As our cover indicates, this issue marks the 25th anniversary of the Pallet Enterprise. To celebrate the growth and maturity of the industry, the Enterprise staff has compiled a historical timeline of the industry, noting important people, companies, events and trends. Through the years, the industry has undergone significant change, and the pallet is as important as ever to the success of the global supply chain.
The faces that led the industry have changed several times. Many machinery manufacturers have come and gone. The entire pallet recycling industry and its supplier base have risen in prominence. The pallet services/management arena is in its growth stage.
No important or milestone event was intentionally overlooked, but time restricted us to examine primarily articles, not every news release and advertisement.
Many of the moments covered in the following timeline are detailed in a new commemorative electronic disc developed as part of the Enterprise’s 25th Anniversary. You can find out more about this project on page 22.
Industrial Reporting, Inc., publisher of the Enterprise, started serving the pallet industry with our new Wooden Pallet Index in April 1977. In September 1992 the Index changed its name to the Pallet Profile Weekly, which continues today as the weekly news and market newsletter for the wooden pallet industry.
The Early Years
1981…Brunswick Box was the first company ever featured on the cover of the Pallet Enterprise. It remains in business today and is still owned by the Lucy family.
1982…The second issue of the Enterprise featured an article on the NWPCA’s new logo-marked pallet program. The association was trying to market a quality pallet program in the deepest recession since the Great Depression. While it marked a step in the right direction by our industry, the program eventually dwindled.
1984…Emergence of pallet recycling – Enterprise covered pallet recycling operations and related machinery for the first time.
1985…The Pallet Design System (PDS) was introduced by the NWPCA and Virginia Tech. Since then PDS has developed as the premier computer tool for designing pallets. The original program has been upgraded over the years to include block pallets, panel deck pallets, and will soon include repaired/recycled pallets.
Woodmizer was the first company to advertise a portable, bandsaw mill in the Pallet Enterprise. This ad appeared in the May/June 1985 issue. Since then, Woodmizer has become the largest supplier of portable sawmills in the world.
1986…First Interpal, international pallet meeting, was held in Germany. Enterprise had its first international issue with features on a Canadian partnership and a Swiss pallet manufacturer.
The Enterprise covered alternative pallet and box materials for the first time and introduced the facts surrounding the automotive industry’s switch from wooden pallets and corrugated boxes to returnable plastic containers.
Viking’s first champion system introduced the “one man pallet plant” concept. Viking claimed that the system would produce one pallet per minute with only one operator. It filled a void between hand nailing and tandem high speed systems of Viking and Campbell.
1988…MidContinent Nail entered the bulk pallet nail business with its Malden, Mo. plant, making it the only nail manufacturer dedicated solely to bulk pallet nails.
1989…Enterprise carried its first comprehensive report on pallet management, including articles on the Canadian Pallet Council system, CHEP, National Pallet Leasing, and an overview on pallet pooling.
The May/June issue featured thin-kerf sawing in its infancy. We introduced the Baker Band Resaw and reported on the Viking Pallet Master and Waechter resaw systems.
1990s — Boom Time for Recycling, Industry Growth & Transition
1990…CHEP moved into the U.S. pallet market. CHEP began promoting benefits of pallet rental to end users.
The grocery industry made its so-called “pallet problem” public. The NWPCA took an active role defending the wooden pallet in this important arena. Sam Caufield, formerly of Procter and Gamble, stated that the grocery industry pallet subcommittee had concluded that the current GMA pallet is not much of a pallet and the system is not much of a system.
First National Pallet Rental announced its intentions to establish a pallet rental pool.
The International Association of Pallet Recyclers (IAPR) was formed at a recyclers meeting in Cleveland, Oh. This association was later absorbed by the NWPCA.
1992…The grocery industry sub-committee recommended adopting a 48×40 full four-way block style pallet. The industry was making it increasingly clear that it would rather rent pallets and let somebody else have the headaches associated with ownership. This development caused great concern and set the stage for CHEP and possibly others to set up pallet rental networks, particularly using block pallets.
The first Pallet Summit in Memphis was probably the single most exciting pallet meeting ever held. Attendees rallied around their concern about CHEP and its emerging pallet rental system.
Enterprise featured the relatively new concept of coloring ground pallet fiber to make colored mulch. This developed into a good value-added wood fiber market that is served by many companies today.
The NWPCA developed new pallet repair categories. In spite of good intentions, it has proven very difficult to bring standards or quality control into pallet recycling. The IAPR and NWPCA continued to fight over the leadership role in pallet recycling.
GBN Machine & Engineering developed a new block pallet jig to adapt existing machines. GBN’s design made is easier for companies to produce both block and stringer style pallets on the same machine with limited changeover time required.
1993…Palletgate, a pallet fraud scam, hit our industry from out of nowhere. Scam artists were buying but never paying for pallets, usually used 48x40s, and selling them to others (usually other pallet companies) at an attractive price. The thieves quickly moved on to avoid detection and apprehension. The Enterprise worked in conjunction with the International Association of Pallet Recyclers to help the FBI bring an end to this scam, and at least one of the perpetrators went to jail.
Industrial Reporting, publisher of the Enterprise and Pallet Profile Weekly, produced its first pallet recycling study. One of the biggest indicators of change was the approximately 20% growth rate of pallet recycling, which repeated itself throughout several more surveys during the 1990s.
PRANA (Pallet Recycling Associates of North America) was started to purchase successful pallet recyclers and form them into a service related network.
1994…The NWPCA announced a new program to help close the loop for produce pallets – the guaranteed pallet buy-back program. It never reached any degree of success.
PMSI was the first U.S. pallet company to go public when it was listed on the NASDAQ exchange in 1994. Its goal was to become a dominant nationwide player in the U.S. pallet market.
1996…The Home Depot announced a shift from pallets to slipsheets to save money, increase efficiency and by-pass pallet management systems. As many of us expected, this move did not work as well as The Home Depot had hoped, but it signaled the growing unrest with wooden pallets by some major users. Eventually, The Home Depot switched back to pallets.
A move to change the name of the National Wooden Pallet and Container Association to ‘The Pallet Association’ brought a round of protests that association leaders had not expected. Although the Board of Directors had already approved it, a small number of determined members were successful in rallying others to defeat the name change idea, at least for the time being.
A quota was placed on Canadian softwood lumber entering the U.S. The five year quota program was not well received by the pallet industry.
Pallet Pallet announced its Pallet Banking program, where equivalent pallets were traded around the country just like similar money is exchanged. Pallet Pallet later folded, but PalletBanking was an idea that some thought had merit.
The Center for Unit Load Design was established to complement the Sardo Pallet Lab at Virginia Tech. The Center studies the interaction between material handling equipment, packaging, and the pallet or container.
Rumors persisted that the Canadian Pallet Council (CPC) would come to the U.S. Later the CPC announced that it did not have the resources to enter the U.S. market.
1997…PalEx, a publicly traded pallet company, was developed as one the first major industry consolidation efforts. It later spawned Pallet One and the pallet services division of IFCO Systems. The merger of Ridge Pallets, Fraser Industries, and Interstate Pallets was the foundation of this company.
PECO, formed by over two dozen established pallet companies, started developing a pallet rental program with a focus on the grocery industry. It is one of the few companies, besides CHEP, to make the model work in the U.S. grocery industry.
The NWPCA launched the new CPR program for certified pallet repairs and later decided to establish a CPR licensing program. The Pallet Lab released preliminary test results showing that splicing can restore bending strength in stringers.
The NWPCA celebrated its 50th anniversary, and the CWPCA celebrated its 30th anniversary.
1998…The Wall Street Journal article was no April Fools’ Day joke. Published on April 1, the headline read, “Hitting the Skids – As Old Pallets Pile Up, Critics Hammer Them As a New Eco-Menace.” In spite of conversations with industry leaders that lasted literally hours, Daniel Machalaba wrote an absurd account of wooden pallets. He stated, “They can deliver the goods, but they clog landfills and gobble up trees.” Our industry was outraged, and many readers wrote the paper to object.
Returnable Produce Containers (RPCs) started to be accepted in the produce industry. Wal-Mart became the driving force behind this concept.
After the NWPCA name change issue a few year earlier , a concern arose when the board moved to change the by-laws to drop the statement, “The purposes of this association shall be to promote the general welfare of the wooden pallet and container industries…”
1999…CHEP began heavy handed tactics against recyclers. Police raided Atlas Pallet in San Antonio due to concern over ‘stolen pallets.’ Edgar Lozano fought to clear his name and show that CHEP was the one engaging in underhanded practices. This legal battle began the fight between recyclers and CHEP over the ownership and return of stray proprietary pallets.
On-line pallet auctions caused a controversial stir. Beginning with Quaker Oats, Free Markets began helping large companies buy pallets via the Internet. Bids for pallet supply contracts were submitted on-line. Many pallet people believed there was no real margin to reduce pallet prices further.
Bruce Peterson, vice president of perishables for Wal-Mart, began touting the benefits of RFID (radio frequency identification). He believed that RFID would change the dynamics of unit load movement when the tag cost comes down.
2000s – Challenging Markets,
Global Customers
2000…Bruce Scholnick was chosen as the new NWPCA president. David Sweitzer replaced Earl Pennington as executive vice president of the Western Pallet Association.
2001…Congress rolled back the new ergonomics rules that President Clinton had rushed out just before leaving office. Thus the industry did not have to comply with unneeded, burdensome regulations.
Dr. Mark White of the Pallet Lab released the results of an e-tailing study that suggests retailing methods of the future, including shopping via the Internet, will require increased unitization of products and pallet use. The industry had been concerned that e-tailing might reduce palletization, but that does not appear to be true.
Pest risks associated with international shipping containers and pallets became the hottest issue of the year. The Enterprise carried the first comprehensive article about the growing phytosanitary concern and the EU emergency standard for softwood packaging. The issue went beyond Europe and softwood packaging. It became the hot button issue for the next five years.
Buckeye Recyclers in Ohio brought a lawsuit against CHEP. The suit focused on the issues of pallet ownership and reimbursing recyclers for expenses related to retrieving CHEP pallets.
The five-year quota system on Canadian lumber imported into the U.S. expired in March, and the U.S. Commerce Department placed a 19.3% duty on Canadian lumber effective in May and a 12.6% antidumping duty effective in November. While pallet kits of pallet cut stock were not covered by these two duties, they had an undesirable effect on our industry, according to many pallet companies.
Fire marshals, insurance companies and pallet customers began looking at the implications of plastic pallets and fire hazards in warehouses. The issue eventually died down as most companies decided to upgrade sprinkler systems instead of invest in expensive fire-rated pallets.
2002…Increased computerization hit the pallet repair industry. Suppliers began developing pallet management software for businesses.
CHEP began Asset Recovery Program (ARP) to compensate recyclers for costs associated with the return of stray CHEP-marked pallets. Many recyclers signed onto the program. Others balked at provisions and got changes to the ARP.
International governments developed ISPM-15 as a voluntary standard to reduce pest risks associated with solid wood packaging. Acceptable treatment methods included heat treatment and fumigation with methyl bromide.
2003…Barcode tracking became more common in pallets plants as companies monitored employee performance and managed inventory using scanners and computer software.
Cargo security and anti-terrorism measures arose as concern for global shipping. New laws targeted ports and cargo shipments.
CHEP began touting its white wood supply to gain influence over the recycle market.
Bandsaw safety became a major issue as some OSHA inspectors tried to require brakes or other safety measures not called for by OSHA standards. Suppliers and the industry reacted as OSHA backed down.
Heat treatment began to gain steam in the United States as international governments talked about enacting the ISPM-15 standard for solid wood packaging.
Ohio judge sided with CHEP on the ownership of stray rental pallets in the Buckeye Diamond Logistics case. The court sided with CHEP on all counts except for unjust enrichment. This marked a change in strategy as unjust enrichment not the ownership issue became the focus in legal battles.
RFID became a hot topic as Wal-Mart began telling suppliers that they would be required to put RFID tags on products shipped to the retailer’s distribution centers and stores. The Department of Defense launched a major new RFID program as well. RFID became the logistics buzzword for the next few years.
2004…Mock Pallet won jury trial in CHEP case. A jury gave the Georgia recycler approximately $19.47 per pallet for fees associated with safeguarding and returning stray rental pallets. The jury award was eventually overturned on appeal.
IFCO Systems underwent restructuring and refocused its efforts on serving national level pallet service accounts. The country’s largest recycler began an aggressive campaign to court major retailers and product manufacturers.
NWPCA entered into safety alliance with OSHA and NIOSH. NWPCA revamped its safety program with expertise of safety lawyer.
With growth of the forest products industry worldwide and rising domestic costs, pallet companies began importing South American lumber.
2005…Pallet recyclers reported thefts of pallet trailers becoming common as the core supply tightened. The Chicago market appeared to be the main hotspot.
A number of successful regional recyclers joined forces to develop a national service provider called PALNET.
Steve Mazza of S&B Pallet talked to industry leaders about his program to create private rental agreements for customers. He encouraged recyclers to develop their own networks to compete in the pallet rental arena.
CHEP began setting up a white wood network where regional partners handled the distribution of cores coming
from CHEP’s Total Pallet Management program.
Buckeye Diamond Logistics settled lawsuit with CHEP. CHEP added a fuel surcharge to its ARP. Fuel costs began to soar as the industry tried to push for price increases.
Experts touted lean manufacturing as a way for the industry to increase productivity.
Rehrig Pacific, a major manufacturer of plastic pallets and containers entered the pallet services arena. Rehrig Penn became a pallet cooperative serving major retailers, especially Wal-Mart.
2006…High fuel costs raised interest in wood pellets. Some companies looked at pellets as another byproduct from wood waste.
Europe agreed to delay a bark free requirement for solid wood packaging materials until 2009. Industry and scientists discussed need and economic reality of removing bark to reduce phytosanitary risk.
Illegal foreign worker issue put the pallet recycling industry on the frontpage of major newspapers. Federal authorities raided IFCO Systems locations throughout the country in the largest worksite enforcement action in U.S. history. Pallet industry responded to government crackdown on unauthorized workers.
Former CHEP CEO launched 100% plastic pallet pool to compete in pallet rental arena.
Pallet Scams – Tight core market paved way for scammer to con pallet recyclers and trucking firms in the Midwest, East Coast and Southeast out of thousands of dollars in pallets and fees.
Small timber became a bigger deal as companies looked for ways to improve utilization of small logs.
In a second trial, Federal Judge Beverly Martin awarded Mock Pallet Co. $5 per pallet for returning stray CHEP-marked pallets. CHEP decided not to appeal the decision. The case marked the first time that a recycler went up against CHEP in court and won.
Dr. Mark White announced his retirement from the Center for Unit Load Design and began a career as a consultant.
