In the world of logistics and warehousing, pallets are indispensable. Whether you’re shipping products from Sydney to Darwin or distributing to major retailers like Coles, Woolworths, or Kmart, the choice between CHEP and Loscam pallets is likely a conversation you’ve had. With customers increasingly asking sellers to ship goods on specific pallets, it’s essential to understand how both pallet providers work, their costs, and what makes them different.
Pallet Pooling Dominates the Industry
In Australia, CHEP and Loscam dominate the pallet pooling market. For those new to the concept, pallet pooling means renting or hiring pallets, rather than owning them outright. This allows companies to manage their supply chain more efficiently by hiring pallets based on need, reducing the hassle of storage and repair.
CHEP, with its iconic blue pallets, is known globally, operating in 45 countries across six continents. Loscam, on the other hand, is particularly strong in Australia and the Asia-Pacific region, known for its red or yellow pallets. Both companies have their origins in the 1940s and have since grown into the leaders of the pallet rental industry.
The Methods Behind CHEP and Loscam
Both CHEP and Loscam operate on the same fundamental model: they pool pallets to ensure they are reused across supply chains, promoting sustainability and cost efficiency. The benefits of pallet pooling include:
- Reduced cost of ownership, as you only pay for the time pallets are in use.
- Less waste, since the pallets are returned, inspected, and reused.
- Improved efficiency, with standardised pallets across your supply chain.
- Consistency in quality—especially important when dealing with heavy loads or fragile goods.
However, despite the similarities, there are crucial differences between the two companies, particularly in the materials used for their pallets and their associated costs.
How Much Do CHEP and Loscam Pallets Cost?
The cost of hiring pallets can vary based on several factors, including the number of pallets hired, the duration of the rental, and the volume being shipped. However, it’s helpful to look at the base rates to understand how they compare.
- CHEP: Daily hire rates start from $0.199, but this can be lower depending on volume. If you lose a pallet, the compensation cost is $55.
- Loscam: Daily hire rates start from $0.20, with the pallet compensation cost at $39.99.
These costs may not seem like much on a per-pallet basis, but when you’re dealing with thousands of pallets in large-scale operations, they quickly add up. It’s essential to stay on top of pallet management, whether you’re dealing with purchase orders or using a Vendor Onboarding Template.
Account Management: The Key to Avoiding Hidden Costs
Pallet pooling may be a cost-effective solution, but poor management can lead to significant fees. In 2010, Bunnings was ordered by the NSW Supreme Court to pay CHEP $10.98 million for failing to return nearly 65,000 pallets between 2002 and 2007 . This highlights the importance of effective pallet management, which can be ensured through proper oversight or by outsourcing to third-party pallet control managers. Pallet pooling systems, like those from CHEP and Loscam, work best when pallets are returned on time, inspected, and reused.
Pallets and the Future of Sustainable Supply Chains
Both CHEP and Loscam promote sustainability, with reusable pallets playing a pivotal role in reducing the environmental impact of supply chains. By ensuring that pallets are reused and recycled, companies can significantly cut down on waste and reduce the carbon footprint of their operations. For instance, Loscam’s new-generation radiata pine pallets are entirely sourced from sustainable pine forests, with trees maturing in just 25 years, compared to the 75 years it takes for hardwood alternatives.
Similarly, CHEP’s Wooden Pallet is designed for durability and can be used in a continuous loop, reducing the need for single-use pallets that end up in landfills.
The Bottom Line
Choosing between CHEP and Loscam ultimately comes down to your specific needs—whether it’s the type of products you’re shipping, your focus on sustainability, or the logistics of managing your pallet pool. Both companies offer competitive rates and have made strides in improving sustainability in supply chains.
But with pallet shortages looming and potential hidden costs, it’s essential for businesses to manage their pallet use effectively. SupplyScope can help with that, ensuring that from the moment you find a manufacturer to the time your product hits the shelves, your supply chain is optimised and compliant.
By integrating tools like a Product Developer Software or a Retail Compliance Software, businesses can streamline their operations, reduce the risk of pallet mismanagement, and focus on what really matters—delivering high-quality products to customers, on time and on budget.
