It’s twelve months since CHEP entered the Baltic states of Estonia, Latvia and Lithuania. During this time, the equipment pooling specialist has made real progress establishing its operations and educating the market about the benefits its pooled equipment solution can deliver to manufacturers and retailers alike…
CHEP issues, collects, conditions and reissues more than 300 million pallets from a global network of service centres, helping retailers, manufacturers and growers of all sizes transport their products through their supply chain, in a cost effective, safe and environmentally sound way. Its reusable pallets have spread across the globe and are now distributed among more than 300,000 customers from the very smallest manufacturers who may only require a small number of pallets, right through to some of the world’s largest companies operating on a global scale.
Genuine alternative solution
As such, the CHEP solution is popular with organisations large and small operating across a diverse range of sectors including consumer goods, fresh produce, beverage and automotive. Simplicity is a key factor in this popularity – an organisation simply orders its pallets from CHEP, they load their goods on the pallets and ship them on to their customers. CHEP takes care of all pallet management issues leaving their customers to concentrate on fulfilling their orders. The other major benefit for customers using CHEP’s pallets is that they hire the pallets they require for the period they require them and only ever pay for what they use in line with their customer’s demand. So a manufacturer ships their products under load to the retailer locations. CHEP then collects the equipment, returns it for inspection, repairs it if necessary and then returns it back to the pool for it to be used again. And this cycle is repeated over and over again which means the resources are optimised. Kinga Di Salvo, Country Leader for CHEP’s Baltics operation summarises: “CHEP customers pay for the equipment they use, when they use it. It really is that simple.”
CHEP entered the Baltic region just over a year ago, and the level of interest its solution offering has received from local businesses has been very strong. Entry in to the Baltic region has ensured that CHEP pallets now provides an alternative solution to the inefficiencies of the white pallet exchange model that used to be the only option for manufacturers and retailers shipping goods on pallets. “Today, CHEP’s solution provides a quality platform delivered in a reliable, cost effective way”, explains Kinga. “We take care of the administrative aspects as well as the inventory control, allowing our customers to concentrate on their core business”, she adds.
Since its introduction to the Baltic region twelve months ago, both manufacturers and retailers have already started to appreciate the potential cost savings equipment pooling can deliver. CHEP has invested heavily in both the infrastructure and equipment in all three Baltic countries. Its service offer specialises in the two main wooden pallet types – the 1200x1000 platform primarily for export to the UK, and the 1200x800 Euro pallet. “We have a huge pool of these two equipment types available across the region which means availability is never an issue for customers, which is just one of the several benefits pooling delivers,” reasons Kinga.
A key aspect to equipment pooling is establishing co-operation with retailers who take delivery of the manufacturer's products. CHEP has already established co-operation with the Baltic region’s largest two retailers. Maxima and Rimi have already understood the benefits of pooling system in their supply chain - they return pallets to a single company instead of having to manage multiple pallet suppliers, thus reducing time-consuming paperwork and administrative activities. This also ensures that there are no disputes on pallet balances. CHEP can also arrange collection if they need to free up some yard space.
The development of such relationships with important domestic retailers means pallet acceptance is never an issue, and nor is collection and returns – a vital aspect of any successful pooling operation. This ensures CHEP is able to deliver high levels of customer service at a very affordable price.
There are more and more manufacturers in Baltic countries who enjoy the benefits of shipping their goods on standardised equipment which means no problems with acceptance at the retailer. Pooling simplifies control and management aspects resulting in less administration and reduced hassle, allowing them to concentrate on their core business. Higher quality pooled equipment reduces the risk of platform collapse or product damage, which can lead to spillage and contamination, and the possibility of having to re-palletise a consignment. All of which adds valuable time and cost to a delivery. “Co-operation with CHEP allows us improve our competitive edge by reducing expenditures on pallet management and logistics. We were investing a significant amount of money to buy our own pallets under the white wood exchange system to export our products, but getting pallets back was not cost-effective and the money we spent on pallets for foreign trade was basically lost.” - says Enrico Galli, Chief Executive Officer, Horizon Tissue, the largest tissue converter in Estonia.
“Now, with CHEP’s pallet pooling solution, we’re saving money on pallet management and maintenance. We only pay for the use of CHEP’s pallets for shipment, and CHEP then uses its extensive network to redeploy those pallets at the point of delivery. We are currently in the process of expanding our market share in Latvia, Lithuania and Finland, and we are planning to work with CHEP to support us in our growth plans. Our customers have welcomed this decision warmly.”
Supply chain partners
Another major development for CHEP in the Baltic region has been the establishment of a successful partnership with Baltic Logistics Solutions who has become CHEP’s preferred logistics service provider in the region carrying out deliveries and collections of its pallets to and from customer locations. Baltic Logistics Solutions also runs CHEP’s three Service Centre facilities located in Kaunas, Riga and Talin. In addition, CHEP has become a local member of ECR (Efficient Consumer Response) the joint trade and industry body working towards making the grocery sector as a whole more responsive to consumer demand and promote the removal of unnecessary costs from the supply chain. “As part of our membership, we delivered a joint presentation with Danone Waters at the annual ECR Conference last November, and we are hoping to deliver another joint presentation at this year’s event with another CHEP customer,” explains Kinga.
So it’s been a very satisfactory first year of operation for CHEP in the Baltics – the start of what threatens to be a long and successful relationship with the region’s manufacturers and retailers alike.
About CHEP
CHEP is the global leader in managed, returnable and reusable packaging solutions, serving many of the world’s largest companies in sectors such as consumer goods, fresh produce, beverage and automotive. CHEP’s service is environmentally sustainable and increases efficiency for customers while reducing operating risk and product damage. CHEP’s 7,000-plus employees and 285 million pallets and containers offer unbeatable coverage and exceptional value, supporting more than 500,000 customer touch-points in more than 50 countries. Our customer portfolio includes global companies and brands such as Procter & Gamble, Sysco, Kellogg's, Kraft, Nestlé, Ford and GM. CHEP is part of Brambles Limited. For further information, visit www.chep.com.
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