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Press release for CHEP in Europe written by Richard Stewart


NORTHERN ITALIAN DISTRIBUTION GROUP SWITCHES TO CHEP POOLED PALLETS

CHEP announced today that Agor à Network, a leading distribution group in Northern Italy, has switched from white exchange pallets to CHEP's pallet management system.

CHEP, the global leader in pallet and container pooling services, announced today that Agor à Network, a leading distribution chain operating primarily in Northern Italy, has switched from the traditional white pallet exchange to CHEP's pooled pallet management system to reduce “hidden” costs and avoid problems associated with exchange pallets.

“ White Pallet Exchange seems straightforward on paper, however in reality it can generate significant problems like unnecessary capital expenditure, administrative cost and environmental impact,” related Mr. Fabrizio Carboni, Operations Manager of Kuehne+Nagel, Agorà Network's logistics operator . “It is an unwanted and costly distraction that is unrelated to our core business activity – the distribution of goods,” he observed.

A CHEP pooled pallet management program was selected by Agor à Network, which is made up of four leading distribution chains in North Italy : Gruppo Iperal, Gruppo Orrigoni, Gruppo Poli and Grupo Sogegross. They have joined forces in order to create economies of scale and to adopt “best practices” in the logistics field to become more efficient and competitive, while saving costs, explained Mr. Carboni.

“An EPAL white pallet costs about 8 Euros. If we bear in mind that the average annual level of losses is around 20%, we see that the costs for each supply chain add up to millions of Euros. This is an unnecessary cost that affects the price of goods, ultimately hitting consumers in their wallets. Distribution chains still using white pallet exchange systems are less competitive than those which have switched to palletisation pooling systems,” he related.

The traditional White Pallet Exchange system's primary shortcoming is limited standardisation with respect to pallet size, specification, material type and quality, CHEP pointed out. The exchange system also carries hidden costs, which are tied to pallet handling, repairs, maintenance and losses, added CHEP.

According to Mr. Carboni, Agorà Network considers the CHEP pallet management program the best alternative to white exchange pallets. “It's the best solution from all points of view – economical, logistics and ecological,” Mr. Carboni continued.

“ We are opting to switch to equipment pooling providers such as CHEP because e quipment pooling provides an environmentally sustainable solution which eliminates the need for costly recovery transportation of empty pallets,” he commented. “Pallet pooling also avoids disputes between manufacturers, transporters and retailers relating to pallet quantities that have been exchanged,” he added.

CHEP noted that other distribution chains and transportation associations such as ANITA and Fedespedi have expressed similar views. They have rejected the hidden costs associated with pallet management, as have various Italian government institutions which are very worried about the threat to the environment posed by the waste generated through the use of non-recycled white pallets, said CHEP.

“We are totally convinced that CHEP is the future,” said Mr. Carboni. “The major European distribution chains which have set up in Italy have been working with CHEP for a number of years now. We are a local group and have come to understand that working with CHEP allows us to be more efficient and competitive. We hope that the other national distribution chains see it this way,” he concluded.

According to CHEP, the University of Milan recently published a study that illustrates the problems associated with the White Pallet Exchange System. CHEP emerges as the best solution to problems identified in the study, bringing added value to the management of both pallets and containers under a single pooling system, CHEP stated.

The CHEP pallet pooling service enables the Agorà Network to distribute its products across the supply chain in the most efficient and cost-effective way, CHEP explained. The company offers consultancy in outsourcing services to all the links in the supply chain, helping companies comply with and work under the commercial conditions in their countries and assisting local and regional firms to develop and grow, noted CHEP.

ABOUT AGORÀ NETWORK / KUEHNE + NAGEL

Agorà Network is a leading distribution chain, operating primarily in Northern Italy . It manages about 400 points of sale and invoices 1,600 million Euros. Together with Carrefour and Finiper, Agor à Network has created “GDPlus,” a purchasing centre which brings together 16.7% of the Italian market. “Primia” is the group's main white brand, totalling 450 products. Kuehne + Nagel, a global leader in international forwarding, has established a close partnership with Agorà Network. Founded in 1890, Kuehne + Nagel acquired ACR Logistics in 2006 and ranks among the top three worldwide contract logistics operators. It has more than 53,000 employees at 850 locations in more than 100 countries

Further information about Agorà Network is available at : http://www.agora-net.it

Further information about Kuehne + Nagel is available at : www.kn-portal.com

ABOUT CHEP

CHEP is the global leader in pallet and container pooling services, serving many of the world's largest companies. The company has more than 7,000 employees and operates in 45 countries. Combining superior technology and an asset base of more than 300 million pallets and containers, CHEP offers its customers exceptional value, a platform that enables reduction in customer product damage and an environmentally sustainable logistical solution. Supply chains served include consumer goods, produce, beverage and the automotive industry. With global partners that include Proctor and Gamble, SYSCO, Kellogg's, Kraft, Nestle, Ford and GM, CHEP is known for handling the world's most important products. Everyday.

Further information about CHEP is available at: www.chep.com.

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