Litco News
CHEP v. 9BLOC and the Case for Molded Presswood Pallets
Attempts by Wal-Mart, Costco, and other mass retailers to minimize product damage and create greater handling efficiencies have helped the block pallet supplant the stringer pallet in recent years. Initially, the big box block pallet preference prompted many manufacturers to consider solutions from CHEP, a global leader in the pallet rental market, servicing over 300,000 customers worldwide. Although CHEP offered a universally accepted big box pallet solution, the ubiquitous sea of blue came with a price. Some manufacturers disliked the notion of a forced partnership with a distant, corporate entity capable of exercising such control over the supply and demand of the pallet pool. With fewer suppliers contributing to the pool, manufacturers found themselves facing a pallet market fraught with uncertainty. Other manufacturers were reluctant to end longstanding relationships with local pallet suppliers. Despite these concerns, the tide had shifted, and at least in the mass retailer world, traditional stringers lost favor to newer, more expensive block pallets.
The white wood pallet industry has always shown a pronounced entrepreneurial spirit, so it should come as no surprise that smaller, local manufacturers in the US, Canada, and Mexico began exploring avenues to remain viable vendors to their customers doing business with mass retailers. Some white wood pallet suppliers were capable of making the needed capital investments to manufacture block pallets to precise and demanding specifications, but the industry has always possessed a decidedly local and regional nature, making nationwide distribution a challenge. Viability would demand a pooled network of manufacturing, distribution, and repair, an infrastructure that few white wood pallet producers could assemble by going it alone.
Pallet Logistics & Unit Load Solutions, Inc., a non-profit entity doing business as 9BLOC™, is seeking to address this situation by creating a nationwide network of certified, independent manufacturers capable of producing block pallets suitable for use in a wide range of markets, including big box retail. Unlike the CHEP rental business model, 9BLOC customers will have the opportunity to rent, lease, or purchase block pallets based on their specific needs. 9BLOC vendor partners hope to retain their individual corporate identities while leveraging membership in a collective group to better serve the needs of their customers. Although the business model makes sense on paper, the nature of the pallet industry makes this a tall order, and it remains unclear if the critical mass required to position 9BLOC as a truly viable alternative to CHEP is attainable.
Regardless of vendor, for certain applications, block pallets offer an excellent combination of product protection and handling efficiency. With this said, the additional equipment and materials requirements associated with their manufacture make block pallets considerably more expensive than other pallet solutions.
Assuming your products are destined for a big box retailer but are considered “purpose built” or for point of purchase displays, Litco presswood pallets may provide the needed blend of product protection and cost savings, making them a viable alternative to block pallets. A certified sustainable, space saving, nestable design combined with strong, yet light-weight construction makes our pallets easier to handle and store too. To learn more about the presswood alternative to block pallets, or to request a quote, contact Litco International for more information.