20 WESTERN PALLET
Brambles’ Costco $700 Million Plastic Pallet Decision
In the wake of Costco’s plastic pallet announcement in September 2019 and the CHEP plastic pallet trials that have followed, the pooler has been guarded in discussing them publicly. That has been the case, at least, until its September 14, 2021 investor presentation.
Currently, iGPS is the only approved pooler to commercially offer plastic pallets to Costco suppliers in North America.
A lot on the line
To be sure, there is a lot on the line. Costco accounts for around 10% of CHEP North America’s volume. And as Laura Nador, President CHEP North America, pointed out at the briefing, the two companies have enjoyed a mutually successful 20-year relationship. She noted that Costco’s growth has consistently outpaced other big-box providers and has been a “key driver of new business wins” for CHEP.
The plastic pallet initiative also has been a keen topic of interest to investors regarding how such a move would impact the CHEP business. Costco has a reputation as an innovator when it comes to pallets, and perhaps it is a lead indicator of a more broad future trend. After all, it was an early trendsetter in transitioning from pallet exchange to rental, and then from stringer pallets to block style units.
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