PECO says it has sufficient capacity and stable operations following recent disclosures by Brambles regarding repair constraints and pallet quality challenges within parts of its U.S. network.
PECO Pallet, a leading U.S.-based pallet rental provider, has issued a customer communication emphasizing network stability and available pallet capacity following recent disclosures by Brambles regarding repair constraints and service disruptions within portions of the CHEP U.S. pallet network.
The statement comes days after Brambles lowered its FY26 guidance, citing approximately US$60 million in expected earnings impacts tied largely to rising repair costs, subcontractor turnover, labor shortages, and increasing pallet quality requirements associated with supply chain automation.
In a May 21 communication, PECO said it is operating normally and continues to maintain sufficient capacity to support customers across its North American pallet rental network.
“We recognize this may raise concerns, particularly given pallet supply chain disruptions experienced during COVID,” PECO stated in its customer message. “To be clear, this is not an industry-wide issue.”
The company positioned its operating model as intentionally focused on reliability, inventory positioning, and network control, particularly as automated handling systems place tighter demands on pallet consistency and quality.
PECO said its customers can expect “reliable supply and network stability,” along with “strong inventory positioning” and “operational resilience” designed to mitigate the types of constraints currently being discussed elsewhere in the market.
The announcement highlights how automation pressures are increasingly shaping operational priorities across the pallet pooling sector.
As automated storage and retrieval systems, robotic forklifts, conveyor systems, and vision-guided handling technologies become more common, pallet quality variation that may once have been tolerated can now create operational disruptions. Small dimensional inconsistencies, damaged components, protruding boards, or warped pallets can contribute to jams, sensor faults, and downtime in automated environments.
Brambles indicated in its recent disclosure that stricter repair standards and higher customer quality expectations had increased labor requirements across portions of its repair network. The company also acknowledged repair capacity constraints in regions including Texas and the northeastern United States.
PECO’s response appears aimed at reassuring existing customers while also positioning the company as operationally stable amid broader industry discussion about repair labor, pallet quality, and automation readiness.
The company said it may selectively assist in certain market situations where appropriate, although it emphasized that supporting outside demand would not affect service levels for existing customers.
The contrasting announcements from the two pallet poolers may further intensify industry discussion around several long-term trends already underway across the reusable packaging sector, including:
- Increased investment in automated pallet inspection and repair technologies
- Greater focus on automation-compatible pallet quality standards
- Pressure for tighter pallet specification consistency
- Expanded use of data-driven quality monitoring systems
- Ongoing evaluation of wood versus plastic pallets in highly automated applications
The developments also underscore the increasingly strategic role of pallet repair operations within modern supply chains. Historically viewed as a relatively low-profile function, pallet repair quality and network resilience are becoming more critical as automation reduces tolerance for variability.
PECO, headquartered in Itasca, Illinois, operates a pooled rental pallet network serving grocery and consumer goods manufacturers throughout the United States, Canada, and Mexico.
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Rick LeBlanc, EMBA, is the founder and editor of Reusable Packaging News (subscribe to the free newsletter) and editor of Western Pallet Magazine. A supply chain journalist with more than 30 years of experience, he specializes in pallets, reusable packaging, material handling and related operations. Rick is co-author of Pallets: A North American Perspective and Pallets & Progress: A Collected History of Pallets and Palletized Handling 1922–1945. He is also an advisory board member of the Virginia Tech Center for Packaging and Unit Load Design. Read Rick’s full bio.
