ENVIRONMENTAL BENEFITS OF CHEP USA PALLET

POOLING

CHEP OVERVIEW

CHEP Equipment Pooling Systems:

• Global leader in wooden pallet and container pooling services

• 285M pallets and shipping containers • 45 countries; 7700+ employees; 450+

service centers• 300,000 customer locations and

growing• Provides a strategic business option

for customers which can improve daily supply chain operations

• Provides An Environmentally Superior Shipping Option For Customers

www.chep.com

EXAMPLE CUSTOMERS

HOW POOLING WORKS

CHEP refers to customers at this stage as emitters, as they move equipment under load through the supply chain.

Service Center

Service Center Retailer(Distributor)

Manufacturer(Emitter)

1. Ready-for-use pallets are issued to manufacturers and growers.

Service Center

2. Manufacturers load their products and ship them through the supply chain.

Emitter Distributor

3. The receiving retailer off-loads the goods and returns the pallets to the nearest service center.

4. All returned pallets are inspected and conditioned to ensure quality standards, then made ready for use.

Service Center

ENVIRONMENTAL SUSTAINABILITY COMMITMENT

CHEP is committed to driving environmental sustainability in the global supply chains we serve. As the leader in pallet and container pooling solutions, our goal is to improve overall supply chain efficiency and sustainability through our product and service offerings.

To accomplish this goal of driving integrated business performance and environmental stewardship, sustainable development criteria will always be a core component in the design and execution of all products, services, and processes.

A commitment to continuous improvement and social accountability is expected of each and every CHEP employee as we work together with our customers and industry partners to drive supply chain efficiency and sustainability.

CHEP Environmental Sustainability Policy:

CHEP Considers Environmental Sustainability And Social Accountability Key Corporate Values & Priorities.

CHEP USA LUMBER SOURCING POLICIES

CHEP USA, LUMBER SOURCING POLICIES:• CHEP sources 100% of lumber from certified

managed forests.– Managed forests help to prevent deforestation.

They control responsible harvesting, reforestation, and biodiversity preservation.

– For example, most CHEP suppliers plant 3+ trees for every 1 tree harvested.

• CHEP prohibits the use of harmful chemical additives in the lumber once it has been harvested.

– CHEP's Lumber Supplier Certification Process includes site visits and periodic audits by third-party timber experts to ensure compliance and ongoing process/quality control.

WHY IS POOLING BETTER FOR THE ENVIRONMENT?

REDUCE:Pooling reduces burdens on lumber supply and waste streams by responsible use of wood in products that are designed for repeated use,and by decreasing pallet-related product damage through superior product design.

RECYCLE:Controlled ownership, asset management, and end of life management helps keep waste out of landfills.

REUSE:Higher quality platforms are built initially.Continuous inspection, maintenance, and repair further prolongs the useful life of pooled pallets.

ENVIRONMENTAL SAVINGS POTENTIALLIFE CYCLE INVENTORY (LCI) ANALYSIS FINDINGS

*As compared with the CHEP USA Block Pallet Pooling System for an equivalent number of trips

One-Way Whitewood

Pallet Exchange Whitewood

Corrugate Slipsheet

Incremental Solid Waste Generation + 20 times + 7.5 times + 2.6 times

Incremental Energy Consumption + 125% + 28% + 18%Incremental Greenhouse Gas Emissions

+ 136% + 33% + 4%

Third-Party Life Cycle Inventory (LCI) results reveal the CHEP Platform produces less solid waste, consumes less total energy, and generates less greenhouse gas emissions than other common shipping platforms:

* Findings represent national average approximations over the life-cycle of systems evaluatedSource: Franklin Associates, "Solid Waste Analysis And Life Cycle Inventory Of Pallet Systems", 2006 Update

The life-cycle environmental savings created by members of the CHEP USA pooling program in 2007 amounted to roughly*:

– 2.5 billion pounds of solid waste, – 8 trillion BTUs of energy, and – 1.4 billion pounds of greenhouse gas emissions.

These savings are equivalent to:– Over 111,000 dump trucks filled with solid waste, – Enough electricity to power every household in the cities

of Tampa and Orlando, Florida combined for a year, and– Over 118,000 cars taken off the road in terms of annual

CO2 emissions*Note: Results represent the LCI environmental benefits of the CHEP system as compared against one-way whitewood. Sources: Franklin Associates, "Solid Waste Analysis And Life Cycle Inventory Of Pallet Systems", 2006 Update; National Wooden Pallet & Container Association, Grocery Manufacturers Association, Food Marketing Institute; US Energy Information Association, US Environmental Protection Agency

CHEP PROGRAM ENVIRONMENTAL IMPACT

ENVIRONMENTAL BENEFITS OF POOLED WOODEN PALLETS VS. PLASTIC PALLETS

• Wood is a renewable resource. Plastic pallets are made from natural gas, a nonrenewable resource.

• The process of extracting and processing fossil fuels is extremely energy intensive and emits a significant amount of greenhouse gases.

Results from a third party LCA study conducted in the Netherlands show that “multiple-use wood pallets use considerably less raw materials and energy and contribute far less emissions into water and air than plastic pallets”.

Transportation

Product Damage

& Safety

EnvironmentalSustainability

Platform Management

&Administration

Material Handling

&WarehouseEfficiencies

PlatformProcurement

TotalPlatformProgram

Cost

CHEP VALUE COMPONENTS

Reduce Total Program CostsIncrease Operational EfficienciesDecrease Product DamageDeliver Environmental Benefits

• Reduce Environmental Footprint • Support Responsible Sourcing

Policies• Contribute To Success Of

Packaging Reduction Initiatives Without Increasing Product Damage

An Economically & Environmentally Beneficial Supply Chain Solution…

CHEP Provides Shared-Use, High Quality Shipping Platforms And Innovative Solutions That Can:

THANK YOUFOR MORE INFORMATION, CONTACT:

TIM SMITHVICE PRESIDENT, BUSINESS DEVELOPMENT

CHEP USA

tim.smith@chep.com www.chep.com