Pallet Rental Program  

Equally innovative was the introduction of a pallet-leasing scheme. The pilot study also found that customers can only enjoy a higher internal rate of return (IRR) through leasing instead of buying of pallets. According to Mr Tan Jin Soon, Executive Director SANC, companies opted to lease rather than purchase the Standard Pallets due to the huge price differential offered for the pilot study. "Adopting (buying) each pallet costs $33, but leasing can cost as low as few cents per day! The reduction in the cost of ownership makes up 51% of the benefits of adopting standard pallets, making it a compelling reason to lease in the pilot study," said Mr Tan. As all pallet-leasing businesses then were foreign-owned, LHT seized the opportunity to become the first local company to lease the ECR pallets in Jan 2001.

"By introducing our ECR pallet rental scheme, we allow our customers to better manage their logistics requirements and optimise storage space; offer them significant cost savings; and help reduce the cost of ownership," said Mr Neo Koon Boo, Managing Director, LHT. In addition, companies who chose to lease the ECR pallets also experienced an increase in productivity.

Currently, an average of 65,000 pallets including those from other leasing companies are leased out daily. By year's end, LHT hopes to hit an average of 100,000 pallet rentals per day. The rental business has also paid off handsomely as it brings in an annual revenue of about $600,000.