The pages of Pallet Enterprise over the first 30 years have carried some notable statements from industry leaders. As you look back in time, it is interesting to see what they said in comparison to what actually has happened. The staff of the Enterprise picked some of the most notable quotes covering a wide variety of topics from pallet quality problems, technology, the emergence of recycling to lumber market swings and much more.
Do you agree with what others have said? How have some of these predictions panned out? These quotes provide an interesting timeline of the history of the U.S. pallet industry over the last 30 years. Also, many of these comments offer some perspective on worldwide pallet and packaging issues.
1981
Specification Downgrade
“Traditionally, durability or life expectancy has not been considered in developing specifications for wooden pallets. As a consequence, many user industries have downgraded their specifications over the last several years to reduce the price of the pallets. This has resulted in a drastic reduction in the durability of the pallets and a drastic increase in real costs per unit volume of product moved on the pallets.”
–Dr. Walt Wallin of the USFS Northeastern Forest Experiment Station, November/December 1981
1982
No Threat to Wood’s Dominance
“I can’t see anything in the next 20 years that could possibly threaten the supremacy of the wooden pallet. I can recall, between 12 and 15 years ago, people were worried about plastic pallets…There are always ideas that seem to capture peoples’ imaginations as a substitution for wooden pallets…I have always had a saying that if the wooden pallet industry is ever destroyed, it will destroy itself. It won’t be destroyed by substitutes or competition. It could be destroyed by making a poor product, or by making a product that doesn’t serve the end use of the customer.”
–William Sardo, founder of the NWPCA, May/June 1982
Poor Pallet Quality
“I feel strongly that the industry is cutting its own throat, especially in warehouse pallets, by encouraging spec deterioration…I am concerned that we are hurting the reputation of our product and the longevity of our industry by the deterioration of warehouse pallet specs.”
–Jo Anne Scott of Scott Pallets, Jan/Feb 1982
1984
Pallet Pricing
“My personal philosophy is that companies are going to be fewer and larger. The marketplace is large, but it is not infinite. I don’t think it can support the nailing capacity that exists out there. When you think of all the tandem nailing systems in the marketplace, nailing 1500 new pallets a day per shift, we’re getting into scary numbers. I hear everybody saying they’ve seen soft spells before. They’re waiting for this pendulum to swing back. That pendulum stopped, as far as I’m concerned. It doesn’t apply anymore. You can’t wait for a raw material shortage or for your plant to run at 100% to get prices up. As an industry, we’ve got to learn to be profitable at 60% or 65% capacity. We can, if our pricing is correct.”
–Ed Pawlak of Pallet City Inc.
July/August 1984
Brokers vs. Direct Sales
“As soon as you tell a broker so much per board foot. He comes into your area, calls on your customers, and then asks you to bid on it.”
–Henry Taylor, Mountain Valley Farms and Lumber Products, Sept/October 1984
“My brokers, pay on time, in ten days. Direct customers want to pay me in 30 days minimum. At three trailerloads a day, you can get a lot of money tied up in 30 days.”
–Marvin Ball of Ball Brothers
Products, Sept/October 1984
1985
Repaired Pallet Performance
“Nobody ever took time to answer the questions, ‘How good is a used pallet? What criteria do you use to compare a used pallet to a new one?’ We have been the only one so far with enough interest to take used pallets to the lab. We took several pallets of each kind. The sample was not large enough to make any definite statistical conclusions, but well repaired stringer pallets performed about as well as brand new pallets in lab tests.”
–Steve Sykes, president of Interstate Pallet, July/August 1985
Pallet Design System (PDS)
PDS was made available November 1, 1984. It has revolutionized the industry thanks to the efforts of the National Wooden Pallet & Container Association, Virginia Tech and the USDA Forest Service.
“PDS can be used to check the adequacy of an existing pallet design, improve the efficiency of an existing design, or design a new pallet for a new use.”
–Dr. Mark White of Virginia Tech and the Sardo Pallet Lab, Jan/Feb 1985
1987
Used Pallets and Landfills
“The pallet repair industry was ushered in by the need to solve the problem of acres of damaged pallets resting in ‘graveyards’ behind every major user. No longer could these pallets be hauled to dump sites or burned once the pollution control laws were enacted.”
–Jack Thornton of Woodthorn Corp., Sept/Oct 1987
1989
Grocery Industry Committee Studies
Best Models
A group of grocery industry leaders met in 1989 to discuss the future of the fast moving goods supply chain and palletization. They looked at the future of the “GMA” pallet, especially various economic models. The committee included many of the top food producers in the country as well as major retailers. At the time, an industry cooperative pool was envisioned to be significantly cheaper in terms of total cost than a private rental pallet pool.
–1989
1990
Grocery Industry Calls for Innovation
“The wooden pallet as we know it today is a dinosaur. It will not last into the 21st century.”
–Joel Leavitt, the co-chairman of the Grocery Industry Subcommittee on Pallets, March/April 1990
1992
Birth of the Block Pallet Revolution
“The current stringer pallet is not the pallet of the future. Everybody cheats. The system is the biggest culprit…This new block pallet will have to move through a third party rental system. It will not move through the current exchange system.”
–Ross Murdock of Campbell Soup, January/February 1992
1996
Development of the Center for Unit Load Design
“There has been poor communication between designers and people involved in unit-load handling. The lack of a common language has made any communication that much more difficult. Poor communication has lead to inefficient utilization of storage and shipping space, slower material handling speeds, product damage, personal injuries, expensive packaging, expensive handling devides, and expensive pallets. The Center’s initial mission will be be to develop this critical common language.”
–Dr. Mark White, the first director of the Center for Unit Load Design at Virginia Tech, June 1996
1998
Wall Street Journal Calls Wooden Pallets a New Eco-Menace
“As Old Pallets Pile Up, Critics Hammer Them As a New Eco-Menace,” said the Wall Street Journal headline. “They can deliver the goods, but they clog landfills and gobble up trees.”
The main premise of the story was that, with the economy booming, wooden pallets are burgeoning and have become a “divisive environmental issue.”
“Pallets – those splintery wooden platforms on which most consumer goods are shipped – are burying parking lots, snarling traffic, and jamming landfills,” wrote the Journal reporter Daniel Machalaba. A pallet recently blocked traffic near New York’s Times Square for 24 hours, the newspaper reported.
–May 1998
1999
PalEx Merges with IFCO to Form IFCO Systems
“This merger will enable PalEx to participate in the dramatic growth opportunities presented by the global supply chain support market. By integrating innovative logistics with high quality returnable platforms and containers, we can increase the efficiency and reduce the cost of our customers’ retail and industrial distribution activities.”
–Vance Maultsby, executive vice president of IFCO Systems, May 1999
CHEP Legal Showdown
“I was not – and still am not convinced, nor are many others in the pallet industry, that leasing companies can legally maintain ownership over ‘lost’ rental pallets.”
“The only risk that I faced was that CHEP would carry out its threats and that the judicial system would fail me in delivering justice. This is the same situation that all other pallet recycling companies face throughout the United States.”
–Edgar Lozano of Atlas Pallets, September 1999
2000
Online Auctions Impact Pallet Markets
“Pallet people are going online and bidding business at ridiculously low prices. Most pallet companies don’t know how to calculate their costs.”
–Frank Falzone, president of FPF Pallet Plus, June 2000
“What did FreeMarkets do, other than turn on everybody’s computer? They just help everybody bid the price down as a good auctioneer would.”
–Bill Schneider, vice president of sales for Remmey The Pallet Co., June 2000
International Standard Proposed to Control Pests in Wood Packaging
“A relatively short time ago the Asian long-horned beetle problem in Chicago made national news. Wooden packaging coming from China was the culprit. Within the last year or so, international concerns about wooden packaging have become more widespread. Restrictions have been placed on incoming wooden packaging in countries as diverse as China, Brazil and Finland.
“I have heard several industry experts predict that international restrictions will grow. Their best guess has been that some form of heat treatment of wooden packaging most likely will be required.”
–Dr. Ed Brindley, August 2000
2002
E-Nightmare: Online Procurement Offers Low Prices, Delivers Horror Stories
“My experience has been that customers use Web auctions to leverage their current suppliers.”
–Richard Montest, vice president of Woodworks Unlimited, June 2002
“A high school kid on a computer could bid against you because the auction companies are not verifying the capabilities of bidders…Online auctions are a mind game to get people to work for nothing.”
–Asher Tourison, president of Acme Pallet in Holland, Mich., June 2002
2003
OSHA Cracks Down on Bandsaw Safety
“I think many OSHA inspectors view their agency as the proverbial hornets nest that is best not disturbed, and they count on not being challenged. I believe that many OSHA inspectors, faced with an uncommon machine, tend to make quick, incorrect assumptions about unusual equipment, and they count on an employer not questioning them because of fear of retaliation. Whether OSHA would retaliate or not, the fear is real. I know pallet company owners and managers are afraid of retaliation because they have told me many times.”
–Ron Waechter, founder of Smart Products, August 2003
2004
Higher Costs of Plastic Pallets
“You’ve got $25 worth of resin in a pile on the floor before you even build a pallet. Your materials cost $25. the plastic pallet, as long as it’s engineered to the specifications that are identical to the wooden pallet, is going to cost more.”
–David Mezzanotte, president of CHEP USA, June 2004
2006
Recyclers Unite to Form PALNET
The PALNET network allows regional recyclers to service national accounts and stay in the hunt for cores coming from major retailers.
“The industry has been changing. More and more retailers are becoming national players. Pallet cores are going to recyclers that can service national accounts.”
–Michael Smith, the COO of PALNET, Feb 2006
iGPS Launches 100% Plastic Pallet Pool
“Manufacturers and retail distributors are both looking for an alternative to CHEP. Somebody who is well-funded, knows how to run a pool and can offer an alternative. Not just plastic versus wood, but simply an alternative to CHEP even if it is a well-funded wooden pool. PECO might have been able to do it if they could have bought enough pallets.
The way that one retailer put it to me is that ‘We want somebody to break up this monopoly.’”
–Bob Moore, founder and CEO of iGPS, July 2006
Federal Judge Awards Mock $5 per Pallet, CHEP Decides Not to Appeal
“I’m not fighting this legal battle for the money,” said Ricky. “I was doing it for the industry and to stand up for what is right.”
–Ricky Mock, president of Mock Pallet, October 2006
A big part of the case was CHEP’s own internal documents and analysis that showed the value of return services could be much greater than what it offers recyclers through its ARP. According to internal CHEP analysis, collection and return of stray CHEP-marked pallets by recyclers could have a value to CHEP as high as $4.67 per pallet. In another valuation, this figure went much higher ($7.75 per pallet).
2007
Empty Trailers
“Operating a small or large fleet of trucks is nothing new to a pallet company, but many of them have not exploited their dispatchers to add profits and create business opportunities. When a pallet company is certified to haul freight, this allows them to truck other goods in addition to pallets. They can haul all kinds of freight, which gives a dispatcher more options to avoid costly running of empty trailers.”
–Clarence Leising, pallet machinery and recycling consultant, 2007
IFCO Immigration Raids
“It’s very fair to say that they put some of their competitors around the country out of business.” Along with taking advantage of what he called “throw away employees.”
–United States Attorney Glenn Suddaby, April 2007
“The senior management of IFCO was surprised by the determination, as a result of the government enforcement action on April 19, 2006, that more than 1,100 of our workers were not authorized to work in the United States. While every U.S. business, and especially decentralized ones like IFCO, must deal with the complexity of our nation’s employment and immigration policies, the company deeply regrets that it had even a single ineligible worker on its payroll.”
–IFCO Systems,
April 2007
Reverse Logistics
“Now customers are demanding more than pallet management; they want total reverse logistics management. Wal-Mart is opening nationwide reverse logistic centers in which a pallet provider has to manage all the recyclable returns from stores, which include white wood pallets, CHEP pallets, plastic pallets, RPCs, baled corrugated, stretch film and consumer bags.”
–Sam McAdow, president of Buckeye Diamond Logistics, June 2007
Mold and Pallets
“Mold growing on newly manufactured wood pallets is becoming less tolerated by many customers. Increasingly they are sending back trailer-loads of pallets that have mold growing on them and demanding mold-free pallets…The key components of a mold control program are: 1) reducing airborne spore density around the manufacturing facility, 2) reducing wood surface moisture levels to below 20% moisture content (average pallet part moisture content about 25%), and 3) maintaining low wood surface moisture levels.”
–Peter Hamner, research assistant with Va. Tech, August 2007
Global Hardwood Markets
“Globalization is the future of the hardwood industry. We still have a strong hardwood industry in this country. Even though it has come down a little from recent years, historically we have stayed at about the same level where we are now. Honestly, we expect to be at this level for years to come…We are not sending as much lumber to the furniture industry in North Carolina. We are now sending more to the furniture industry in China. We have had to adapt where to send lumber. If there is going to be growth in the future, it will have to come from those global markets.”
–Mark Barford, the executive director of the National Hardwood Lumber Association; September 2007
2008
Housing Impact on Domestic Wood Markets
“When housing turns around, then that is when the wooden products industry will make a recovery. Seventy five percent of the demand for structural wood products, which is mostly softwood, goes for residential construction. More and more of our hardwood products are going to the remodeling market – flooring, molding, millwork, furniture. Both the hardwood and softwood markets are trying to export more material. But that is asking an awful lot to have increased exports fill the gap.”
–Al Schuler, a research economist for the U.S. Forest Service, January 2008
California Issues Fines Against Underground Pallet Companies
“The pallet industry will be targeted for at least the next couple of years until we can get a handle on getting some proportion of that industry in compliance. Our experience from the first sweeps in the Bay area is that almost every pallet recycler we found was operating illegally except for a few notable exceptions. Generally, you get a vacant lot, set up a generator, and hire a bunch of guys off the street. Your entire overhead is based on that one generator, some small saws, one horizontal bandsaw and some nail guns. These operations can be very transitory, unlicensed and an extreme fire hazard. It is easy for these companies to come into compliance.”
–Robert Jones, the California Labor and Workforce Development Agency’s deputy secretary for policy and enforcement, April 2008
Surviving and Thriving During a Recession
“Be proactive in meeting and working with your accounts. Surviving in a recession is no secret. Most pallet people have been through it before. You need to work with accounts to get to know them so that you can have professional conversations. Reasonable requests and needs are more likely to be accepted by both sides if a good relationship has been built.”
–Tom Abbruzzese of AB’s Pallet,
July 2008
Industry Leaders Launch Block Pool Initiative
The Board of Directors of the National Wooden Pallet and Container Association (NWPCA) assigned a blue-ribbon task group to explore the concept of an industry-wide pallet management system uniquely tailored to the needs of the U.S. grocery market. This group has worked closely with representatives of the U.S. grocery industry to gauge customer interest and to iron out a few specifics.”
–Chaille Brindley, publisher of the Pallet Enterprise, August 2008
Sustainability Debate
“The sustainability of wood versus plastic comes out in favor of wood if you take some basic assumptions into account about carbon sequestration rates and the negative impact of using a non-renewal resource.”
–Judd Michael, associate professor of sustainable wood-based enterprises at Penn State University, November 2008
“The plastic pallet is about a third less in weight, which lowers the amount of fuel consumed to transport.”
–Gary Garkowski, vice president of marketing for iGPS, November 2008
2009
How Safe Is Deca Bromine Used in Some Plastic Pallets?
“There is growing evidence that PBDEs persist in the environment and accumulate in living organisms, as well as toxicological testing that indicates these chemicals may cause liver toxicity, thyroid toxicity, and neurodevelop mental toxicity… The mechanisms or pathways through which PBDEs get into the environment and humans are not known yet.”
–EPA, July 2009
“While over 1,000 tests over the course of many years have confirmed the safety of deca-bromine, we nonetheless commissioned independent laboratories to confirm its safety and suitability for our pallets. These tests showed conclusively that there is no detectable transfer of deca-bromine to foods—or even to food packaging—when shipped on an iGPS pallet.”
–iGPS, July 2009
Federal Officials Explore Domestic Wood Packaging Rule
“APHIS has no evidence that wood packaging is the cause of the domestic spread of pests, but our industry is supporting adoption of ISPM-15 because we believe that regulation of some kind is inevitable. It is already the case in 13 states. What our industry is trying to avoid is one set of rules for California and another for Illinois…one set of rules for the Emerald Ash Borer and another for the Asian Gypsy Moth. ISPM-15 has proven to be effective for a myriad of global pests and wood species.”
“We would support a national regulatory program consistent with the international program because the state-by-state, piecemeal approach that exists today, is confusing to pallet users and unfair to wood packaging companies in quarantined states.”
–Bruce Scholnick, president of the NWPCA, stated his support for a national treatment requirement while deflecting blame for the domestic spread of pests away from wood pallets, October 2009
National Wood Packaging Rule
“We would hope you just heat treat everything, make the playing field level, and have a relatively short implementation time. Everyone that I know that’s a major player in this industry already has the capacity. We have a couple heat treat chambers and we’re not using them as much as we would like.”
–Asher Tourison of Acme Pallet
“The launch of the international program was specifically predicated upon a significant increase in pest interceptions, and at this point that same increase has not been determined or presented for domestic wood packaging.”
–LeRoi Cochran of IFCO Systems
“That rule was not created by APHIS, but rather employed by the American Lumber Standard Committee, which manages the heat treating program. That requirement exceeds ISPM-15 guidelines, and needs to be modified. It is the biggest complaint in the recycling industry. The ISPM-15 domestic and international standard needs to allow U.S. manufacturers to comply with the same rules governing all other IPPC signatory countries.”
–Ryan Stearns with Atlas Products, LLC. of Nampa, Idaho
The Secret to Supply Chain Savings
“Shippers can save more money per unit load by reducing the costs associated with the plastic bottles and corrugated cartons than the wood pallet. Actually, the optimum designs in some cases require more or thicker deckboards to adequately allow for the total packaging redesign with the smallest total unit load cost. As long as each component is designed individually, this cost savings will never be realized.”
–Dr. Marshall S. White, pallet design expert and the former director of the Sardo Pallet Lab, November 2009
Underground Economy
“I don’t see these people hiring anyone. If they can’t do it themselves they just don’t do it…They don’t take many customers. They only have one or two or three customers at the most because they couldn’t support any more than that; but it’s enough for them to make a living and that’s all they’re interested in.”
–Fred Haman, president of Tampa Pallet in Tampa, Fla., speaking about shade tree operators who are quite common in his area and are mostly one-man operations, December 2009
2010
Pallet Stamp ID Theft Becoming A Real Concern
“Anyone who is not part of the official program and falsifies marks has committed a felony. Even though the individual in this case (a small grocery retailer in Texas) only paid an $8,000 fine, nobody wants a felony on their record.”
“In every case we know about, APHIS involvement has stopped illegal activity immediately. The good news is that the vast majority of companies appear to be following the program.”
–Tom Searles of the ALSC, March 2010
Costco Turns to Block Pallets
“Pallets not rented from iGPS, PECO, or CHEP must meet equivalent structural and performance standards, are not returned or exchanged, and must be pre-approved. We do not accept pallet exchange deliveries (we do not return or exchange pallets for the ones being delivered).”
–Costco Wholesale, October 2010 as the company announced that it would begin requiring block pallets as of January 1, 2011
Back to Basics: Recon Pallets – The Way to Make Money in Recycled Pallets
“There is a better way than just playing the old GMA game. Consider, recons as the last frontier to make money out of pallets.
“What is a recon? It is a pallet that is made from all used parts and new nails. From my experience, recon margins run between 20% and 40%. Sounds too good to be true? It’s all about the way you build and sell them.
“Here is one of the most important ideas to remember. Used pallets and recon pallets have one major thing in common ‘used’ lumber. As long as the pallet is level and solid, it does not matter whether or not it is a used pallet or a recon pallet. Mixing your used and recons will prove to be extremely profitable.”
–Clarence Leising, pallet recycling consultant, November 2010
2011
Europallet Turns 50
“Fifty years ago the railways looked for a way of making the carriage and storage of retail goods more efficient. Their solution was to design and construct a wooden block structure enabling retail goods to be kept together in loading units. This resulted in the birth of the ‘Europallet.”
–UIC’s Freight Director Oliver Sellnick, July 2011
“The current size and specification is so entrenched in mainland Europe that it will never be changed. Had it been 1200 x 1000 based it would have been easier to introduce into the United States.”
–Stan Bowes, former president of EPAL, July 2011
