Since most unitized goods move on pallets, the industry can have a big impact on reducing the environmental footprint of supply chains around the world. One of the biggest players on a global scale is Brambles Ltd. (CHEP’s parent company), which operates more than 360 million pallets, crates and containers across 60 countries—including the recognizable blue CHEP pallets we know in the United States. Serving some of the largest brands and running some of the most complex pallet management networks, Brambles and CHEP have a unique view of the complexity and challenges facing supply chain managers. Two top sustainability leaders from Brambles sat down with Pallet Enterprise to discuss their approach as well as ideas for the future. Dennis Raffa, formerly the senior manager of Zero Waste World for CHEP North America, and Jim Hartzfeld, Brambles’ head of sustainability for North America, share their thoughts on how to make the greenest pallet solutions on the planet. Dennis Raffa recently moved to a new role in the company as director of retail supply chain solutions.
Pallet Enterprise: CHEP’s Zero Waste World initiative seeks to eliminate waste in its processes as well as those of its partners. Please give examples of 2-3 wins for this program. Please provide specific examples of how the program has eliminated waste. How are those waste materials repurposed or recycled?
Dennis Raffa: Through CHEP’s Zero Waste World program, we facilitate introductions and collaborations between distributors, manufacturers and retailers to help address complex problems like food and packaging waste. This has produced incredible results, not only on CHEP’s path to regeneration, but also the sustainability journeys of those we collaborate with.
One example of recent success came from connecting retailers, who generate single-use plastic wrap waste, with a company that upcycles plastic waste into regenerative products. Zero Waste World served as a catalyst, helping identify and facilitate the partnership. This new way of upcycling plastic wrap is more sustainable than burning it for energy, and it directly reduces landfill waste by diverting it.
Pallet Enterprise: CHEP has moved from simply replanting trees it harvests to adding more to the environment (two trees for every one cut). How did CHEP achieve this goal? Is it requiring harvesters to replant more? Is it handling this process itself? I am just curious to see an example of how this works in North America.
Jim Hartzfeld: Our overarching ambition is to advance regenerative supply chains. Simply put, this means giving back more than we take from the planet because being sustainable is not enough. We can do better and actually create value, transforming our impact on the planet from neutral to positive. With 100s of millions of wood pallets cycling through supply chains around the world, climate and forestry are where we have the most significant environmental impact.
Realizing this, we transitioned our forestry ambition beyond zero deforestation to “Forest Positive” by 2025. This means increasing our pledge from helping grow one tree for every tree harvested to a new ambition: ensuring two trees are grown for every one we use. We’re also committed to continuing 100% sustainable sourcing of timber and aim to transform more forestry markets to achieve Timber Chain of Custody (CoC) certification.
After over a year of work, CHEP U.S. secured this certification in February 2023, joining Europe and South Africa in achieving this credential. This is a great opportunity to expand our access to certified timber in the U.S., bringing more of the nation’s relatively smaller private forest holders into the system and increasing the supply for all.
We’re working on several additional projects globally to build toward our 2025 aspirations. Brambles’ global procurement team increases collaboration between regions and accelerates efficiency projects to address challenges in one region with opportunities in another.
Our experience from the North American Sawmilling and Global Sustainable Forest Certification Program has provided unique insights into global forestry supply chains. Brambles has developed strong relationships with suppliers to ensure a competitive price in exchange for consistent and reliable demand for certified materials. In South Africa, for example, Brambles owns 18 timber farms and has invested in a vertical integration strategy to sustainably manage these lands according to the most credible global forestry certification standards. We continue to evaluate afforestation projects worldwide and partner with credible nonprofits to support forest land development and management.
On a local level, we seek to partner with customers and/or non-profits to plant trees in their local communities and encourage CHEP employees to use their annual volunteer allotment to participate in tree planting activities.
Pallet Enterprise: CHEP has moved to remanufacturing pallets in North America. Is CHEP remanu-facturing these pallets to original standards, or does CHEP have a remanufactured pallet standard?
Jim Hartzfeld: In CHEP-Brambles terminology, pallet remanufacturing describes more aggressive manual and automated repair techniques for damaged assets that would have been retired in the past. Simply put, we’re investing more effort and materials to return a previously unusable pallet to CHEP quality standards to leverage it again in our asset pool, keeping more platforms in the supply chain for manufacturers and retailers to use. Importantly, repair is an integrated part of CHEP’s pooling system and is sustainable by nature as it reuses and reclaims components.
Innovation is also core to CHEP’s model of continuous improvement, which, combined with historic and industry-wide price spikes and the scarcity of wood, led CHEP to find new ways to get the most value from every damaged asset. In the past year alone, CHEP has invested in technology in dozens of service centers to remanufacture 2.4 million pallets.
Additionally, investing in automation has helped increase our production capacity and efficiency. In the last five years, we’ve invested more than $200 million in automation advances that have improved our capacity to serve by over 20% year-over-year. This has allowed us to respond quickly to urgent requests for pallets without compromising on quality or safety, but it has not impacted employee attrition. In fact, over the past three fiscal years, we’ve experienced a 13% decrease in voluntary turnover among our CHEP U.S. plant employees, who want to stay because the arduous, tedious jobs are done by automation now.
While initially a response to wood scarcity, these new techniques will continue to deliver financial and environmental value into the future, helping us improve returns on investments in new pallets and expanding the effective capacity of our pools to better serve customers while reducing our environmental footprint.
Pallet Enterprise: CHEP has worked to collect more stray pallets in the USA. What aspect of this program has been the most successful? CHEP has created five new recycling processing centers in the USA, according to its recent Sustainability Report. How are these different from typical CHEP depots? What positive environmental impacts do they have?
Dennis Raffa and Jim Hartzfeld: Cooperation from all points in the supply chain helps mitigate pallet loss and keeps goods flowing to friends and families nationwide. For instance, partnerships with the recycling community increase the return rates of assets so they can be promptly inspected, repaired and reissued into the pool to keep the supply chain moving. To facilitate collaboration with such partners, we recently added five new, recycler-owned processing centers in the U.S. to the CHEP network. We integrated our Asset Recovery Program (ARP) into these existing locations to create additional nodes, curbing carbon emissions through more efficient routes. Continuing to grow recycler relationships, CHEP attracted the support of more than 50 new recyclers last year due to our ARP, where we offer compensation for the return of our pallets.
In conjunction with new processing centers, CHEP continually expands its low volume recovery (LVR) fleet, increasing the collection frequency from recyclers, retailers and non-contracted distributors who may not have full truckloads of pallets to return to CHEP.
All in all, we’ve increased collection points by 24% and pallet volume collections by 45% in 2022. This improvement in asset recovery keeps the supply chain operating efficiently, reduces lumber waste, cuts carbon emissions and saves trees.
Pallet Enterprise: Brambles has experience with both plastic and wood pallets and containers. I understand that CHEP has deployed a plastic pallet made from 100% recycled waste. Can you tell me more about this pilot project? The company has become materially agnostic overall. What are some examples where plastic works best vs. wood and vice versa?
Jim Hartzfeld: CHEP is an innovative company focused on adding value to the planet, businesses and communities through sustainable supply chain solutions – regardless of the material used. This means we evolve our offerings based on shifting, industry-wide needs. And, with any pallet decision, it’s important to balance the optimal material for the use case, associated costs (purchase and operations) and asset losses to determine the best option accordingly.
Wood is often the material of choice because it is safe, durable and renewable. It’s a reliable material for pallets and supports a regenerative supply chain with its repairable and recyclable nature, especially when sustainably managed and harvested. Globally, 100% of our global timber purchases are certified by the Forest Stewardship Council (FSC) or the Program for the Endorsement of Forest Certification (PEFC). This year, CHEP U.S. also achieved the Timber Chain of Custody certification.
One of our latest plastic solutions is made from 100% recycled plastic – the pooled Q+ platform –designed to help manufacturers and retailers with in-store promotional displays. Currently, this solution is in a pilot phase in North America, with a focus on Canada. Overall, early feedback is positive. This development, and others like it, are progressing toward our aspirational goal of 30% recycled content onfuture platforms by 2025.
Pallet Enterprise: CHEP works with customers to eliminate empty miles. Do you have a case study on this initiative that you can provide?
Dennis Raffa: Carbon emissions from the transportation sector are significant, so we consistently look for ways to eliminate empty transport miles and reduce environmental impact. Leveraging partnerships across the supply chain and data analytics, CHEP identifies potential inefficiencies and opportunities for increased sustainability operations.
For example, in working with JBS USA, a leading global food company most known for its beef, pork and poultry production, CHEP helped eliminate 880,000 empty truck miles in one year alone. This reduced more than 3.3 million pounds of CO2 emissions. To accomplish these results, CHEP and JBS evaluated the company’s transportation operation for 12 months, ultimately streamlining the network and reducing empty truck miles through innovative solutions. JBS operates more than 600 trucks that move refrigerated and non-refrigerated products throughout the United States, with freight terminals in Colorado, Wisconsin, Utah, Texas and Georgia.
Pallet Enterprise: How is Brambles using data to leverage relationships/networks and reduce waste?
Dennis Raffa: We all know technological advancements open the door to new opportunities and solutions across all industries globally, and supply chains are no exception. Using technology and data collection to better understand where CHEP platforms go and what happens to them can also unlock new efficiencies for retailers and manufacturers.
CHEP continues to explore and test these types of data-driven solutions to increase asset efficiency and productivity, anticipate supply and demand fluctuations, improve forecasting and planning, and reduce waste across supply networks globally. By knowing where assets are in the supply chain, we can recover them faster, reduce losses and misuse, have more informed conversations with partners, and more quickly get pallets back into the circular economy. These insights will power smarter, more sustainable supply chains, benefiting the overall system, businesses, and the planet. Rather than for direct environmental reporting, these technologies drive our network’s overall efficiencies, which are directly related to reductions in environmental impact.
Pallet Enterprise: What is Brambles doing to educate customers and the general industry on environmental challenges? How is it leading the way to better conversations and collaboration?
Dennis Raffa: Collaboration is in our DNA. We work closely with manufacturers, retailers, third-party partners and communities to educate each other on supply chain challenges and solve these problems together. This working philosophy drives how we do business, so we go beyond product offerings to truly partner with customers, sharing advice and solutions based on expert industry and sustainability knowledge.
At the center of our collaborative efforts is CHEP’s Zero Waste World program, which brings together leading manufacturers and retailers to help eliminate empty transport miles, reduce material waste and other inefficiencies in the supply chain. The program aims to deliver zero-waste innovation through free-of-charge ideation, problem-solving and research sessions. Through customer-led innovation, ideas for new products and packaging designs are often tested at CHEP’s ISTA-certified Innovation Center through real supply chain simulations to refine and develop solutions. Zero Waste World also hosts semi-annual summits with industry leaders to collectively discuss the latest learnings in sustain-ability with participating audiences.
Editor’s Note: For more information on CHEP’s sustainability initiatives, please visit https://www.brambles.com/sustainability or https://www.chep.com/us/en/sustainability.
