CHEPs business tactics netted the foreign owned firm nearly three quarters of a billion dollars as reported in 2007!  If you  are a customer of  CHEP  or have rented, used, or received CHEP pallets and have been charged a "lost pallet fee" or fees for shipping to Non Participating Distributors please read on.  

CHEP has been involved in multiple suits with its own customers.  

     * " CHEP  has breached its implied obligation to act and perform its contractual             responsibilities in good faith by failing to disclose any standard or routine difficulties     that arise as to accountability of pallets used by CHEP 's manufacturers, or to disclose     and take precautions against or otherwise implement proper measures to insure that     lost or unaccounted for pallets could be accounted for."   Performance Foods affirmative      defenses,  Case of CHEP vs Performance Foods.  "See  CHEP VS  Its Customers Case List". 

    * CHEP sues Performance Foods for $333,856 for unaccounted for CHEP pallets.

     * Fleming Companies, Inc.  cannot account for 316,401 lost CHEP pallets.

CHEP  charges  lost pallet  fees estimated at $18-$24 to its customers when they cannot account for their inventory of CHEP pallets.  At the same time CHEP will not allow you to obtain these lost  CHEP pallets from recyclers to avoid this high cost.  

Lost and stray CHEP pallets often end up on pallet recyclers yards in the ordinary course of business.  CHEP does not allow recyclers to return these to the customers and forces the recycler to give the pallets back to CHEP  for a $1.25 handling fee. This is after they charge you the $18-$24 lost pallet fee.   



                                       CHEP PALLETS     FOLEY, ALABAMA 

There are many Fortune 500 names who may have been charged lost pallet fees. Companies like,  Proctor & Gamble, SYSCO, Kellog, Kraft, Nestle, Rockline, Ralcorp Holdings, Tyson, Schwan's Food, Schering-Plough, Gerber, Ford and GM are known to have shipped products on CHEP marked pallets.

" As Credit Suisse First Boston writes in a research report dated February 27, 2002
at page 14, "Leakage of the pool to NPDs"- in launching the Accelerated Volume
Program (AVP) in 1997, CHEP didn't appear to ensure that it had the necessary controls
and sales representatives to 1) prevent manufacturers from sending pallets to NPDs;
and/or 2) follow the pallets and product downstream and then signing up the NPDs. This
has resulted in an estimated 20% of the pallet pool being sent to NPDs, distributors who
have don't have a contract with CHEP, and hence comply with the care of the assets.
"Ramifications" - There are several ramifications including: i) reduced asset turns; ii)
increased damage rate ; iii) increase in lost pallets ; iv) greater collection and transport
costs; v) "Black Market" pallet pool ; vi) litigation; and vii) the dilution of value
incorporated in the Participating Distributor Agreement."
CHEP VS MOCK PALLETS DOC 23

PENN STATE RESEARCH REPORT ON RENTAL PALLET COSTS.

Your  input about CHEP activities are important. Contact us via the FEEDBACK FORM.



                CHEP PALLETS     BAGHDAD, IRAQ