Mass Retail Industry February 25, 2011
Block Pallets (four way entry) vs. Stringer Pallets (two way entry)
Effective January 1st 2011, Costco Canada announced that they will accept PECO, CHEP, and iGPS, as opposed to the three stringer, two way entry GMA stringer pallets that are currently predominant in the pallet market. Costco Canada is in the process of ultimately phasing out the three stringer, two way GMA pallets out. This change came about in an effort to meet and/or exceed structural and performance standards. This is a policy change that also affects U.S and Mexican operations. How does this change impact our Canadian Customers?
Ultimately, Canadian Customers have relied heavily on procuring the 40 x 48, three stringer GMA, two way pallet through independent pallet suppliers, but now they will have to procure the Block pallet from specified internationally recognized suppliers. The Block pallet is currently widely accepted and manufactured in Europe and abroad although China and other Asian countries are not as 'palletized' as North America. CHEP, the largest pallet international pallet supplier, is also on board with supplying block pallets. If a customer ships to Costco on a non-approved Block pallet, they could face fees up to $50 to re-palletize the products onto Block pallets and charge an additional $50 per hour for labor costs incurred in the process. Depending on the number of pallets or the size of the shipment, fines can add up very quickly.
Essentially, the Block pallets will allow flexibility and the ease of handling efficiencies, true four way access, perceived strength and durability benefits and other advantages. There are exceptions for some countries where they cannot access PECO, CHEP, and iGPS, suppliers. Costco has been trying to make the change to Block pallets for many years and are excited at the prospect of having their Distribution Centres become more efficient overall.
The types of pallets that Costco will currently accept are CHEP, PECO and iGPS. Please do not hesitate to contact me to discuss these shipping requirements if you are a potential customer that is shipping to Costco Canada.