Coming Into Focus: Losing Major Customers Forces CPC to Eye Year-End Shutdown
Canadian grocery pallet pool struggles after losing key customers and volumes, looks toward closing by end of year if other solution cannot be found.
Date Posted: 7/1/2013
After losing major Canadian retailer Loblaw among other clients, the Canadian Pallet Council (CPC), which has operated North America’s largest standardized industry pool since 1977, is considering a shut down by the end of the year. The organization has been hemorrhaging members for years and has struggled to keep pace with CHEP Canada. Cost concerns about repairing old pallets and other issues have hurt the organization and its pallet pool.
Belinda Junkin, president and chief executive officer of CPC, stated, “The organization has been struggling for some time, adjusting to decreased membership, new and significant impediments to the operation of the exchange program, diminished use of CPC pallets, and an overall reduction in revenue. This decline has become an acute concern as a result of Loblaw’s withdrawal from the exchange program. Few suppliers can now use CPC pallets for all, or even a substantial portion of their business. For some members, this has meant a complete conversion away from using CPC pallets. All indications are that this trend will continue. In light of these changes, the CPC has had to reduce expenses and operations, and we must now contemplate the closure of the organization.”
The CPC has sought other solutions and ways to serve existing members. But the organization’s board has not been able to find a way to keep the management structure afloat although the organization is looking for options amid cost cutting measures. Members recently met at an annual meeting to discuss the future of the organization and its pool. It is expected the organization will vote in September to shut down probably by the end of the year.
One possible option is for the existing CPC infrastructure to be reduced and wrapped up into the 9BLOC initiative or some other new coalition of industry participants. In the meantime, the CPC has cut its costs and reduced staff. The organization will also discontinue its CTSWEB software program and pallet exchange platform in the near future. This was the crucial software piece used to manage the pool and is very similar to the tracking program used by 9BLOC.
Junkin added, “The Loblaw decision to withdraw from the CPC has been a tipping point for our organization. CPC pallet use is down, and is expected to continue to decline as members move to a pallet option that is universally acceptable. The revenues from the current level of member participation do not support the costs of the organization.”
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