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PECO’s Modest Return Proposal

Joe Dagnese, chief executive officer of PECO Pallet, would like to have a word with you. Not to put a too fine a point on it, he would like you and your customers to return his pallets more quickly.

He understands the pressures customers are under that were brought by a myriad of events you have no control over. like the Covid 19 pandemic and worldwide disruptions of the supply chain, which have made it more desirable to hold onto freight and maintain safety stocks, especially when you don’t know when the next shipment will arrive – or if it will..

“Rental pallet pool operators are constantly seeking balance — between what goes out of the pool to the user, and when those pallets are recovered and returned, and can then be reissued,” Dagnese said in a recent commentary in Material Handling & Logistics magazine (which your editor writes for).

Every business wants to maximize inventory turns and maintain the optimal level of safety stock to meet consumer demand, he said. “Pallet assets – and how they are deployed – must be completely aligned with and in support of those objectives”

Pallet rental programs – balancing cost, asset availability and the flexibility and agility of national pallet networks – can deliver consistent and sustainable resources and services shippers need. But, he says, they only succeed when all players in the pallet use cycle live up to their end of the deal.

If someone hangs on to a pallet too long, it disturbs the cycle. Balance in the system and the impact on supply chain efficiency depend on participants living up to their commitments,” Dagnese argues.

“All parties must be fully invested in maintaining sufficient pallet supply and keeping costs manageable. The consequences of not going so cause ripples throughout the supply chain that ultimately end up in higher costs of goods sold.”

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