Pallets; There has to be a better system

by Rene Tankersley
features editor

As independent owner-operators, Mark R. Taylor and his wife Renee operate their one truck and one trailer as a team. Leased to B&D Transport in Benton, AR, they share the driving responsibilities, Renee does the bookkeeping, and Mark does the maintenance. Together, they are raising their young son, Lee. Like many owner-operators, the Taylors are concerned with expenses.

Innovative pallet solutions from the outback

Australia has yielded an innovative solution to the pallet problem called CHEP, which stands for Commonwealth Handling Equipment Pool.

American soldiers introduced pallets into Australia in 1944 during World War II. When the Americans left Australia, they left behind the pallets, along with forklifts, cranes and other heavy equipment. To manage this equipment and its use, Australia's Commonwealth Government established the CHEP.

Brambles, a private business in Sydney, Australia, bought CHEP and its equipment in 1958. CHEP has grown into a worldwide business with industrial equipment and products on six continents in 31 countries, including the United States.

CHEP's pooling system exchanges pallets between customers. Customers pickup and dropoff their CHEP pallets at specific locations throughout the country. There is no money or pallets exchanged between drivers, shippers and receivers. Pallets are tracked, repaired and distributed by CHEP.

There are other companies out there that get involved in "pallet banking" or recycling pallets. One company is called Pallet Alliance, which has depots across the country in cooperation with pallet recyclers

"This is a small, family-owned business," Mark says. "Like most business owners, I am concerned with expenses."

One business expense that really aggravates Taylor is dealing with pallets and the never-ending swap game that comes with their use.

"I am curious how other owner-operators are handling a problem that is one of concern with me - pallet theft. Not from someone lurking in dark, truckstop parking lots, but shippers, receivers, brokers and lumper services," he explains. "Many companies have a pallet exchange policy or use cheap pallets. As this is a cost born by us, I try to make sure our pallets are exchanged evenly when loaded or unloaded. However, there are those out there who don't exactly work on a 'fair' exchange."

A case of bumbled billing

In April, Taylor had two incidents occur involving the same broker, Heartland Transport. He picked up a load of eggs from Hillendale Farms in Galt, IA, on April 15. When he accepted the load, he told the broker (Heartland Transport) that he had pallets. Two and a half months later, on his settlement slip from the carrier he's leased to, Mark was charged $132 for the pallets.

"The shipper kept my pallets and billed Heartland for the pallets. They passed the cost on to B&D, who in turn charged me $132 for the pallets," Taylor says. "I tried to get Heartland to return my $132, as Hillendale kept my pallets. The broker refused to return any funds, stating that since they got charged, they passed the cost on down."

On April 24, Taylor took another load, also brokered by Heartland, from Golden Plump in Arcadia, WI, going to Bird in Hand Poultry in Lancaster, PA. The shipper claimed that 15 of Taylor's pallets were "damaged" and charged him $77. The shipper kept the pallets.

"I found out about this charge after I got my settlement statement two and a half months later," Taylor explains. "The broker advised me that Golden Plump is 'particular' about pallets, and while they know it is a rip off, they cannot afford to supply these companies with pallets. They pass the cost on to the company I am leased to, who passes it on to me as the truck owner."

Taylor says if someone at the dock told him he would be charged for pallets, he could have contested or questioned the charge at that time.

"As it was, I did not find out until two and a half months later," says Taylor, "when the cost was passed down to me. I did not have the pallets, and Heartland had a total of $209 of my money."

According to Taylor, he spoke with Art at Heartland who stated that while he acknowledges Taylor got ripped off, they would not refund his money. "However, we did a good job for them," says Taylor, "and he said if I pull another load for them, he'd 'slip in an extra $50,' if I would remind him who I was."

These were the first two loads Taylor hauled for Heartland. "I had no idea I would be ripped off in this way," Mark recalls. "As Art said, it was a '$209 lesson.'"

Getting 'lumped' by lumpers

Taylor ran into another pallet problem June 14 at the Publix warehouse in Lakeland, FL, when he opted to unload his own truck instead of paying the lumper service. The worker checking Taylor out stated that seven of his 11 pallets could not be exchanged because the "edges on the slots for the forklift were not beveled." When asked to explain, the dock worker told Taylor he was being "punished" for not paying their lumper service.

"Instead, they would keep my perfectly good pallets under the pretense of the 'edges not beveled,'" Mark explains. "I left with four pallets. And the lumper service would sell my pallets to make up for my not hiring them."

No exchanges, lose $200

In May, at the Unilever plant in Raeford, SC, Taylor picked up a load going to Unilever in Jefferson City, MO. He arrived with 25 empty pallets on his truck, but was told that Unilever did not bother with the hassle of pallet exchange. When loaded, the extra pallets would have put the truck's weight over gross.

"They would not reduce their load to accommodate my pallets," Taylor says. "My only option was to leave my 25 pallets on their dock."

Taylor asked for a credit slip to have them replaced at Unilever in Missouri, but left with no credit slip and no compensation for the pallets left in South Carolina. When he arrived at Unilever in Jefferson City, MO, he was unloaded and no pallets exchanged.

"At $8 a pallet, I left $200 on their dock in South Carolina for them to sell, dispose of or whatever they did with them," Mark says. "Not to mention that I had to purchase pallets again for the next load."

Trading 2-for-1 not fair deal

Taylor also tells of his experience on June 14 at a Tyson plant in Monroe, NC. While the dock worker was unloading Taylor's pallets, he examined them. The dock worker said there were 15 in need of repair, but he told Mark they will keep those, repair them and give him "2 for 1 credit." There were two pallets made of pine. The dock worker said Tyson cannot ship chickens on pine, so he said they will keep them and not exchange them.

"I was told by the worker that those they keep, they sell," Taylor added. "I was not given credit for these two pallets, but Tyson received the money from selling them."

Whose responsibility is it anyway?

Taylor believes that along with loading and unloading, the shippers and receivers should be responsible for pallets, not the driver of the truck. Drivers have no storage space to keep pallets. If they did have racks to store them underneath the trailers, the weight would be the problem because they are regulated to 80,000 pounds gross vehicle weight. Many companies load the trucks as heavy as possible.

"Their freight is shipped on the pallets, and other than that, I have no use for them," Taylor says.

When companies don't exchange fairly with a driver, it gets quite expensive and takes money out of their pocket that could be used for his truck and, most importantly, for the driver's family. Taylor says these places seem to be taking advantage of the fact that the system has been in place for so long with little or no comment or question from the small trucking companies.

Taylor's solution is for shippers and receivers to make arrangements with each other regarding pallet storage and cost. He says brokers and dispatchers should have these details in hand before the load is dispatched, and the driver made aware of what exchange policy is in effect. Taylor suggests shippers and receivers use a Chep pallet program.

"It should not be up to the trucker to be burdened with the cost of pallets," Taylor says. "Like fuel prices and lumpers, this is a problem that affects our total profits and livelihood." 

Editor's note: Final words review results, frustrations

Before this issue of LL was packed off to the printer, writer Rene Tankersly talked with Mark Taylor again and he reported that as a result of his letter-writing campaign, Heartland returned $132 of the money they took from him.

He also reported that he stopped Sept. 5 at Chef America in Chatsworth, CA, with a load originated at Chef America in Mt. Sterling, KY. Taylor says he left 33 pallets in Mt. Sterling. He says he got six pallets back from Interstate Warehouse in Denver, CO, and no pallets back in Chatsworth. The broker with Rocky Mount claims that when they pay the bill to B&D, Taylor will get reimbursed.

"We shall see!" Taylor said. "It will probably take a month or more, but in the meantime I may still have to purchase pallets for my next load. There's got to be a better system."

Taylor said he was headed for United Wholesale Lumber in Visalia, CA, to buy more pallets.