Pallet Control CHEP/LOSCAM – First Fleet Express letter to customers

January 20, 2011 Edward

Pallets are an enormous cost within any business, particularly within the transport industry. First Fleet’s exposure to pallet losses is close to $1.2 M and these levels simply cannot be permitted to continue.

Volumes are increasing, particularly into regional areas and this shifting in delivery locations is raising major issues with pallet control. Many retailers either do not have or are closing their pallet accounts increasing the exposure to carriers. We need to put firm administrative management in place to ensure this major cost is controlled.. The intent is to limit our liability when it comes to pallets being transferred in a manner that causes us to lose track of the pallet and, potentially, bear the cost of that pallet which can simply be described as “lost”.

There are four options open to a carrier for the correct management of pallets.

Firstly, and ideally, the sender transfers the pallets directly to the receivers account. The arrangement is agreed between the sender and the receiver and the carrier is the conduit to deliver the product, on pallets, as contracted.

Secondly, the pallets being sent are transferred to the carriers account and the carrier then, on delivery, transfers the pallets to the receivers pallet account. These transfers invariably involve a “delay” usually 30 days.

Thirdly, the pallets being sent are transferred to the carrier’s account and, on delivery, the receiver exchanges the delivered pallets. The carrier then takes on the responsibility of dehiring those pallets off their account at the carrier’s expense. Where a receiver does not have pallets on hand to exchange, an IOU is often issued. While this option seems effective, the reality is that the IOU is rarely filled.

Finally, products are presented and delivered on “plain pallets” which require no specific administrative management and is the preferred option for carriers.

We are increasingly experiencing issues where the point of delivery either a) does not have a pallet account or b) does not have pallets to exchange. This is where the issue is developing and we need to stop this operational anomaly from becoming an uncontrollable and unacceptable cost to this business.

Where pallets are transferred to First Fleet’s pallet account at the point of pick up and on delivery it is found that a receiver does not A) have a pallet account or B) has no pallets to exchange, First Fleet will agree to hand unload the pallets at the receivers premises and a charge will be raised back to the sender for this hand unload.

If this is not acceptable to the receiver, our driver will be instructed to return to the depot with the goods that were to be delivered. The sender will then be contacted and advised of the non-delivery and the reasons for the non-delivery. First Fleet will then await advice as to what course of action the sender requires us to undertake to complete the delivery. Re-delivery fees will apply in these circumstances.

This issue is a real growing concern within the transport industry and we need to gain back the control of this operational anomaly to minimise our financial exposure.

Should you have any queries, please call me.

Yours Sincerely,

Stephen Brown

Managing Director