Pallet pooling is a circular-economy model. It allows pallets to be rented and shared by different shippers. This way, they are reused instead of being sold as disposable products.
Blue CHEP pallets and red PECO pallets in North America can’t be bought, traded, or reused by end users.
They stay on hire and must always be returned to the pooling network as per contract terms.
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Historical Evolution of Pallet Pooling
Origins of the Modern Pallet
Early pallet ideas go back thousands of years to ancient Egypt and Mesopotamia. There, simple wooden skids were used to move goods by hand. The forklift was invented in 1915. This led to a need for raised platforms. In 1939, the first four-way wooden pallet was patented. This invention improved handling efficiency.
World War II Standardization
The U.S. military’s needs in World War II created standard pallet sizes, like 32×40 in and 48×40 in. They also developed four-way entry designs. By the war’s end, all shipments were on pallets. This made pallets crucial for logistics.
Birth of CHEP and Formal Pooling
In 1946, Australia launched the Commonwealth Handling Equipment Pool (CHEP). It came from leftover military pallets and set up the first formal pallet-pooling system. Brambles acquired CHEP in 1958, privatizing and expanding pooling globally.
CHEP’s Circular Business Model
CHEP has 345 million pallets, crates, and containers in 60 countries. They serve more than 500,000 customers at 750 service centers. The pooling model focuses on “pallets as a service.” Companies only pay for the platforms they use. CHEP handles inspection, repair, and logistics.
Ownership and Legal Framework
CHEP Ownership: All blue CHEP pallets are owned by CHEP. Hire agreements do not allow resale, repurposing, or destruction.
PECO Model: PECO’s red pallet network has pooling contracts and return obligations.
Return Logistics and Asset Recovery
Return Mechanisms
Customers return empty CHEP pallets at no charge via:
MyCHEP Portal: Schedule free pallet pickups online at any North American location. We serve over 530 CHEP depots.
Customer Service Line: Toll-free phone requests for ad-hoc or scheduled collections.
Asset Recovery Program (ARP)
CHEP’s ARP incentivizes registered third-party recyclers:
U.S. recyclers get paid $1.75 to $2.84 for each pallet they deliver to CHEP sites. This is part of the March 2022 ARP expansion.
Participation: About 1,800 recyclers worldwide take part in the ARP. They return millions of pallets each year.
Enforcement and Compliance Risks
Unauthorized sale or keeping of blue CHEP and PECO pallets breaks hire agreements. This leads to:
Contractual Penalties: You can recover unpaid hire fees and legal costs. Also, damaged pallets may be forfeited.
Asset Protection Actions: CHEP’s teams took back nearly 100,000 illegally sold units. They often joined forces with law enforcement to do this.
These measures protect pool integrity, ensuring availability and quality for legitimate users.
Global Market Landscape
Key Industry Players
Other key pallet-pooling companies are Euro Pool Group, Loscam, Ifco, iGPS Logistics, Faber, and PPS Midlands, in addition to CHEP and PECO. The global market is very fragmented. The top three providers hold about 65% of the market share.
Market Size and Growth Projections
Market Value: The pallet-pooling market was worth USD 10.25 billion in 2025. It is expected to grow to USD 20.49 billion by 2032, with a CAGR of 10.4%.
Regional Insights: North America and Europe take the lead with tough sustainability rules and strong manufacturing. At the same time, Asia-Pacific is expanding fast due to industrial growth and the rise of e-commerce.
Technological Innovations
RFID and IoT Tracking
CHEP’s UHF RFID tag pilot offers real-time visibility of assets. This improves loss prevention, tracks cycle times, and detects damage. Collaboration with EAN.UCC standards bodies paves the way for global RFID adoption.
Digital Logistics Platforms
Loscam Online: Offers clients end-to-end pallet tracking, account management, and damage reporting.
CHEP MyCHEP: Integrates digital scheduling with ARP credits tracking to streamline returns and compensation reconciliation.
Sustainability and Life-Cycle Benefits
Independent life-cycle analyses affirm substantial environmental advantages of pooling:
Waste Reduction: CHEP wooden pallets generate 50% less solid waste versus single-use pallets.
Energy Savings: 19% less energy use than white wood pallets and 23% less than pooled plastic options.
Re-use Cycles: A CHEP wooden pallet can be reused about 30 times. This cuts down the need for new lumber.
Forest-Positive Impacts: Brambles’ FY23 report shows that sustainable timber sourcing led to the growth of 3.85 million extra trees.
These metrics support CHEP’s 2025 goals. The company aims to absorb more carbon than it emits and to become waste-positive.
Alternatives for Non-Pooling Pallets
Businesses holding unauthorized blue pallets or standard wooden pallets can explore secondary channels:
Local Recyclers: Purchase used pallets at $4–$10 per 48×40″ unit based on grade and region.
Scrap Services: Offer $0.50–$2.50 per pallet or free bulk removal.
Pallet Repair: Recycled pallet refurbishing includes checking, replacing boards, and grading. This process can extend the pallet’s life, recycling or repairing up to 95% of used pallets.
Economic Impacts and ROI
Pooling helps cut costs by removing the need for upfront capital, reducing damage during handling, and outsourcing management of assets. ROI analyses for automotive and FMCG sectors showcase:
Pallet losses can fall by as much as 50% when moving from buy-and-dispose to pooling.
Lower Labor Costs: Standardization and less manual handling save 10–15% in warehousing labor.
Less Downtime: RFID and digital visibility cut order cycle times by 5–7%. This boosts supply chain reliability.
Future Outlook
By 2025, CHEP aims to:
Elevate Circularity: Increase pallet recovery rates above 98% across all regions.
Scale Digitalization: Roll out RFID and IoT tracking for 25% of its global pool.
Expand Partnerships: Add 500 recyclers to the ARP. Encourage teamwork to improve backhaul logistics.
The global pallet-pooling market will keep expanding. This rise is fueled by sustainability goals, digital progress, and the idea of a circular economy.
