A Guide to Pallet Pooling for Mid-Size Businesses

Pallet pooling is a system where a third-party provider owns and manages a shared pool of pallets. Instead of buying pallets, businesses rent them — paying a per-trip or per-cycle fee. The provider handles delivery, collection, repair, and replacement. It's like a pallet-as-a-service model.

The major pooling companies — CHEP (blue pallets), PECO (red pallets), and iGPS (plastic) — serve many of the largest CPG companies, retailers, and distributors. If you've been inside a grocery store warehouse, you've seen their distinctive colored pallets.

The appeal of pooling is simplicity. You don't own pallets, you don't repair pallets, and you don't manage pallet inventory. The pooling company delivers clean, uniform pallets when you need them and picks them up from your customers after use. For businesses that want to outsource pallet management entirely, it's attractive.

However, pooling comes with costs that aren't always obvious. The per-trip fee (typically $4-8 per trip) adds up quickly with high volumes. There are also "issue" and "transfer" fees when pallets move between participants. And if pallets are lost or damaged, the renter is typically liable for replacement costs, which can be $25 or more per pallet.

For mid-size businesses, pooling makes the most sense in two scenarios. First, if you're shipping into retail supply chains that require a specific pooling platform (some retailers mandate CHEP or PECO for their DCs). Second, if you want to completely eliminate pallet management from your operations and are willing to pay a premium for that convenience.

For most mid-size businesses, a hybrid approach works better. Use pooled pallets for retail channels that require them, and use purchased recycled pallets for everything else. This keeps costs down while meeting retailer requirements.

At Bakersfield Pallet Co., we're not a pooling company — we're a supply and recycling company. But we understand pooling well, and we help our clients navigate the decision. If you're evaluating whether pooling is right for your business, we can provide a cost comparison based on your actual volumes and shipping patterns.