1900 Recyclers participate in CHEP'S Asset Recovery Program
The number of pallet recycling companies in the US is estimated at 4,000CHEPs parent company Brambles 2006 Annual Report list sales of $3,522,000,000 with profits of $771,000,000 for a net operating margin of 22%.
46% of Brambles sales are from US operations.
CHEP accounts for 88% of Brambles operating profits.
CHEP'S ARP pays recyclers $1.25 for pallet picked up on the recyclers yard or $2.25 plus a fuel surcharge for pallets delivered up to 200 miles.
CHEP claims it ARP program is not negotiable.
CHEP loses 5.6% of its 220,000,000 pallets it issues a year or 12,320,000 pallets.
The federal judge in the Mock Pallet trail has ruled that $5. is a fair price for returning CHEP pallets.
BRAMBLES is the Australian based parent of CHEP USA. It operates in 45 countries around the world today.
CHEP is an acronym for Commonwealth Handling Equipment Pool.
CHEP first moved overseas in 1975 to the UK and Europe followed.
CHEP expanded to the US in 1990.
Brambles is Traded on the Australian and London stock exchanges.
CHEP's customer agreements prohibits the customer from replacing lost/unaccounted for pallets from any source other than CHEP.
CHEP USA is a general partnership organized under the laws of New York with its principle place of business in Orlando, FL. Buckeye document
In 2004 there were over two billion wood pallets in use within the US.
CHEP's agreements with its customers generally charge three basic fees: 1. Issue fee, 2. Rental fee, 3. Transfer fee. The issue fee is billed when the pallets are shipped to the customer. The rental fee is a daily charged while the blue pallets are at the customers location. The transfer fee is billed when the customer ships the pallets loaded with goods to its distributors.
CHEP made a business decision in late 1998 to allow some of its customers to ship its CHEP pallets to any distributor regardless of whether or not CHEP had a contract with the receiving distributor(Non Participating Distributor). This decision was intended to increase CHEP's business. CHEP salesman refer to this as the 100% solution.
In addition to CHEP's customary fees, CHEP charges participating customers an additional charge, which CHEP calls an up charge, for each blue pallet that the customer ships to non participating distributors.
The amount of up-charge depends on whether the non-participating distributor is catagorized by CHEP as “SEMIC” (semi-cooperative) or “NOTXX” (uncooperative) based on the willingness of the distributor to return the pallets.
If the NPD is determined to be semi-cooperative, CHEP generally charges the manufacturer an up-charge of $3.50 per pallet for pallet shipped to such distributors.
If the NPD is determined to be uncooperative, CHEP generally charges the manufacturer an up-charge of $8.00 per pallet for shipping to such distributors.
John McDonald and Bridgett Roman of Schottenstein, Zox and Dunn represented CHEP USA in the Buckeye Lawsuit