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Imported Lumber for Manufacturing Pallets
Wholesalers Begin Importing Pallet Stock from South America
By Ed Brindley
Date Posted: 10/5/2004
Low-grade hardwood prices reached record high levels this year about the time that low-grade softwood prices skyrocketed to levels never before approached, particularly in the West. Prices for low-grade material are spiking at a time when pallet buyers are indoctrinated to dig in hard against anything that even resembles a price increase. Most buyers had never seen a market where pallet suppliers had to pay such exorbitant lumber prices. In addition, growth in the pallet recycling market opened up supply options that were less developed than during previous lumber shortages.
In order to keep their customers supplied, pallet companies are examining all kinds of options to obtain reliable sources of lumber at an affordable price. Thus, it is not surprising that imported low-grade pallet lumber has surfaced as an option. This article presents both a historical perspective and futuristic glance into imported pallet lumber.
Before looking at the specifics of the lumber supply market, a basic point needs to be emphasized. Lumber is by far the biggest cost of a pallet manufacturer. As such, lumber costs will command a high level of interest, particularly when the market is moving or reaches higher levels. A tighter local lumber supply, and hence a higher price, has prompted the interest in looking farther away for material. A combination of mill lumber prices and delivery costs has to be considered along with species, delivery dependability and a variety of other factors, such as phytosanitary requirements. The idea of sourcing pallet lumber outside of
In the late 1970s, Canadian SPF and
When quotas and tariffs on Canadian RL lumber were put in affect during the 1990s, cut stock became a more prominent part of the market because pre-cut pallet lumber ‘kits’ were not counted toward quotas nor did they carry tariffs. As long as deck boards and stringers were packaged together in complete pallet ‘kits,’ they were considered value-added products that were exempt from the quota and tariffs. Thus, SPF cut stock became a significant portion of imported Canadian softwood pallet lumber.
More recently, concern for complying with global phytosanitary rules for solid wood packaging makes kiln-dried lumber particularly attractive. We are just beginning to feel the impact of the growing demand for heat-treated lumber; so kiln-dried Canadian SPF pre-cut and RL lumber may become more important for wooden pallets and containers as companies adjust to international shipping requirements.
Imported Canadian hardwoods are less of a factor in the
Sources Outside of N.A.
About 20 years ago, a few people from
In more recent years, the term ‘global markets’ has become a buzz word. It once seemed that the pallet industry might be immune to the globalization of the economy. Businesses that use pallets typically are served by pallet suppliers that are within 100 to 150 miles.
However, the pallet industry has to have a somewhat global outlook because American-made pallets are used to ship goods over wide geographic regions -- and frequently to export markets. The global phytosanitary rules that arose in recent years underscore the fact that the U.S. pallet and container industry does not exist on an island unto itself; our industry supplies shipping platforms that are used in international commerce.
Until the last couple of years, however, our lumber was supplied only by North American mills and remanufacturers. That was yesterday; today and tomorrow may be different. Change has become commonplace in our society.
Previously it was unrealistic to consider importing pallet lumber when material was readily available at affordable prices from established local and regional sources. However, the crazy markets of the last couple of years have spurred some pallet companies to look abroad for potentially cheaper lumber sources. With low-grade lumber prices being at record highs in the
Cut-to-length pre-cut pallet lumber has been coming into the
In the late 1990s, CHEP had some of its
The last couple of years, a few lumber wholesalers have entered the arena to supply South American pre-cut pallet lumber, both softwoods and Eucalyptus hardwood. South American Eucalyptus has made inroads into
"At this point in time the grandis has not penetrated inland
Ian described Grandis as comparing well to other hardwoods. "Green grandis lumber is equal in performance to yellow poplar and quite a bit stronger than
Due to insufficient kiln capacity in
Grandis, like other fast growing species in the
Ian estimated that 10 to 15 million board feet of pallet grade hardwood is available monthly from
In addition to Eucalyptus, softwood cut stock is coming into the U.S. Southern Yellow Pine species are coming from
South American countries have been growing tree plantations for several decades. South American plywood and lumber are beginning to become more common in the