Pallet pooling is a shared-use logistics model in which pallets are rented rather than purchased outright. A pooling company owns, maintains, and manages a large fleet of standardized pallets that are circulated among multiple users throughout the supply chain. Pooling has grown significantly over the past three decades and now accounts for a substantial share of pallet usage in the grocery, consumer goods, pharmaceutical, and retail sectors. Understanding how pooling works, what it costs, and whether it fits your business model can help you make a more informed pallet management decision.
How Pallet Pooling Works
The basic pooling model follows a closed-loop cycle:
Issue: The pooling company delivers a specified quantity of pallets to the manufacturer or shipper. The pallets are typically high-quality, standardized units that meet strict dimensional and structural specifications. The most common pooled pallet in North America is the 48x40-inch format.
Use: The manufacturer loads products onto the pooled pallets and ships them to distributors, retailers, or other destinations. The pallets travel through the supply chain carrying goods just like any owned pallet would.
Collection: When the pallets reach their destination, the receiving facility notifies the pooling company. The pooling company arranges pickup, either directly from the receiver or through designated collection points (often called "depots").
Inspection and Repair: Collected pallets are returned to the pooling company's service centers, where they are inspected, repaired if necessary, cleaned, and returned to the available pool for reissue. The pooling company bears all costs associated with maintenance and repair.
Reissue: Refurbished pallets are delivered to the next user, and the cycle repeats. A well-managed pooled pallet can complete 20 to 40 trips before requiring major repair or retirement.
Major Pooling Companies
The pallet pooling industry is dominated by a few large companies:
CHEP (Commonwealth Handling Equipment Pool): The world's largest pallet pooling company, owned by Brambles Limited. CHEP's distinctive blue pallets are found in supply chains throughout North America, Europe, Asia, and Latin America. CHEP operates a fleet of over 300 million pallets and containers worldwide and serves customers in the grocery, consumer goods, beverage, and automotive sectors. CHEP pallets are typically high-quality hardwood or engineered softwood and are well-maintained.
PECO Pallet: The second-largest pallet pooler in North America, identified by distinctive red pallets. PECO operates primarily in the United States and focuses on the grocery and consumer packaged goods supply chains. PECO pallets are block-style hardwood pallets known for their durability and four-way fork access.
iGPS (Intelligent Global Pooling Systems): A smaller pooler that uses plastic pallets equipped with RFID tracking technology. iGPS targets customers who need lightweight, hygienic, and trackable pallets, such as pharmaceutical and food-grade applications.
9Bloc: A newer entrant using a block pallet design and focusing on competitive pricing to challenge the CHEP-PECO duopoly.
Costs of Pallet Pooling
Pallet pooling costs are structured differently from outright purchase. Instead of buying a pallet for a one-time price, you pay ongoing fees:
Issue fee: A per-pallet charge paid each time pallets are delivered to you. This typically ranges from $4 to $8 per pallet.
Daily rental fee: A per-pallet, per-day charge for as long as the pallets remain in your possession. This ranges from $0.01 to $0.04 per pallet per day, depending on volume and contract terms. While this sounds small, it adds up quickly for large inventories or slow-moving supply chains.
Transfer fee: A charge assessed when pallets are transferred from one user to another within the supply chain. This fee varies by route and is meant to cover transportation and administrative costs.
Lost or damaged pallet fees: If pooled pallets are lost, damaged beyond repair, or not returned, the user is charged a replacement fee. These fees can be significant — $25 to $35 per pallet for CHEP and PECO — and are a common source of disputes.
Benefits of Pallet Pooling
No upfront capital investment: You do not need to buy pallets or tie up capital in pallet inventory. This is attractive for startups and businesses with tight cash flow.
Consistent quality: Pooling companies maintain strict quality standards. You always receive pallets that meet dimensional and structural specifications, which is important for automated handling and retail display.
Reduced management burden: The pooling company handles pallet procurement, repair, disposal, and logistics. Your team does not need to manage pallet inventory, schedule repairs, or arrange disposal.
Sustainability credentials: Pooling companies reuse pallets extensively, resulting in lower per-trip environmental impact compared to single-use pallets. The shared-use model aligns with circular economy principles.
Drawbacks and Considerations
Ongoing costs: Pooling fees never stop. Over the life of a pallet, pooling often costs more than buying and managing your own pallets, especially for businesses with efficient internal pallet management programs.
Complexity of tracking: Users are responsible for tracking pooled pallets and ensuring they are returned or properly transferred. Failure to do so results in lost pallet fees. For businesses with complex supply chains or many shipping destinations, tracking can be burdensome.
Limited control: You cannot modify, mark, or brand pooled pallets. You must return them in acceptable condition. You are dependent on the pooling company for supply, quality, and service.
Regional availability: Pooling companies have strong networks in major metropolitan areas but may have limited coverage in rural or remote areas, including parts of New Mexico outside the Albuquerque and Santa Fe corridors.
Pooling vs. Buying Recycled Pallets
For many businesses in the Albuquerque area, purchasing recycled pallets offers the benefits of pooling — consistent quality, lower cost than new pallets, and environmental responsibility — without the ongoing rental fees, tracking requirements, and potential for lost pallet charges. With recycled pallets, you own the pallet outright. Use it as many times as you want, store it as long as you need, mark it, modify it, and when it reaches end of life, sell it back for recycling.
At Albuquerque Pallets, we provide a straightforward alternative to pooling programs. Our recycled pallets meet the same quality standards at a fraction of the ongoing cost. Contact us to compare the economics of pooling versus purchasing for your specific pallet volumes and usage patterns.