The wheels on the bus go round and round…
One of the hazards of being married to a first grade teacher is knowing two many nursery rhymes. The iGPS setback gives pause to wonder about how to make a large plastic pallet rental pool successful, including keeping those pallets going ’round and round’ instead of spinning out of orbit and into deep space. For iGPS, the wheels came off the bus. The loss of 1.5 million pallets triggered a default, according to court information, and set in motion events that eventually resulted in it filing Chapter 11. Clearly there were issues with pallet disappearance, as well as with respect to durability and warranty issues.
Now with new investors on board, iGPS says it is poised to maintain service levels:
iGPS will continue operating its business without interruption during the sale period, and its focus on high level of customer care will not be affected. The company, which is now stronger and better capitalized, will continue to honor and service its existing clients and new client programs and is committed to building a high-quality, sustainable pallet rental pool to service its future needs. iGPS Logistics and its principals have relationships and resources to expand iGPS’ product offering and customer base to service its customers’ growing needs for returnable packaging products.
Clearly, the market has shown that it really likes the idea of plastic pallets at wood pallet pricing, but iGPS hasn’t yet proven that its model works. Whether the issue has been failure of execution, or the model itself, is open to conjecture. Chaille Brindley at Pallet Profile Weekly (subscribe at www.palletprofile.com) offers several points to consider, including the thought that the model itself is a unsustainable, given its plastic pallets being offered at the same rental pricing as wood pallets that cost one-third as much.
Maybe iGPS is just too ambitious, and would have been better served by a more controlled entry, or more value-added applications such as pharmaceutical. PECO comes to mind as a pool that initially targeted private label goods so as to minimize retrieval lanes. And plastic pallets seem to be working well, as far as I know, in more controlled pools such as the Dutch beverage pool as well as the grocery pools in Sweden and Norway. Whether or not iGPS makes it in its second reincarnation is still open to conjecture, but plastic pallets will continue to find new pooling applications, albeit perhaps ones that are less complex for the time being.