A globalised share-and-reuse system of pooling allows for adaptability, cost savings and global best practices.

Supply chains are becoming increasingly complex. They have a global reach, health-and-safety compliance is non-negotiable, and developed markets demand sustainable processes. Markets have become more competitive than ever. Manufacturers and retailers alike must aim to find greater efficiencies wherever possible, while driving a socially and environmentally positive organisational agenda.

The solution to many of these challenges is an established supply-chain function – pooling. Pooling is based on the concept of the share and reuse model underpinned by the principles of the circular economy. The main benefit of renting supply chain pallets and equipment through a pooling service is that the customer is no longer responsible for balancing the logistics of getting their products to market against the conflicting logistics of retrieving empty pallets or equipment. The pool handles this reverse supply chain by delivering equipment in the quantities ordered and dealing with that equipment once they’ve reached the end of the supply chain.

Pay per use

For a customer, owning supply chain equipment means the equipment becomes an obligation whenever it’s not in use. After usage, there are several costs then associated with the overall purchase, comprising its retrieval, quality assurance, storage, and maintenance, to name a few. Customers who purchase their own equipment inevitably incur a higher overall cost to manage this function.

It makes far more sense for organisations to hire pallets or containers and pay for the usage while their goods are in transit. With the pooling model, the equipment is returned to the pool after use, and are no longer the responsibility of the customer.

A company such as CHEP, with approximately 300 million pallets and containers in circulation worldwide, is able to use economies of scale to provide cost effective solutions to customers. CHEP’s circular business model enables it to serve its customers through devising smart solutions for every partner in the supply chain thereby minimising the impact on the environment and improving the efficiency and safety of supply chains across the world.

For instance, CHEP’s Returnable Plastic Containers (RPCs) enable fresh produce suppliers all around Sub-Saharan Africa to pack and ship fresh food, streamlining the way products are delivered and presented throughout the retail sector. The RPCs are suitable for retail display, storage and transport, they are cost effective, easy and safe to use, eliminating single-use packaging, the associated environmental impact and the significant costs of cardboard disposal from the supply chain. With the added benefit of being collapsible, empty crates can be stored flat to optimize storage and transportation. This means that more crates can be loaded on a truck resulting in a reduction of truck trips and CO2 emissions.

Pallets, containers and supply-chain logistics are specialised areas. Companies can unlock far more value by focusing on their core business and outsourcing their supply chain requirements from pooling specialists on a pay-per-use basis.

Economies of scale

Pooling works due to scale and an extensive global infrastructure. At CHEP, we have built this scale with over 60 years of supply chain experience, supporting over 500,000 customer touch-points and best in class service, to be a market leader – we are the invisible backbone of the global supply chain.

Our network of more than 85 service centres across Sub-Saharan Africa allows customers to for example, hire in Johannesburg, and de-hire somewhere else in the country or even outside of the country, like Windhoek. We are available in more than 60 countries across the world. CHEP’s intercontinental capabilities assure customers that their goods are well protected, transport modes are fully utilised, and that their supply chain efficiency is improved. Having a worldwide network of service centres also means products such as pallets, RPCs, bulk bins, automotive crates, or retail-ready pallets are available at all times, to meet customers’ needs.

These products also require constant monitoring and maintenance, and specialist supply chain businesses have the systems to facilitate this efficiently. Using its network advantage and asset management expertise, CHEP can seamlessly connect supply chain participants, facilitating collaboration and ensuring a more efficient flow of goods through the supply chain.

By adding a digital layer to our physical network, we can shine a light on invisible areas of the supply chain. Through our global digitisation projects, we can make our assets intelligent, generating data and real-time analytics that will drive better decisions in stores, track fresh food and improve operations. By experimenting with materials, formats and testing packaging we can find new ways to meet changing consumer demands.

Quality standards

Besides the financial benefits, there are also quality benefits to pooling. Many multinational brands use established pooling providers to ensure the highest quality for their products.

Products must be presented on shelf or delivered to the end consumer in the same condition they leave the factory. This requires pallets and containers that can withstand the rigors of moving from factory to truck, to warehouse, and then to the retail or wholesale store.

At CHEP, standardisation has been key to unlocking the value benefits of pooling. In a pooling network, platforms are collected and sent to specialised service centres where they are inspected and, if necessary reconditioned to ensure they meet the required quality standards. This also ensures that standard size pallets and containers are of a consistent quality and suitable for automated processes.

The CHEP Returnable Plastic Crate (RPC) facility in Gauteng South Africa, has received the Brand Reputation through Compliance Global Standard (BRCGS) certification (highest possible rating of AA) by the globally accredited Certification Body Control Union. This certification standard for food quality and safety is reserved for top organizations within the global food supply chain that exemplify elevated standards for quality, plant hygiene and product safety. In addition, CHEP has Hazard Analysis Critical Control Points (HACCP) certified sites to wash and clean their containers after each use.

Worldwide platform suppliers like CHEP must always comply with the latest industry standards for customer service, technology, and maintenance. By using a certified and compliant supplier, customers are then also following global best practice.

Instant agility

Having an international presence means that pooling organisations are always collaborating with partners across the globe making pooling operators agile, and able to help customers become more competitive.

The pooling model also accommodates seasonal demand changes. Customers can always find pallets and containers available during peak periods and can then return pallets to the pool during off peak periods.

Increasing sustainability

The share and reuse of platforms means fewer resources are wasted thereby decreasing overall costs – the very definition of the circular economy model that many sectors are shifting toward. In a resource-constrained world, circular business models like those operated by CHEP are recognised as a practical business solution enabling the world to trade more responsibly. By replenishing what it extracts and providing its products via a service, CHEP helps reduce empty transport miles, decreasing the overall CO2 impact to the environment, and both the constant pressure on finite natural resources and waste production typical of conventional linear business models.

With the pooling system, customers rent the platforms they need. CHEP controls the entire administrative procedure, retrieval and quality assurance of the platforms in a closed-loop system. By returning CHEP platforms back into the supply chain pool for refurbishment and reuse, our customers help eliminate carbon emissions and keep waste out of landfills. Returning CHEP platforms is not only a legal requirement, but it also translates into financial and sustainability gains as well as also improves business operations for customers.

Ultimately, any manufacturer or consumer-goods supplier wanting to be globally competitive should consider becoming part of the circular economy and partnering with a globally integrated supply-chain solutions company.

About CHEP

CHEP helps move more goods to more people, in more places than any other organisation on earth. Its pallets, crates and containers form the invisible backbone of the global supply chain and the world’s biggest brands trust CHEP to help them transport their goods more efficiently, sustainably and safely. As pioneers of the sharing economy, CHEP created one of the world's most sustainable logistics businesses through the share and reuse of its platforms under a model known as ‘pooling’. CHEP primarily serves the fast-moving consumer goods (e.g., dry food, grocery, and health and personal care), fresh produce, beverage, retail and general manufacturing industries. CHEP employs approximately 11,000 people and believes in the power of collective intelligence through diversity, inclusion and teamwork. CHEP owns approximately 300 million pallets, crates and containers through a network of more than 750 service centres, supporting more than 500,000 customer touch-points for global brands such as Procter & Gamble, Sysco and Nestlé. CHEP is part of the Brambles Group and operates in approximately 60 countries with its largest operations in North America and Western Europe. For more information on CHEP, visit www.chep.com.