A crate is provided for holding and transporting products such as plastic milk containers. In accordance with one aspect, a tighter lateral tolerance or fit is provided to stabilize and strengthen telescopic stacking of crates by contouring an inner surface of the side walls to provide a smaller dimension in the opening of the crate, such as by selectively removing or reducing any outward taper or draft of the side walls. In accordance with another aspect, loading forces are directly transferred to a bottom drag rail by forming the side walls to position at least a portion of the side wall inner surface over the drag rail.