It is hard for me to believe that it has been thirty years since I published our first Pallet Enterprise issue at the end of 1981. Probably the most common overall theme of Chaille’s and my regular letters to our pallet industry friends has been the concept of “Change.” One way or the other change keeps taking place. Yet, we need to always keep an eye on the past because it is the most likely forecaster of the future. While change is a common theme, there is an old adage that “the more things change the more they stay the same.”
Several articles in our 30th anniversary issue look back to what we have published in past issues. Many readers indicate that they look forward to seeing what Chaille has to say every other month in his column and how he illustrates his point by changing his picture each time. Looking at his overview in this issue takes us back to major topics he has covered over the years and how Chaille illustrated them with a touch of humor.
We have reminisced through our pages over the past thirty years by pulling out many quotes and summaries of information that the Enterprise has carried. Perusing through this article will help readers remember how conditions in our industry have changed. I find myself wondering how we might have approached our circumstances and problems differently. Could the industry have taken a more proactive stance in the face of challenges?
The honest answer seems to be a resounding, “Yes, we have been more acted upon by change than leading it.” Occasionally, an event came along that concerned a few company owners. But it was difficult to rally the industry behind lasting change. More often than not we did not take any successful corrective action in the face of adversity.
From changing customer expectations to raw material and market challenges to false fears and marketing hype, the independent and competitive nature of pallet manufacturers and recyclers has made it difficult for collective industry action. While the industry has many well meaning people and companies in it, most are so busy running their own businesses that it is difficult to get involved in solutions that require cooperative actions.
The most exciting gathering of pallet people I can ever recall was the NWPCA meeting in Memphis in October 1992 back when CHEP was initially raising its face in our industry. Pallet company owners were restless; they were concerned about the uncertainty they could see coming around the corner. It appeared that leaders in our industry were prepared to take action and lead the troops into battle. I emphasize the word “appeared.” The energy generated in Memphis had a half-life of only a few days. It is fairly easy to get people excited in the moment; we need to rally the troops behind a program they can believe in for the long run.
Today our industry faces some very difficult conditions. Times are hard, and prospects for improvement are limited. Our whole country is concerned about the direction of tomorrow. The biggest issue our society faces is a lack of confidence; on every corner I run into people who are concerned about our future.
The sawmill industry has been going through a difficult recession, even more difficult than the pallet industry has experienced. Coastal Lumber is a good example of what happened to one of the biggest hardwood sawmill companies in the country. After a decrease in demand that saw it drop to well under half of its former size, Coastal was bought and changed into Eastern Hardwoods. Many pallet manufacturing and recycling companies are struggling as well. Brunswick Box in Virginia is an example of a long-established manufacturer that just closed its doors. Since I started working with the Virginia pallet industry in 1977, most of the Virginia area pallet companies that I knew at that time are now gone. While others have often taken their place, the point is we live in a constantly shifting landscape.
Two big problems are staring us in the face – the core shortage that has thrust itself onto the recycling industry and the block pallet shift that Costco has brought to the pallet using community. These two issues are really opposite sides of the same coin because they both relate to the shifts taking place in the materials handling world.
Whether or not we want to admit it, CHEP changed the pallet culture. Are we going to listen to our customers and respond to their challenges? One thing is for sure, if we don’t get serious about pulling together nobody else is going to do it for us. By manufacturing lighter weight 48×40 stringer pallets, the industry has permitted the stringer pool to deteriorate. Look at the comment on page 34 made in 1982 by Jo Anne Scott of Scott Pallet. She said, “I feel strongly that the industry is cutting its own throat, especially in warehouse pallets, by encouraging spec deterioration.” This seemed like a prophetic statement made decades ago. While it took a long time to fully be realized, its fulfillment has been devastating, especially to the recycled pallet market. Costco used to require a higher grade stringer pallet, but since it instituted its block pallet program at the beginning of this year, keeping decent stringer pallets in the pool has become that much more difficult to do. The core supply went from heavy just a couple of years ago to the tightest we have ever seen as we end the year.
Lighter weight pallets, Costco’s new block pallets, and a growth in pallet rental are interacting to change the pallet industry. If we are going to do anything about this combination of factors, we are going to have to pull together to present a more united pallet industry front. This includes working with your customers to encourage them to pay enough to obtain a better quality pallet. Read the article on the future of pallet design on page 50 to see how this can be achieved.
Preparing for the future may mean getting involved in the new industry cooperative pool being developed (www.plusolutions.org). Organizers have been putting on programs around the country helping educate the industry about the proposed system. It means being smarter about how we serve our customers with better pallets and more service. It is time we started pulling together to change our industry for the better.
Wood is still the king of pallets. The two pallet rental programs that dominate the rental scene (CHEP and PECO) are both made from wood, not from other materials such as plastics. The iGPS plastic pallet pool has been going through some tough times lately having just lost a major client in PepsiCo. iGPS is the only plastic alternative pool serving the greater U.S. supply chain. And if iGPS falters, which looks like a possibility, it could be years before another wood or plastic pool rises to challenge CHEP or PECO.
Now is the time for the general white wood industry to pull together. Thirty years from now, the wooden pallet will still be here. But that doesn’t mean your company will still have a place in the industry in 30 years if you haven’t been proactive about responding to these challenges. What are you waiting for? The future is now, get going!
