In the 1990's, foreign owned CHEP, in a calculated strategy to quickly penetrate the U.S. market, chose to forgo the expense, risk and time to install and implement any meaningful infrastructure for the collection and return of lost CHEP pallets. They chose instead to force this burden of collecting, sorting, storing and transporting onto existing pallet recycling companies across the United States. That's right, privately owned, family run independent pallet recycling companies are being forced to subsidize the collection of pallets for one of their largest competitors on a grand scale. And forced they are...as millions upon millions of lost/stray pallets are being injected onto unwilling distributors and recyclers by CHEP's leaky business model that was designed to quickly entrench it in the US market. In the absence of their own collection infrastructure they force feed their ARP program onto pallet recyclers through litigation, intimidation, and threats. (See Atlas Pallets). Their position with pallet recyclers who accumulate lost/stray pallets has been grossly one sided.... you must agree to participate in CHEP's ARP program, or face the wrath of CHEP's litigation.
WHAT SHOULD YOU DO NOW? YOU CAN HELP BY PROVIDING US FEEDBACK OF YOUR CHEP EXPERIENCES. CLICK HERE FOR FEEDBACK FORM.
CHEP PALLET- Orlando, Florida NPD 2007
Pallet recyclers, a mostly independent line of entrepreneurs have been the first to stand up to the unjusts being forced upon them by CHEP.
Recent disclosures by CHEP at the MOCK pallet trial indicate that millions upon millions of lost pallets are being returned to CHEP under this unfair program. CHEP has stated over and over that they will not alter their program of paying $1.25 for pallets picked up or $2.25 for pallet delivered within 200 miles. Obviously this program does not cover the cost of acquisition, transportation, sorting, storing and overhead not to mention a fair profit for your efforts.
A TURNING POINT FOR RECYCLERS.
Recent court room discoveries, judgments and settlements seem to have shed light on how unfair CHEP 's ARP program is. For example at the MOCK Pallet trial CHEP 's own people testified that CHEP could pay up to $7.75 and still be a benefit to CHEP. Other significant settlements and awards have been within pennies of paying recyclers $5.00 for the handling of CHEP pallets. $5.00 vs $1.25 or a $3.75 difference. With millions upon millions of pallets returned under the ARP program that means tens of millions of dollars are at stake for pallet recyclers.
After reading Clarence Leising article “Getting Paid What your Worth” it is obvious he has a good grasp of what has been forced onto recyclers by CHEP 's leaky rental program. I would like to add one very important and substantial market element he missed that demonstrates how far off we are from really getting paid what our recycler services are worth where CHEP 's ARP is concerned.
You should find it intriguing that we have evidence .. that CHEP knowingly allows its rental customers to ship pallets to distributors that they have no contract or agreement to recover their pallets. CHEP bills their customers NPD fees or lost pallets fees in excess of $20 and then force recyclers to do their job of recovering, transporting, sorting and storing the pallets for them at a dismal rate of $1.25-2.25 per pallet.
Bastrop, Louisiana
The recent judgments and settlements against/with CHEP are great but they still fall far short of the true value recyclers should be obtaining for these lost/stray pallets that we recover. If CHEP ends up having to pay recyclers only $5.00 for the return of lost pallet they would make out like a bandit. Consider what we know, and that is CHEP routinely bills its customers $24 for lost or unaccounted for pallets. They also bill their customers fees for knowingly shipping CHEP pallets outside of their network that we have seen range from $3.5 to $8. This is in addition to the standard transfer fees that CHEP collects!One is really shocked when you discover that CHEP prohibits its customers from seeking replacement blue pallets from recyclers. In a free, fair and open market (without the threat of CHEP litigation) one would reasonably expect to be able to return stray blue pallets to mutual customers at say, $10-15 per pallet, if it will avoid him at $24 lost pallet fee right?
Meridian, Mississippi
With pallet recyclers being saddled with the recovery of millions upon millions of CHEP 's pallets due to their leaky rental policies, you can bet CHEP 's profits will continue to be fat as long as independent pallet recyclers are forced to subsidize CHEP 's expansion into the U.S. market.
PLEASE HELP BY PROVIDING US FEEDBACK OF YOUR CHEP EXPERIENCES. CLICK HERE FOR FEEDBACK FORM.
Article on Getting Paid What Your Worth -10/2006
Pallet Enterprise Recycler Survey - 9/2006
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