The agreement is due to a European pallet pool tender process recently undertaken by Heinz, which identified supply chain co-operation as a core requirement.
Reduce 'empty mileage'
Under the contract, Heinz will increase its use of CHEP’s services by adding all its pallet export flows from the European Tomato Ketchup factory in Elst, The Netherlands to the UK.
It is hoped the agreement will maximise equipment utilisation and achieve joint objectives on efficient and sustainable transportation.
Tom Tillemans, European logistics excellence leader, Heinz, told FoodProductionDaily, the company wants to reduce ‘empty mileage’ and increase intermodal transport (inland shipping in The Netherlands).
It will do this by increasing inbound flows of pallets into the Heinz supply chain of raw and packed materials into the factories and ensuring direct return of pallets from retail into Heinz warehouses and making use of CHEP’s pallet carbon neutral service.
“Heinz and CHEP will maximise equipment utilisation by taking surplus pallets (sorted ones) in the CHEP network in the UK and shipping in Samskip containers to the European Tomato Ketchup factory in Elst, The Netherlands using both shortsea shipping and inland shipping modes (from Rotterdam harbour into an inland container terminal close to the Heinz factory),” he said.
“Heinz is using the pallets in the factory, the containers are used for product flows back into the UK and Ireland market.”
Carbon Neutral Pallet service
CHEP Carbon Neutral Pallet service lets customers buy carbon credits to finance emission-reduction projects worldwide.
In Europe, Heinz, CHEP and Samskip, a European transport company, are also participating in a ‘Lean and Green barge project’ to ship products from The Netherlands to the UK.
The programme is headed up by Connekt, a Dutch not-for-profit network for sustainable mobility.
Returning barges will carry empty pallets to Heinz plants, where they are reloaded with product. This will save transportation costs, reduce congestion and greenhouse gases on the roads and optimise supply chain operations.
James McCarthy, president, European pallets operations, CHEP, said it intends to optimise Heinz’s transport and logistics operations.
“Our agreement enables us to build on the existing business, while applying cost and carbon reduction programmes,” he added.
According to Tillemans, CHEP will be providing additional volumes from The Netherlands to the UK and Ireland which it wasn’t doing before as it was previously supplied by another pallet pool provider.
“CHEP will be participating in the supplier excellence program of Heinz and it will increase Heinz transport and logistics operations by elimination of empty mileage through joint collaboration initiatives,” he said.
H.J. Heinz Company is one of the largest US-based food processing companies in the world with around 650 million bottles of Heinz Ketchup being sold every year in 200 countries.