CHEP is on listening duty says EMEA President

He also talks about a range of pallet concepts a consortium led by CHEP is developing.

How is CHEP evolving?

CHEP is undergoing a lot of renewal.

We relied for a long time on a single business model - the one way trip. It was successful for the company, and as a result we became inflexible and did not always listen to customers.

That whole culture has been changing a lot.

We are focused on an outside-in orientation. You could rightfully accuse CHEP in the past of being more inside out.We would tell customers what we thought they needed. That's really turned around now to a very active programme to understand customer need.We've been getting closer to logistics suppliers, retailers and industry bodies, gaining insight, and that has helped us to broaden our services to complement one way trip.

When I joined, I found the complexity we imposed on our customers shocking. Over time some processes became overly complex, for example, our contract used to be 28 pages long. Now it's five pages.

Also, the customer has tended to need to do a lot of reconciliation of transactions and movements of equipment. Now we have stepped up, and created a unit to do that for them in many cases. Our customers want a partner that will make it simple for them. In the past, although we provided the pallet, we made them think a lot about it.

What can we expect in terms of product development?

We're engaged in an initiative on the last mile. People are not interested in putting the product on pallets, so what in-store solutions are needed? There is a huge amount of diversification of equipment there and that makes it complex and costly.We've facilitated a project with about 30 different companies, bringing together a few standards that could facilitate different industries.We are now focusing on five product ideas.

It was launched project at beginning of year, we carried out 40 workshops with retailers, logistics providers and manufacturers and put all the learning together for two full day sessions. Out of this emerged 42 solutions, which we've brought down to five, which are now in the concept development phase.

One is creating a wheel based solution for smaller platforms.We're doing a test right now in Austria and Switzerland with a quarter sized dolly.We're looking at developing a retractable wheel platform, combining plastic and steel.We're looking at a layering pallet aiming to optimise unit load fill.We have a project team focused on this, which is particularly important for smaller trucks going in to inner city streets with small loads.

How important is the green agenda to CHEP?

We are becoming much more explicit in our environmental agenda. By the fact of having a pooling solution we are environmentally good but we have realised that other than advocating the benefits of the business model, we hadn't taken it to the next level.  In the last two years, sustainability has become a much bigger driver for us. For example, we appointed for the first time a sustainability director for Europe and have a global sustainability group.

Another good example is the 2 million euros invested in redesigning the Tiel, Netherlands service centre.Energy is saved as paint consumption is minimised through recycling and re-use of paint overspray, as well as the use of infrared drying units to efficiently dry the painted pallets.

We are three years into a five year program to automate service centres across Europe.We have facilities in Manchester that have all the latest equipment and the next service centre in the UK to be updated will be Avonmouth.

Are increasing wood prices affecting your business?

Its driving our costs up, and this puts a greater emphasis on efficiencies. Our customers don't get that passed on, we are able to absorb that in our processes.

On the other hand, it is a benefit. Rising wood prices drives up the cost of white wood pallets for companies using their own pallets or in an exchange type solution, so a pooling solution becomes more attractive.

Typically a pooling solution is more expensive than a white wood solution, but as white wood prices rise, this gap narrows and our offering becomes more attractive.We also have global purchasing power which helps.