Club Standards

All three clubs generally have the same pallet specifications.  BJ's identifies seven aspects of a pallet that meet its specifications:  The pallet should be 95% hardwood, it should not have any lead boards broken past the first nail and all the  nails should be flush or countersunk.  The pallets should not have protruding nails on any sides, should not have any boards overhanging the stringers, should not have any odors, grease, dirt or oil on them and should not have boards that are too thick or too thin.

Pallet Supported Weight - Each pallet under 750 pounds must be capable of withstanding an additional 1,500 pounds of weight  on the bottom product layer without incurring any damage through the supply chain.  Each pallet over 751 pounds must be  capable of withstanding an additional 2,500 pounds of weight on the bottom product layer without incurring any damage through  the supply chain.

Height - Pallet height, including the pallet, must come close to, but not exceed 52 inches. This allows the club to maximize the  number of pallets on the outbound trucks. Also, the steel height under which the pallets sit at the clubs is 55 inches so pallets  coming close to being 52 inches high will easily slide under the steel for merchandising purposes.

Footprint - With the pallet footprint of 48 inches by 40 inches, product should not hang over the edge and it should fill a minimum  of 44 inches by 38 inches on the pallet.

Pallet Cap - The pallet must have a 4-inch pallet cap to protect the pallet from damage.   
Corner Posts - Corner posts must be used on each pallet corner to provide stability.  

Shrink Wrap - Shrink wrap of 0.79 gauge or greater must be used from the bottom of the pallet to the pallet cap. Manufacturers  should not shrink wrap on top of the pallet.

 Pallet Management - Manufacturers have three choices when deciding how best to manage their pallet supply when dealing with the  clubs.

 1. Include in Cost - Including pallets in the cost is the easiest scenario for manufacturers, but it is also the most expensive.   Manufacturers who follow this route buy new or used GMA pallets that meet the club specifications.  They would include the  cost of these pallets in the cost of goods and when the merchandise is delivered, the clubs keep the pallets.  

 2. Pallet Exchange - Pallet exchange might be the most cost effective scenario for manufacturers, but it is the most difficult to  manage.  When negotiating a club program, the manufacturer lets the buyer know that it wants to exchange pallets with the  receiving departments.  The buyer would notify the receiving departments to exchange an even number of pallets with the  manufacturer or its trucking company when the merchandise is delivered.  The quality of the pallets exchanged should be  equal.  The problems associated with this option include disagreements from either the club or the manufacturer about the  quality of the pallets received, keeping track of pallets and storing pallets.

 3. Pallet Leasing or Rental - One company, CHEP, dominates the pallet leasing market.  CHEP pallets are painted blue,  generally weigh 60 pounds and can support 2,800 pounds of merchandise.  As a specialist pooling operator, CHEP takes  responsibility for developing, purchasing and maintaining pallets, as well as providing control and management systems.   Pallets flow from CHEP's service centers throughout the supply chain and all shipments and receivings are tracked by the  company's computer system. A detailed listing of account activity is reported weekly to all customers.  CHEP pallets are  delivered to the manufacturer's production facility.  The merchandise along with the CHEP pallets is delivered to the clubs.   The clubs generally do not have any issues with the quality of the CHEP pallets.  When a sufficient supply of empty CHEP  pallets is accumulated in the club, CHEP picks them up or the club returns them to CHEP.  They return to CHEP for  inspection and repair and then are placed back into the system.