Letter from Ed - The San Antonio Incident
Description of recycler meeting to discuss future of industry and pallet ownership.
By Dr. Ed Brindley
Date Posted: 7/1/1999
By now, quite a few pallet people have heard the story of Edgar Lozano, Atlas Pallet, San Antonio, Texas. The story contains elements of some of the more exciting secular news stories. More importantly, it cuts deeply to the issue of pallet ownership that has been heavily discussed in our industry this past year.
While this story is about one recycler’s struggle with the Chep blue pallets that end up on his yard, the sensational elements of the story are really more about the San Antonio Police and their alleged abuse of power. However, the element of pallet ownership continues to underscore both this story and some of the more interesting discussions being held in the industry.
This year, several states have either considered or passed legislation strengthening ownership claims of proprietary pallets. Since Chep is the largest pallet owner and renter, it naturally gets pulled into these discussions.
Chep and some other companies contend that they own proprietary pallets no matter where they are located. The idea that proprietary or rental pallets may be viewed as stolen property if they wind up on a pallet recycling yard (as was the case in San Antonio) has stirred opposition within the recycling industry.
At the NWPCA Recycling Convention in Memphis this May, the lead-off session featured this issue. Don Black of Pallet Services has been a leader in the growing resistance within the pallet industry to unreasonable restraints on the recycling business. Don and Sam McAdow of Buckeye Wood Products, both lawyers, gave a legal analysis of the recent state legislative efforts.
Don and Sam’s presentation was followed in the afternoon by a pallet ownership roundtable where Edgar told his story. This was the first public airing of his experience to the pallet industry. He described how he had been charged twice with stealing pallets from Chep; neither case resulted in a conviction. Edgar is suing Chep in response.
Another special meeting had been planned in Memphis to further discuss the issues covered in the NWPCA’s roundtable session. Over 50 people attended this special meeting that was not part of the official NWPCA program. After the meeting, a steering committee discussed pallet recyclers’ options. While people left Memphis without resolving the problem of pallet ownership, and more specifically reimbursement for expenses incurred for handling stray Chep pallets, at least some concerned pallet people are working together to examine recyclers’ options.
This San Antonio case could have important implications for Chep. The results could impact how Chep does business in North America.
Last December at the Orlando NWPCA Recycling Convention, a spokesman for Chep publically said that it is now willing to negotiate with individual recyclers concerning the costs connected with handling stray Chep pallets.
At an April meeting, Mike Dimond, president of Chep Canada Inc., agreed to work with Canadian companies and pay a retrieval fee for stray Chep pallets. The parties will negotiate this fee in each case. CWPCA president Ross Beverley and Mike Dimond agreed on a format for notifying Chep Canada about such pallets. A special form and 800 number have been designed to facilitate this relatively simple solution to a complex problem.
Edgar indicates he has set up a web site (www.palletlaw.com) for those who want to discuss problems and solutions related to pallet ownership. I have to doubt that a simple solution that is acceptable to both recyclers and pallet users is going to suddenly appear. This problem is probably going to require the sincere cooperation of people on both sides of the aisle. Expect us to carry more on this important issue in future issues of the Enterprise.
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