This is Sunday Supply Chain Stories, where we revisit the foundations that continue to shape how inventory moves, returns and recovers value.
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During the Second World War, the United States military set itself up in Australia, which served as the rear supply base for the entire Southwest Pacific campaign. For four years the US Army Services of Supply staged men and materiel through base sections at Brisbane, Townsville, Sydney, and Melbourne: rations, clothing, ammunition, engineering stores, vehicles, and crated aircraft, all warehoused and pushed forward to New Guinea. A single Brisbane depot, Camp Meeandah, ran nineteen warehouses with more than a million square feet of covered storage. Moving cargo at that volume, the Americans brought with them a new working method Australians had never seen at scale: palletised loads, lifted by forklift, moved through American supply depots in minutes while Australian wharf labourers were still breaking down cargo by hand, case by case, on their shoulders. When the war ended, shipping pallets and handling equipment back across the Pacific made no economic sense. The Americans sailed home and decided to leave it behind in Australia.
What remained in Australian ports along the east coast was a pool of roughly 60,000 wooden pallets and about 1,000 machines, including forklift trucks and cranes. The Australian federal government, recognising what that equipment could do for a country still moving most of its freight by muscle, took ownership of the surplus in 1946 and gave it a functional, bureaucratic name: the Commonwealth Handling Equipment Pool, shortened to CHEP. It is generally regarded as the first formal pallet pooling system in the world by trying to extract industrial value from assets that would otherwise rot on the docks.
Rather than selling the pallets and machines off to individual companies, the government hired them out, so a manufacturer or a wharf operator could draw equipment from the pool, use it, and return it, paying for access while the asset itself never left the pool. That single design decision, made mostly for administrative convenience, separated the use of the asset from the ownership of the asset, and everything that followed was built on it.
The pool also standardised the platform itself. The American pallets left behind measured roughly 46 by 46 inches, and CHEP adopted that footprint as its standard, a dimension later metricated to 1165 by 1165 millimetres and still known today as the Australian standard pallet. Standardisation meant any pallet in the pool could serve any user, any racking position, and any truck deck in the network. Interchangeability was the quiet prerequisite for everything the pool would become.
In April 1958, an Australian transport company from Newcastle, New South Wales, bought the pool from the Australian government. Brambles Industries wanted the cranes and the forklift trucks, which fit its heavy haulage and industrial services business. The pallets came along in the transaction as a bonus, and by the company's own telling, they were not the reason for the purchase. Within a few years Brambles was operating the largest pool of pallets and containers in the Southern Hemisphere, and the bonus had quietly become the business.
The man who saw what the pool could be was Oliver Richter, who joined Brambles as commercial manager in 1965. At the 1972 World Pallet Congress he argued that pooling was the most efficient and economical method for the manufacture and distribution of the world's production, and he set out to prove it beyond Australia. New Zealand came in 1974. Then, on 1 April 1975, after forming a joint venture with the British industrial group GKN, Brambles launched CHEP UK, its first major overseas operation. Eighteen months after launch, the UK pool was serving 165 customers with 500,000 pallets in circulation. The operation broke even in two years, ahead of every projection. CHEP Europe followed in 1978, then South Africa, Canada, and France. The pattern repeated in each market: one standard platform, one pool, many operators, continuous circulation.
The operational logic underneath CHEP's growth is worth explaning. A pallet is a low-value asset that passes through many hands. A manufacturer loads it, a haulier moves it, a distribution centre receives it, a retailer empties it. In an ownership model, every one of those transfers is a potential loss point, because the party holding the pallet has no stake in what happens to it next. The industry answer for decades was the exchange system, where a receiver handed back an equivalent pallet for every one received. In practice, exchange systems bled quality and count at every node, because equivalent was a matter of opinion and nobody audited the swap.
CHEP's model replaced exchange with a pool and a ledger, and the cycle is worth walking through once in full. A manufacturer draws pallets from a CHEP service centre and is charged hire for every day it holds them. When it ships loaded pallets to a retailer, it declares the transfer, and the hire obligation moves to the receiver's account along with the pallets. When the retailer empties them, CHEP collects them back into the nearest service centre, where each pallet is inspected, repaired if needed, and requalified for issue to the next customer nearby. No pallet is ever sold, so it never stops belonging to the pool no matter whose dock it sits on, and every movement in the cycle is a recorded event against a specific account. The network could tell you, at any point, how many assets each participant held and for how long, across thousands of locations the pool operator did not own and never visited. That is the principle the whole system rests on: visibility without ownership at every node.
The economics followed from density. Every new participant in the pool shortened the average distance a pallet travelled empty, because a pallet emptied at a retailer could be reissued to the nearest manufacturer rather than hauled back to its point of origin. A pooled pallet cycling continuously spreads its capital cost, its repair cost, and its transport cost across every trip it makes, which is why the cost-to-serve per cycle falls as the network grows. A one-way pallet carries its entire cost on a single journey and then becomes someone else's disposal problem.
There was also a structural insight that operators today should sit with. Brambles built the visibility infrastructure because it had to. The pool owner was the only party with an economic interest in the whole loop, so the pool owner carried the tracking, the auditing, the recovery teams that retrieved strays from non-participating sites, and the repair capacity. No single manufacturer or retailer would ever have built that infrastructure alone, because no single participant captured enough of the benefit. Shared assets created the commercial reason for shared visibility, and that visibility became an asset in its own right.
The hardest test came in the United States. American grocery ran on the exchange system and on cheap whitewood pallets, unbranded platforms built to survive a trip or two and traded loosely between parties, and the entrenched view was that a national pallet pool was impossible in a market that size. Brambles watched the US for more than a decade, bought a US pallet repair business to build contacts and learn the terrain, and finally launched CHEP USA in September 1990, committing around US$100 million to establish the pool. The bet worked. The blue pallet became standard infrastructure for the largest consumer goods manufacturers and retailers in the country, in a market that had been certain pooling could not scale there.
The numbers today describe what compounding network density looks like over seven decades. Brambles reported in its 2025 annual report an asset pool of roughly 348 million pallets, crates, and containers, circulating through more than 750 service centres across approximately 60 countries, generating US$6.67 billion in revenue. In 2016 the company established BXB Digital to put tracking technology on the assets themselves, moving the ledger from declared transfers toward directly observed movement. The pool that began with war surplus on Australian wharves is now one of the largest circular asset systems ever built, and it was profitable at every stage of that journey. It did not need a sustainability mandate to close the loop. The margin was in the loop.
What makes this history current is that most of the reverse logistics and recommerce infrastructure being built right now faces exactly the constraint CHEP solved in 1946. Returns, reusable packaging, rental assets, and refurbished inventory all pass through nodes the operator does not own: carrier hubs, 3PL docks, retail backrooms, consumer households. The instinct in modern operations is to solve that with ownership or with technology, either controlling more of the network or tagging everything and hoping the data arrives. CHEP's record suggests the harder and more valuable work is commercial design: the standard, the hire terms, and the account structure did the heavy lifting for decades. The sensor on the pallet came seventy years after the system already worked.
The contrast with how most companies handle returnable assets today is not flattering. Totes, rollcages, dunnage, and returnable packaging routinely run loss rates that would have ended careers at CHEP, largely because nobody holds the ledger. The asset belongs to everyone in the chain and therefore to no one. Recovery value in recommerce leaks the same way: units sit ungraded at nodes where no party has an economic interest in moving them, because the operator who owns the value cannot see the node, and the operator who runs the node does not own the value. The milkman solved this inside one company's route. CHEP solved it across an entire economy's worth of independent trading partners, which is the version of the problem modern operators actually face.
There is one more lesson in the origin story worth keeping. The pool began as stranded value, equipment worth less than its journey home, that a government chose to treat as infrastructure rather than scrap. Every returns operation holds stranded value in exactly that form: inventory whose reverse leg looks more expensive than its book value. The answer in 1946 was to build a system in which the units never stopped working, and that reframing, from disposal problem to shared productive asset, is available to any operator willing to design the commercial structure around it.
For practitioners: Which assets in your operation pass through nodes you do not own, and at which of those nodes does custody currently go unrecorded? If you charged internal or external partners for the time they hold your returnable assets or unprocessed returns, the way a pool charges hire, how would behaviour at each node change? Where would standardising a platform, a grading scale, or a container across your trading partners unlock circulation that ownership boundaries currently block? And is there stranded value in your network today, inventory or assets priced as a disposal problem, that would justify infrastructure if you priced it as a pool instead?
Sources
Brambles Limited. "Our History: 150 Years of Brambles." Brambles corporate website, 2025. https://www.brambles.com/our-history
Brambles Limited. Annual Report 2025. Brambles Limited, August 2025. https://www.brambles.com/ar2025
Brambles Limited. "Understanding CHEP." Investor briefing transcript, 28 January 2009. https://www.brambles.com/Content/cms/pdf/Transcripts/2009/Understanding_CHEP_Transcript_280109.pdf
FundingUniverse. "History of GKN plc." Company histories archive. https://www.fundinguniverse.com/company-histories/gkn-plc-history/
Dutch Australian Cultural Centre. "Dutch WWII Warehouses and Transport Wharves in Brisbane" (Camp Meeandah warehouse capacity and cargo categories). https://dutchaustralianculturalcentre.com.au/archive/dutch-australian-history/military-political-history/dutch-wwii-warehouses-at-us-camp-meeandah-brisbane/
Thank you for reading Sunday Supply Chain Stories!