ENVIRONMENTAL BENEFITS OF CHEP USA PALLET POOLING

ENVIRONMENTAL BENEFITS OF CHEP USA PALLET POOLING

CHEP OVERVIEW CHEP Equipment Pooling Systems: www.chep.com 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

EXAMPLE CUSTOMERS

HOW POOLING WORKS Service Center Manufacturer (Emitter) Service Center Retailer (Distributor) Service Center Emitter Distributor Service Center 1. Ready-for-use pallets are issued to manufacturers and growers. 2. Manufacturers load their products and ship them through the supply chain. 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. CHEP refers to customers at this stage as emitters, as they move equipment under load through the supply chain.

ENVIRONMENTAL SUSTAINABILITY COMMITMENT CHEP Considers Environmental Sustainability And Social Accountability Key Corporate Values & Priorities. CHEP Environmental Sustainability Policy: 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 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. REUSE: Higher quality platforms are built initially. Continuous inspection, maintenance, and repair further prolongs the useful life of pooled pallets. RECYCLE: Controlled ownership, asset management, and end of life management helps keep waste out of landfills.

ENVIRONMENTAL SAVINGS POTENTIAL LIFE CYCLE INVENTORY (LCI) ANALYSIS FINDINGS 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: *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% * Findings represent national average approximations over the life-cycle of systems evaluated Source: Franklin Associates, "Solid Waste Analysis And Life Cycle Inventory Of Pallet Systems", 2006 Update

CHEP PROGRAM ENVIRONMENTAL IMPACT 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

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.

CHEP VALUE COMPONENTS An Economically & Environmentally Beneficial Supply Chain Solution Transportation Product Damage & Safety Platform Procurement Total Platform Program Cost Environmental Sustainability CHEP Provides Shared-Use, High Quality Shipping Platforms And Innovative Solutions That Can: Material Handling & Warehouse Efficiencies Platform Management & Administration Reduce Total Program Costs Increase Operational Efficiencies Decrease Product Damage Deliver Environmental Benefits Reduce Environmental Footprint Support Responsible Sourcing Policies Contribute To Success Of Packaging Reduction Initiatives Without Increasing Product Damage

THANK YOU FOR MORE INFORMATION, CONTACT: TIM SMITH VICE PRESIDENT, BUSINESS DEVELOPMENT CHEP USA tim.smith@chep.com www.chep.com