Western Pallet Magazine July 2022 | Page 21

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.