The Ultimate Guide to Pallet Pooling Programs

Pallet pooling is a shared-use model where a pool operator owns, maintains, and manages a fleet of pallets that are rented to shippers on a per-trip or per-day basis. Instead of buying, storing, repairing, and disposing of pallets, you simply rent the pallets you need, use them for your shipment, and the pool operator handles everything else including collection, repair, cleaning, and redistribution.

The pooling model has been growing steadily and now accounts for approximately 25 percent of pallet transactions in the United States. For the right operation, pooling can significantly simplify logistics, reduce costs, improve pallet quality consistency, and support sustainability goals. However, pooling is not universally the best choice. This guide explains how pooling works, evaluates the economics, and helps you determine whether it is right for your business.

How Pallet Pooling Works

1. 1You contract with a pool operator for a specified volume of pallets at an agreed rental rate
2. 2The pool operator delivers clean, inspected pallets to your facility on your schedule
3. 3You load your products onto the pooled pallets and ship them to your customer
4. 4Your customer unloads the products and makes the empty pallets available for collection
5. 5The pool operator collects the empty pallets from your customer location
6. 6Collected pallets are returned to the pool depot for inspection, cleaning, and repair
7. 7Refurbished pallets re-enter the pool for the next rental cycle
8. 8You are billed based on the number of pallet issues or rental days, depending on your contract

Major Pallet Pooling Providers

The pallet pooling market in North America is dominated by a handful of major providers. CHEP, a division of Brambles Limited, is the largest with a pool of approximately 350 million pallets globally. Their distinctive blue pallets are ubiquitous in grocery, consumer goods, and retail supply chains. PECO Pallet operates a pool of approximately 30 million red pallets primarily in the grocery and consumer products sectors. iGPS operates a fleet of approximately 8 million plastic pallets targeting the food and pharmaceutical industries. Kamps Pallets provides a hybrid model combining pooling with pallet recycling and management services.

The Economics of Pooling

Pooling economics depend on several factors including your pallet volume, shipping lanes, customer locations, and the speed at which pallets are returned. A typical pooling rental costs 5 to 10 dollars per pallet issue, which includes the pallet rental, delivery, collection, and maintenance. This compares favorably to the total cost of ownership for purchased pallets when you factor in purchase price, storage, repair, disposal, and management labor.

However, pooling contracts often include transfer fees that apply when pallets move outside the pool operators network, when pallets are lost or damaged beyond normal wear, or when pallets are not made available for collection within the specified time window. These fees can add 3 to 15 dollars per pallet and can significantly increase your effective cost if not managed carefully.

Advantages of Pooling

• Eliminates the need to purchase, store, and manage pallet inventory
• Converts a variable capital expenditure into a predictable operating expense
• Guarantees consistent pallet quality since the pool operator maintains strict standards
• Supports sustainability goals through maximized pallet reuse and reduced waste
• Reduces pallet management labor at your facilities
• Provides access to pallet tracking and reporting data through the pool operators systems
• Simplifies compliance with retailer pallet requirements since most major retailers accept pooled pallets

Disadvantages and Risks

• Less cost-effective for low-volume shippers who lack the scale to negotiate favorable rates
• Transfer fees and loss charges can erode savings if your supply chain has poor pallet recovery
• Long-term contracts may lock you into pricing that becomes unfavorable if market rates change
• You are dependent on the pool operators collection network, which may not cover all your delivery locations
• Customer resistance: some receiving locations prefer white-wood or do not want to manage pooled pallet returns
• Limited pallet sizes: most pool operators only offer the standard 48x40, limiting flexibility for non-standard applications
• Audit complexity: reconciling pallet issues, returns, and fees requires dedicated administrative attention

Is Pooling Right for Your Business?

Pooling tends to work best for businesses that ship high volumes of 1,000 or more pallet loads per month on consistent lanes to a relatively concentrated set of receiving locations, particularly major retailers. If your distribution pattern involves hundreds of small deliveries to diverse locations, the pool operators collection logistics become difficult and expensive, and you may be better served by purchasing recycled pallets.

The best approach for many businesses is a hybrid model: pooled pallets for high-volume lanes to major retail customers where the pool operator has efficient collection, and purchased recycled pallets for everything else. This captures the benefits of pooling where it works best while maintaining flexibility and cost control for the rest of your pallet needs.

Pallets Eco as Your Pallet Management Partner

At Pallets Eco we do not operate a pooling program ourselves, but we work alongside pool operators as a complementary partner. We supply the recycled and new pallets you need for applications outside the pooling model, manage your pallet return and repair programs, and handle end-of-life pallet recycling. Many of our customers use CHEP or PECO for their retail lanes and Pallets Eco for everything else. Contact us to discuss a comprehensive pallet management strategy that leverages the best of both models.