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Letter from Ed - A Look Into 1999
PE publisher looks into the future of the industry.
By Dr. Ed Brindley
Date Posted: 2/1/1999
A Look into 1999
There has never been a time when more change was coursing through the veins of the pallet industry. What better time to look at some of the issues that our industry will have to face in 1999?
First, we need to understand that so many people think in terms of perceptions instead of facts. Our society seems to be losing sight of truth. We rely on opinion polls because truth is thought of as being in the eye of the beholder and not something that is real and objective.
However, I encourage my pallet friends to make every effort to keep today’s issues of change in the perspective of truth as we examine them.
Pallet ownership is an issue that both our industry and society will have to face. Now that the concept of who owns a pallet in the float has arisen, it is not likely to be resolved quickly or easily. Opinions differ on who owns a pallet that has left its original application stage. It is clear, however, that it will be difficult to turn our backs on this issue. The growing emergence of pallet management is forcing us to deal with it.
What directions are pallet rental and pallet management going to take? Nobody knows the details for sure, but it appears certain that more energy will be spent on managing pallets. The face of our industry probably will change as more money is made from managing instead of simply manufacturing and recycling. But manufacturing and recycling will continue to be essential elements. Pallet companies do not have to rush out and join one of the pallet networking opportunities in order to survive, although networking pallet locations together will grow in importance. More customers will find these services to be valuable.
Alternative materials will continue to push for a bigger share of the huge pallet market. As long as wooden pallets are considerably less expensive than plastic and metal ones, most buyers will continue to prefer them. Initial cost still is the deciding factor in a huge percentage of business decisions. Make no mistake about it, however. Over time, wood will lose some market share. When you have almost the entire market, losing part of it is common. However, nobody knows for sure how much we will lose or how fast. It is a pretty good bet that any change in pallet and container material mix likely will occur gradually, so there is no cause for panic.
Pallet recycling is destined to continue growing. Changes in pallet sortation and repairing will continue at a rapid pace. On one hand, the number of recyclers seems to grow, but many will stay small concerns. On the other hand, more recycling plants will become larger and more automated. Count on recycling to have even a bigger role in our industry next year than it did last year.
With all the changes swirling around our industry, let’s not lose sight of the basics of pallet manufacturing. Emphasis will be placed on such things as reducing saw kerf, splicing pieces of lumber together, and composite materials that combine wood fiber with different binders and agents.
Yet, even pallet assembly could change with the recent emergence of the possibility of using glues. It seems that no part of our industry is immune to the growing pace of change.
One of the biggest problems facing our industry is unquestionably the availability of enough willing workers. As long as the relatively low unemployment rate persists, this situation is not likely to change. Pallet company owners will continue to automate for greater productivity and less dependence on labor. Getting enough qualified, dependable employees will continue to be a problem for our industry.
When the smoke clears on this century, our industry will survive. There will be some financial losers and some winners, but many pallet companies will continue to prosper. The landscape of our industry will change, but many believe that the future is still bright for wooden pallets and containers and their industry.