As a benefit for our readers of the Pallet Profile Weekly, we recently wrote a White Paper entitled “Lumber Crunch – What Is Happening in the Softwood and Hardwood Cant Worlds?” Any reader who would like a free copy of this white paper can get one by subscribing to the Pallet Profile. The purpose of this white paper is to assist pallet suppliers in explaining to their customers the current constraints, market pressures and issues as hardwood availability has been stressed this fall. Unlike the Pallet Profile itself, this white paper is available for a free distribution by subscribers without any concern over copyright issues. A copy of this white paper is available for free distribution within your company and to third parties and customers.
The wooden pallet industry is generally busy. While it is entirely possible that the pallet industry could experience one of its most active markets ever, if a tight lumber supply situation develops this winter and coming spring seasons, don’t be surprised if lumber supply situations hit critical levels.
The crunch on lumber supplies is due to a number of factors, including competing industries, pressure from Asian exports on raw materials, low log inventories, surging demand for softwood due to the rebuilding efforts after recent storms in Florida and Texas, logistics and trucking challenges, a difficulty finding markets for wood waste and residuals, and an overall reduction in sawmill capacities. These and other factors are creating the environment to create a “Perfect Storm Scenario” as one major pallet manufacturer recently described it.
The fall is a time of the year when many companies tend to accumulate inventories on hand. While log supply shortages vary from one area to another and the details causing these shortages differ across the country, the bottom line is that log supplies are growing tighter, and sawmills are having log deficiencies. In the West, forest fires are raging causing some of the shortest log supplies ever seen out there. There will probably always be wood out there. The biggest question is not so much supply as it is what you have to pay to get it.
Switching from hardwood pallets to softwood pallets or used pallets may not be an easy option for many situations due to strong demand for softwood combined with a lack of supply of quality #1 grade used pallets on the market.
Any company that uses pallets in any quantity should be aware that a tight lumber supply issue seems to be on the horizon. So, don’t be surprised if your pallet suppliers have to raise their pallet prices soon. No industry can keep a lid on their product costs for too long when their raw material costs are going higher. And the biggest cost that the pallet industry has is lumber. For more information about our market products, the Pallet Profile Weekly and Recycle Record, call Rick Henretty at 804/550-0323 or email rick@palletprofile.com. He will be happy to sign you up for a subscription. When you sign up as a regular subscriber, you will receive a free copy of our Lumber Crunch white paper. Many Pallet Enterprise readers have enjoyed what our magazine has to offer. You will not be surprised to hear that many of our market report receivers feel that the Pallet Profile and Recycle Record are even more valuable sources of information than our free magazine.
