The Western Pallet Association is pleased to welcome the following new members.
JUNE 2022
Brambles Chooses Not to Participate in Plastic Pallet Transition for Costco’s US Supply Chain
In late June, Brambles announced that it would not participate in a plastic pallet conversion for Costco, after extensive trials and analysis spanning the last three years.
In response to the announcement, NWPCA released the following:
Millions of businesses constantly evaluate a number of factors in making decisions about pallets. After an extensive evaluation, Brambles announced its decision to not participate in Costco’s potential transition to plastic pallets. Today, more than 90% of goods move on wooden pallets because they best meet the needs of businesses and consumers. It’s clear wooden pallets remain the best environmental and economic choice.
(Click here to read the complete statement.)
Key Highlights of the Brambles Decision
Brambles summarized its position as follows:
- The decision not to proceed
demonstrates its disciplined
approach to capital allocation and
has been informed by extensive trials
over the past three years.
- In the current market environment,
the price premium and commercial
terms required to offset higher total
cost-to-serve and deliver an
appropriate return for Brambles’
shareholders were prohibitive for
Costco and its suppliers. The higher
cost-to-serve includes a 50%
increase in the capital cost of a
plastic pallet since September 2021.
- Brambles continues to have a strong
relationship with Costco and its
suppliers and is committed to
supporting them through any
potential transition.
- If a transition does occur
independent of Brambles, it will
likely be phased over multiple years
and Brambles would seek to offset
any associated financial and
operational impacts through new
business wins and initiatives. Any
wooden pallets released from the
Costco system during a transition
would be redeployed to new and
existing customers, resulting in lower
capital expenditure.