Crate Hire – A Cost-Effective Solution

How hiring rather buying transit equipment can save you money

30 March 2010

The use of plastic crates within the food industry is now so widespread that although extensively used, are seldom seen to hold any intrinsic value. And, as a result like most packaging formats are often viewed as the property of the purchaser. This may mean that the original crate owner or goods provider must either shoulder the cost of the crate – or look to a specialist crate hire company.

PPS Equipment Management Ltd, based in the Midlands has for years been providing a realistic solution to losses incurred by users of plastic crates. Crate hire is increasingly seen by the industry as an effective way to control the use, and very often misuse of plastic food crates.

Specialising in crate hire, pallet rental and critically the management of these resources, PPS prides itself on its reputation as an “honest broker” that provides its customers with crate hire, but vitally takes responsibility for the retrieval of crates and pallets from third parties. In effect should a supplier provide goods to a customer who subsequently “loses” the crate PPS takes appropriate action to either get the equipment returned, or charges the party who has lost it. This removes a potentially embarrassing encounter between a supplier and a customer who has lost crates but either denies it or does not want to pay for their replacement.

Right from their earliest days, the PPS management team realised that a potential pitfall when it came to crate hire would be the possibility of its equipment disappearing – in effect being misused or just taken away unjustly. So, from day one and continuing to the present day any company wishing to hire crates from PPS must sign a Users Agreement stating that they will return used equipment (or make it available for collection). The early days saw some unscrupulous customers deliberately flaunting the system, but PPS adopted a very robust procedure for having their equipment returned and today crate hire customers seldom abuse the system.

It is for this very reason that crate hire has become more popular over the past few years. Customers who send out products – e.g. food are indeed specialists in that product but not in the management of returnable transit equipment. Someone needs to pay for this equipment and unfortunately it is often the manufacturer of the products who simply acknowledges that their customer is improperly keeping the packaging medium – e.g. food crates – and just accepts that he must bear the cost of its replacement.

Crate hire through a specialist company like PPS virtually eradicates this issue. After all the crates or other returnable transit equipment represent the assets of PPS so the company ensures that it goes to every length to ensure its assets are returned and then re-introduced into the equipment pool as quickly as possible.

There will always of course be a degree of “shrinkage” in any crate hire system – this may be a crate coming to the end of its working life (in which case it is sent for re-cycling) or it is genuinely lost or broken. PPS over the years has adopted the policy of having sufficient crates within its crate hire pool, plus a buffer stock to satisfy unexpected demand or seasonal peaks. This means that the assets work very efficiently to ensure good return on the investment.

Crate hire operations at PPS are mainly concerned with the food industry. These tend to use the larger volume throughputs and PPS has made crate hire within the food industry a key priority in its ongoing business development.

PPS decided to base its main operational hub for its crate hire business in the Midlands; geographically suitably close to the business centre of the UK, the operation at Measham also includes an industrial scale wash plant where all equipment, both pallets and crates is washed prior to being re-introduced into the crate hire pool. Working with a number of blue chip companies and key retailers the company decided to work towards the highest standards of efficiency, cleanliness and hygiene and last year became accredited to ISO 22000:2005.

Expanding their operation both in crate hire and equipment management, PPS will open a new state-of-the-art wash site in Lincolnshire in April 2010. The location of this site is strategic from both a crate wash and crate hire perspective. This geographic region is home to a large number of fresh produce companies all of whom are using plastic crates and / or plastic pallet boxes today.

Director of PPS, Iain McArthur commented “While the core business of PPS is undoubtedly crate hire, pallet hire and other transit packaging rentals we have consciously made the effort not to spread ourselves too thin and have concentrated on certain market segments. Most of our business, certainly in crate hire is to the food processor arena where we have built up a solid customer base through the UK.

Space restrictions meant that we were unable to expand our Midlands operations, so we looked at where the potential markets lay, then decided to set up a new site in Lincolnshire. Not only will we offer the same crate hire services there, but we will open a high-tech wash plant capable of washing crates, pallets and pallet boxes. So far there has been a high take-up of interest from local food companies – some of whom are impatient for us to commence operations!”

All of the services PPS provide are viewable via their website. To find out more information you can contact a member of the PPS by calling 01530 515 333, or by filling out their ‘Contact Us’ form.

PPS is an established company that has many years experience within the Returnable Transit Equipment trade. To see how they can improve the efficiency of your business, visit ppsequipment.co.uk.