A major legal and business battle between Northwest Pallet and PECO Pallets continues to suffer delay after delay. Jim Riff of Northwest Pallet claims that PECO is trying all sorts of stall tactics to delay the proceedings. And in a strange twist, Northwest Pallet has been inviting PECO to retrieve its red pallets for at least two months, but the rental company refuses unless the recycler handles the loading process, according to Riff.
Currently, Northwest has more than 20,000 PECO-marked pallets at its facility. Riff explained, “We keep on telling PECO if you want your pallets come and get them. We want PECO to handle its own loading and trucking. But they refuse to come get their assets unless we load them as well.”
The two companies have filed lawsuits against each other over fair compensation for return, handling and logistics fees involved with PECO-marked pallets. PECO has unilaterally altered what it is offering Northwest Pallet and other companies claiming that it will no longer pay full asset recovery rates for non-stray pallets. In 2015, PECO altered what it offered those companies, decreasing it from $1.25 to 35 cents. Since the lawsuits were filed last year, Northwest Pallet claims it has not been paid at all for any return services it has done. Riff added that PECO now owes it more than $2 million in fees. And the meter keeps on ticking.
The lawsuit could set a major precedent for return fees and requirements involving PECO, and it could impact how other pallet rental providers are viewed by the industry as well. At this point, both CHEP and iGPS have kept their asset recovery programs as they have been while PECO is altering it for some companies claiming those pallets are in-network and not strays.
Both lawsuits are in the discovery phase now, and Riff expects that the cases will go to trial in February 2017. Since neither side has been able to reach an agreement, PECO pallets are stacking up. As a result, Northwest Pallet has been forced to move them to other facilities to prevent clogging up its main facility. This process has required double handling. Northwest has responded by beginning to charge PECO a $1 storage fee per week per pallet. Some other companies are doing the same thing by charging for storage. It remains to be seen if those fees will ever be paid.
By allowing PECO to pick up its assets, Northwest has put the rental company in a position where it will be hard to argue that Northwest kept PECO from renting its assets. If those pallets are truly valuable, PECO should be willing to come get them, suggested Riff.
A PECO spokesperson stated, “We flatly reject the many mischaracterizations of this matter that Northwest Pallet has provided. The ongoing litigation will bear out the facts and we look forward to resolving this matter.”
