PECO Pallet, Inc. is one of North America’s biggest pallet rental services. They specialize in top-notch wood block pallets. Their focus is on the beverage, grocery, and consumer products sectors. PECO is known for its red pallets and quality. They have a wide network in the U.S., Canada, and Mexico. PECO provides sustainable pallet pooling solutions for major manufacturers and retailers. PECO rents pallets instead of selling them. This model supports a circular economy. Pallets are reused, maintained, and repaired to last longer. This approach offers customers cost-effective logistics solutions.
Company History and Evolution
PECO Pallet started in June 1997 in Cincinnati, Ohio. Eighteen pallet recyclers, manufacturers, and brokers formed the “Pallet Exchange Company,” or “PECO.” They founded the company to challenge a big foreign corporation. This corporation controlled the pallet pooling market. The founders saw the chance for a strong pallet pool. This pool could offer better quality and service to customers.
The company later changed its name to “PECO Pallet, Inc.” Its pallet pool also grew significantly after private equity investors invested money. In its early years, PECO mainly provided pallets to private label vendors. These vendors shipped to club stores. The top club store in the nation backed PECO early on. They wanted to keep healthy competition in the pallet industry.
In February 2011, PECO reached a big milestone. The Pritzker Group, a private investment firm run by J.B. and Tony Pritzker, acquired the company. This acquisition gave PECO a lot of equity capital. It will help them keep expanding in North America. J.B. Pritzker, Managing Partner at The Pritzker Group, said, “PECO Pallet has excellent customer service and simple logistics.” They are a perfect fit for us.”
In 2022, PECO marked its 25th anniversary. It began as a small startup. Now, it is North America’s second-largest rental pallet pool operator. At this milestone, the company helped about 700 corporate rental customers and 360 distributors. It had an inventory of nearly 22 million pallets.
Joe Dagnese became CEO of PECO Pallet in June 2016. This began a new time of innovation and growth in North America, especially in safety. Under his leadership, PECO has grown its presence in the pallet industry.
Business Operations and Network
Headquarters and Presence
PECO Pallet is based in Irvington, New York. Some sources now say Itasca, Illinois, is its headquarters. The company maintains an extensive North American service network that includes:
- 40+ full-service depots
- 50+ sort and storage facilities
- 2,100+ pallet recovery locations
- Management of over 60 million annual pallet issues across the U.S., Canada, and Mexico
PECO’s network offers full transportation coverage across North America. It serves thousands of shipping locations and helps with efficient pallet management.
Products and Quality Standards
PECO’s main product is their red wood block pallets. They are made to strict standards:
- Available in standard GMA (48”x40”) and half pallet (48”x20”) sizes
- Rated at 2,800 lbs. capacity
- Constructed from high-quality North American lumber that is responsibly forested
- Kiln-dried to control infestation, mold, and moisture content
- Free from chemical treatments or hazardous materials
- Regularly tested by independent third-party inspectors
Every pallet is inspected carefully each time it goes through PECO’s depots. Depot employees follow PECO’s Repair Specifications. This helps maintain quality standards across the network. Pallets are checked one by one. They are sorted, cleaned, and fixed if needed. Then, they are given back to customers.
In 2023, PECO launched Vision X. This system speeds up pallet inspection and repair. It also improves accuracy. Vision X inspects a full pallet and moves it to the right spot in just 6 seconds. In contrast, manual inspection takes much longer. The system now inspects with more than ten times the precision of human operators. This reduces the need for rework to fix missed defects or damages.
Leadership and Financial Performance
PECO Pallet is led by CEO Joe Dagnese, who was appointed in June 2016. The company’s executive team includes:
- Ken Chazotte (CIO)
- Mike Morris (CFO & Treasurer)
- Lisa Vegso (Chief Commercial Officer)
- Adrian Potgieter (VP, Sales)
- Roberto Sobrino (VP Business Development & Operations Finance)
- Mike Greene (SVP – Supply Chain, Network Design & Transportation)
- Eric Sobanski (SVP Operations)
- Denneen Ford (VP Human Resources)
- Tom Boehme (V.P. Operations)
PECO Pallet’s estimated annual revenue is $152.5 million. The company has around 400 employees. The company added 6% more employees last year. It now has an estimated revenue of $381,250 per employee.
Competitive Position and Business Strategy
PECO mainly competes with CHEP in the pallet rental industry. CHEP is an Australian company that leads the market. In 2010, PECO held roughly 8% of the market, while CHEP had 90%. PECO managed a pool of 5 million pallets, which was around 8% of CHEP’s pool size. PECO offers a quality choice with top-notch service. Over 98% of grocery stores, warehouse clubs, and discount retailers accept their pallets.
PECO’s competitive advantage stems from several factors:
- Quality and Service: PECO is known for high-quality pallets and great customer service. The company quickly picks up empty pallets to save warehouse space. They also work closely with depot partners to keep quality standards high.
- Cost Efficiency: A Poirier Group study found that companies using block pallets saved money. The five-week study at a Sobeys warehouse found total annual savings of $497,500. This includes $441,100 from transportation savings and $56,400 from improved operational efficiency. This provides PECO with compelling data to attract new customers.
- Alternative to Monopoly: PECO promotes itself as “an alternative to CHEP.” It gives customers a choice in a market once ruled by one player.
- Technological Innovation: PECO invests in systems like Vision X to boost quality. These systems enhance operations.
Sustainability Initiatives
PECO Pallet is dedicated to sustainability and caring for the environment. This commitment has brought the company many accolades:
In 2024, PECO earned a Bronze Medal from EcoVadis. EcoVadis is a top sustainability rating group. This ranked them in the 82nd percentile of assessed companies. It also shows a nearly 10% boost in their score from last year.
The company made it to Inbound Logistics magazine’s “Green 75” list in 2024. This marks their fourth year in a row receiving this honor. PECO was honored as a Green 75 Supply Chain Partner for nine years in a row, up to 2020, by the same publication.
PECO’s sustainability initiatives include:
- The company focuses on reusing and recycling pallets. This helps cut down on waste.
- Constructing pallets from responsibly forested timber
- Cycling pallets an average of four times a year
- Carefully maintaining pallets to prolong their useful life
- True four-way block pallets stack and move more easily than standard white wood stringer pallets. This efficiency cuts fuel costs and lowers emissions.
Joe Dagnese, President and CEO of PECO Pallet, expressed pride in their recognition. “PECO Pallet is honored to be seen as a leader in eco-friendly supply chain solutions.” By switching to PECO pooled pallets, companies cut waste and inefficiency. They also address safety issues with single-use pallets. This leads to improved efficiency and long-term savings.
Recent Developments and Future Outlook
PECO continues to innovate and expand its services across North America. Recent developments include:
- Carrier of the Year Awards: In 2024, PECO recognized four outstanding trucking companies for their great service at the annual Carrier of the Year awards. The honorees were Sabal Transport (Eastern U.S.), J.B. Hunt (Midwest U.S.), Western Pallet Supply and Logistics (Western U.S.), and Bison Transport (Canada).
- Technological Advancements: The Vision X automated inspection system is a big investment. It aims to boost operational efficiency and enhance quality control.
- PECO has shared customer success stories. One example is Blanca Potato. They stopped costly line shutdowns after using PECO’s high-quality pallets. These pallets improved their automated material handling.
- ESG Commitment: The company is weaving Environmental, Social, and Governance (ESG) principles into its work. This helps create a sustainable organization that focuses on people and the planet.
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