Virginia Tech Researchers Urge Single Grading Method for Cants

The pallet industry’s top researcher and three
colleagues have recommended the establishment of a single or minimum grading method to
differentiate quality of pallet cants.

The proposal was outlined by Dr. Marshall ("Mark") White,
director of the pallet and container laboratory at Virginia Tech, at the recent annual
meeting of the National Wooden Pallet and Container Association in La Jolla, Calif.

Mark made a presentation on research into pallet cant grading conducted
by him and three Virginia Tech colleagues and said the proposal would be submitted to the
NWPCA’s standards committee for consideration. A single, minimum hardwood cant grade
could substantially increase profits of pallet manufacturers by weeding out cants of poor
quality that cost them money, he suggested.

However, Mark conceded the idea likely would be given a cool reception
by the hardwood lumber industry. If the NWPCA decided to pursue the initiative, the route
would be to ask the National Hardwood Lumber Association to endorse the proposal and
include a minimum grade for pallet cants in the association’s grading book.
"That’s going to be a really hard sell," he admitted.

"It’s going to be a hard sell to the lumber industry, I know
that….But we have to start sometime and some where. And I think we have some data to
begin to push the agenda a little bit."

The other Virginia Tech researchers who participated in the study were
Hal. L. Mitchell, Philip Araman and Cynthia West. They conducted yield studies at 28
pallet mills in the Eastern U.S., sampling more than 47,000 board feet of hardwood cants.
Bundles of cants were randomly selected and graded No. 1, 2, or 3 according to a proposed
grading scheme. Cants were graded No. 1 for 0-15% unsound wood, No. 2 for 15-30%, and No.
3 for over 30% unsound defects. The pallet mills sawed the cants into parts using a wide
range of sawing systems, both gang circular saws and thin kerf band saws. The study
relating cant quality to pallet part yield was the first of its type, according to Mark.

Although the study was based on three proposed pallet cant grades, the
findings led the researchers to recommend the establishment of only a single, minimum
grade. "The beauty of this study is, we think three grades are dumb," Mark told
a gathering at the NWPCA meeting. "This study shows that…in the world of grading
cants, one minimum grade makes a lot of sense."

The cost of raw material is more than the price of cants, Mark noted.
The cost of raw material includes the cost to the pallet manufacturer to saw the cants
into pallet parts and also is impacted by the yield of parts. A grading system could help
pallet manufacturers more accurately determine raw material cost and help sawmills
determine cant value.

Mark noted that pallet manufacturers in the Western U.S. already are
familiar with and used to dealing in graded softwood lumber. Utility and economy grades
are the grades of choice on the West Coast. "The point I’m trying to make is
that we don’t have a corresponding standard grade in the East for hardwood," he
said.

Under the three proposed grades, the study showed that pallet part
yield was 83% from No. 1, 77% from No. 2, and 47% for No. 3. Nearly 90% of the cants
sampled were graded No. 1 or No. 2. "And by the way, you’re making money on
these," Mark said. By contrast, pallet mills that saw poor quality cants are losing a
"tremendous amount of money," he said.

Average losses from defects were 2% for the No. 1, 8% for No. 2, and
39% for No. 3. Cant quality significantly affects cost, said Mark. "If you’re
paying the same price for those cants, there’s a huge difference in cost to you for
those cants."

"What it tends to shows us, that if it’s in any way practical
to grade cants using one minimum grade, it looks like that separation between proposed 2
and 3…is about right," said Mark. "We feel that probably because there was
very little difference between 1s and 2s in our study, because there’s a huge
difference in 2 and 3…a first definition for the minium quality of a hardwood cant in
our market today should be based on a 70% minimum yield, or thereabouts…Or a 30%
unsound."

"Clearly," he added, "the study shows that when we
exceed this 30% level, we’re losing money on those cants."

A minimum grading system would provide several benefits to the market
place, according to Mark. It would help stabilize cant and pallet lumber costs; when a
minimum quality is defined and pallet manufacturers begin buying to that standard, a
higher level of price stabilization would result, he said. A grade also would provide the
basis for a more realistic pricing scheme, and sawmills would divert additional material
for pallet cants and less to alternative markets. Lastly, a grading methodology would
improve communication between buyers and sellers.

A sawmill’s cost should not necessarily increase by sorting
pallets to a minimum grade, Mark said. "We’re only talking about one grade, a
pallet cant grade. We’re telling them to separate the low quality, but in the end
they’re still going to have to stack only for 4-by-6 pallet cants." The only
exception would be an additional "pull" from the green chain for a short, he
acknowledged. (Instead of chipping poor quality cants, Mark suggested that sawmills should
cut them back to a short and sell them as a short to the flooring market or pallet
market.)

"Let’s develop a minimum grade. Let’s try to get those
out of the system. Adjust the pricing for the cant so it’s a win-win," Mark
said.

The study determined that average kerf loss with band saws was about
6%, and for circular gang saws, about 13% — for a difference of 7%. "Emphasis on
kerf, I think, is worth-while," Mark told the audience.

When cutting multiple-length pallet parts from cants, yield tended to
be slightly higher — about 2% — than cutting the same-length parts out of cants,
the research showed. "When you had an order where you had to cut all one size, you
were throwing away yield," Mark said. "That was it."