BJ'S WHOLESALE CLUB WADES DEEPER INTO THE PALLET POOL

PATRICK SCIACCA

NATICK, Mass. -- After almost two years of pallet pooling with only one trading partner, BJ's Wholesale Club here has expanded its use of pallet pooling to include 21 partners, and it expects the growth to continue.

The expansion means that approximately 25% of the 2.5 million pallets used at BJ's 94 stores and two distribution centers annually will come from third-party pallet suppliers, according to Ray Sareeram, senior vice president of logistics for BJ's.

BJ's is hoping for a "sizable savings" through third-party pallet pooling, he said. With other pallet-management methods, such as pallet exchanges, "it's labor intensive to return pallets to several partners."

Prior to the new agreement, BJ's only pallet-pooling partner had been Procter & Gamble, Cincinnati. With this pallet-pooling expansion, however, the volume of third-party pallets will rise to almost 500,000 annually, according to Sareeram.

BJ's plans further pallet-pooling growth, and the retailer could see as many as one million third-party pallets cross its dock annually, according to a source familiar with the situation.

The agreement to increase the use of the pallets from Chep, Orlando, Fla., was reached after a successful trial run with four vendors: Procter & Gamble; Welch's, Concord, Mass.; General Mills, Minneapolis; and Kellogg Co., Battle Creek, Mich. The trial ran from March 1998 through June, the source said, adding that these vendors continued shipping on third-party pallets after the trial was completed.