ADELAIDE, Australia-According to the Reuters News Agency, Brambles, the world's top supplier of pallets, parent company of CHEP USA, has indicated a delay in its talks with Wal-Mart Stores, the U.S. retailing giant, on a revised pallet management arrangement, sending its shares down 10%.
Brambles has incurred $10.9 million of costs from temporary deals with Wal-Mart for the supply and management of pallets and has budgeted another $30 million in similar costs for the current financial year.
Brambles said that Wal-Mart's review of the pallet management arrangement had not led to similar reviews by other clients. But Brambles shares fell 13% to $7.41 Australian dollars, or $6.43, bucking a near 1% rise for the benchmark S&P/ASX 200 index.
"Finalization of an agreement is taking longer than expected due to the complex nature of the management of pallet flows in the Wal- Mart network and the involvement of a number of third-party pallet management service providers in the new arrangements," Brambles said in a statement.
