Pallet pooling is a logistics model where pallets are shared among multiple companies rather than purchased and owned individually. Instead of buying, using, and disposing of pallets, businesses rent them from a pooling provider who manages the entire lifecycle — manufacturing, distribution, collection, repair, and redistribution. It is a circular economy approach to pallet management that can reduce costs, waste, and complexity for the right businesses.
How Pallet Pooling Works
The basic pooling model is straightforward: a pooling company owns a large inventory of standardized pallets. They deliver clean, inspected pallets to manufacturers and shippers who load products onto them. The loaded pallets flow through the supply chain to retailers or end users. The pooling company then collects the empty pallets from downstream locations, inspects and repairs them, and redistributes them to the next user. This continuous loop keeps pallets in productive use and eliminates the need for individual businesses to manage pallet purchasing, storage, and disposal.
The Pooling Cycle
- Step 1: Pooling company delivers clean, graded pallets to the shipper
- Step 2: Shipper loads products onto pooled pallets and ships to customer
- Step 3: Customer receives goods and empties the pallets
- Step 4: Pooling company collects empty pallets from the customer location
- Step 5: Pallets are inspected, repaired if needed, and returned to the pool
- Step 6: Cycle repeats — same pallets serve multiple companies over their lifetime
Major Pallet Pooling Companies
Several large companies dominate the pallet pooling market, each with distinct characteristics and service models.
- CHEP: The largest pooling company globally, managing 350+ million pallets. Known for their distinctive blue pallets. Strong in grocery and consumer goods.
- PECO Pallet: Second largest in North America, managing 30+ million red pallets. Growing presence in grocery and beverage.
- iGPS: Offers plastic pooled pallets. Lighter weight and more hygienic than wood, but higher per-trip cost.
- Loscam: Major pooling provider in Asia-Pacific and Australia.
- LPR: European-focused pooling company with strong presence in food and beverage.
Advantages of Pallet Pooling
- No capital outlay — you rent pallets instead of buying them, converting a capital expense to an operating expense
- Consistent quality — pooled pallets are inspected and repaired between every use cycle
- Reduced pallet management overhead — no need to store, sort, repair, or dispose of pallets
- Sustainability benefits — pooled pallets have longer lifespans and higher recycling rates
- Simplified logistics — one provider handles pallet supply and collection across your network
- Reduced pallet loss — pooling companies track their assets and manage recovery actively
Disadvantages and Considerations
Pooling is not the right choice for every business. There are several important disadvantages and considerations to weigh before committing to a pooling program.
- Per-trip fees can exceed the cost of buying recycled pallets for businesses with simple supply chains
- Pallet deposit and transfer fees can be complex and difficult to track accurately
- Limited size options — pooling companies typically offer only standard sizes (48x40)
- Not suitable for one-way international shipping — pallets must be returned to the pool
- Long-term contracts may be required with early termination penalties
- Damaged pallet charges can be assessed if pallets are returned in poor condition
- Geographic coverage may be limited in rural areas far from collection points
Pooling vs. Buying Recycled: When to Choose Each
For businesses in the Wichita area, we generally recommend buying recycled pallets over pooling for most applications. Here is why: recycled pallets cost $3-7 each with no ongoing per-trip fees, no deposit tracking, no return logistics, and no long-term contracts. You own the pallets outright and can sell them back through our buyback program when you are done. For businesses with straightforward supply chains that do not span the entire country, buying recycled is typically simpler and more economical.
Pooling makes more sense for large national or international supply chains where pallet collection across many geographies would be logistically challenging, or for businesses that value the simplicity of having one provider manage all pallet logistics end-to-end.
The Future of Pallet Pooling
The pooling model is growing as supply chains become more complex and sustainability demands increase. Technology improvements — particularly IoT tracking and blockchain-based pallet accounting — are making pooling more efficient and transparent. We expect pooling to continue growing, particularly in large, complex supply chains, while the buy-and-recycle model remains dominant for regional and mid-size operations. Contact Pallet Wichita to discuss which model works best for your business.