Last year was a busy one for the pallet and forest product industries. It saw the launch of the first industry cooperative white-wood pool, rising costs, new regulations and a shortage of pallet cores. Through it all, the Pallet Enterprise staff worked to provide comprehensive news coverage by speaking with industry members across the country.
Reviewing some of the best quotes from our coverage of 2012 provides a snapshot of some of the industry’s biggest news, trends and market changes that occurred while offering insights into how they were viewed by industry members.
One of the biggest news items in the industry was the official launch of the first industry led white-wood pool – 9BLOC. The program has received a lot of support from various members of the industry, for various reasons.
“Many pallet users don’t want to sign up with CHEP, PECO or iGPS. They are looking for another option, and are waiting for alternatives to be viable. The 9BLOC pallet network answers this market opportunity.”
— Steve Mazza, Bett-A-Way Pallet Systems
“Supporting 9BLOC is the right thing to do for our industry. I know there have been skeptics out there. But if anything is ever going to take off and create value for the industry, 9BLOC is it. Once it gets going, it will take off faster than people expect.”
— Mark Hoffman, president and owner of Larson Pallet & Crating
Many pallet companies had some struggles this year with the availability of raw materials and pallet cores and rising costs. Despite this, many pallet customers do not seem to realize what a good deal they are getting.
The availability of used pallets is very close, very tight. They just don’t seem to be out there. We’re scratching every day to try to keep our customers satisfied. For lumber, we’re lucky enough to have a mill or two close by that’s doing a good job for us now. But that could change very quickly, depending on what the lumber market does.”
— Frank Hall, chairman, Hallwood Enterprises
“A hardwood GMA pallet sells delivered today for about $8.75 to $9.25 in most places, a little more than double the 5/8” decking pallet in 1977. While a GMA specification has changed quite a bit, we are comparing a lighter weight pallet then that compared pretty closely with today’s GMA. Look at cant costs. They have increased from about $120 – $150 nationwide then to $350 or more in most regions today. They have almost tripled in cost while pallets have only doubled during the same period. Your customers are getting a bargain today. How many other things have held down their costs as well? Very few – that’s how many!”
— Ed Brindley, founder of Pallet Enterprise
With the recovery of the U.S. economy remaining sluggish, the forest products industry has been looking to foreign markets for quite a while. The housing boom in China has been a bright spot, and even though it has slowed and there is now a surplus of housing, experts do not think that the country’s government is done building.
“This idea that there is a massive amount of surplus housing in China and that they are not going to build more for the next five years is not accurate. It doesn’t work that way in China. Over supply may sit there and never be occupied. But that isn’t going to stop them from ordering the state banks to start making loans and begin building things again. China is not a free market economy, and you can’t analyze it as if it were.”
— Bob Flynn, director of international timber, RISI
Everyone loves new regulations, and there are always more on the way. This year, the expected changes include an Injury and Illness Prevention Program (I2P2) requirement from OSHA. It may be similar to the one in California, which has added training requirements and boosted potential fines. Though the exact details aren’t known, experts have some ideas about what it will include.
“I2P2 in essence requires you to go through your entire workplace, analyze and evaluate it for every possible risk and hazard, and then develop procedures on how you are eliminating or mitigating those hazards. It could be personal protective equipment. It could be improved ventilation systems or getting rid of one type of equipment or chemical substance for another. I2P2 is like a supercharged general duty clause that will cover things that OSHA hasn’t even written rules for yet. It will cover things like ergonomics.”
— Adele Abrams, safety lawyer who also runs the National Wooden Pallet & Container Association
(NWPCA) safety program.
The supply chain has changed a lot since the pallet was first introduced. And as usual, in 2012 members of the pallet industry were focused on innovation and preparing for future changes in customer demand.
“We believe the unit load concept is the future for our industry. As our customers reduce their purchasing staffs, they prefer a single source that can help them reduce their costs. We can be that single source for film, equipment, pallets and other industrial packaging products and equipment.”
— Ron Ringness, executive vice president and partner for Millwood Inc.
Even in this technological age when many people do their shopping online, the simple pallet plays a vital role in the supply. And as one industry consultant explained, no matter what changes come, the pallet industry will continue to fill that role.
“Let’s look at Amazon. Except for the non-conveyable products, the majority of items that Amazon ships come off a pallet that is stored in its warehouse…The pallet has had one less move. But the pallet is still going to have the same existence. You are still going to need that pallet for storage in the warehouse. You are not going to move that pallet out of the supply chain until the last item is sold. An increase in online retail is not going to have a big impact on the total number of pallets required.”
— Jim Tompkins, supply chain and logistics consultant, Tompkins International
