replacement charges beyond the standard rental fee.
Pooling vs Whitewood: A Fair Comparison
"Whitewood" refers to non-pooled, privately owned pallets — the standard unpainted wood pallets that make up the bulk of the pallet market. When comparing pooling to whitewood ownership, consider:
- Total cost of ownership: Include purchase price, repair costs, storage costs, and the revenue from selling or recycling end-of-life pallets.
- Management overhead: Owning pallets means managing them. Pooling outsources that management.
- Flexibility: Whitewood gives you full control over sizes, grades, and specifications. Pooling limits you to what the pooler offers.
For many mid-size businesses, a hybrid approach works best: use pooled pallets for complex, multi-destination outbound shipping, and own whitewood pallets for internal operations and simple point-to-point routes. Universal Pallet Supply can help you find the right balance — we supply the whitewood side of the equation, in whatever grade and quantity you need.