Lindsey Shean-Snowden is national accounts manager for Valley Pallet, which is made up of 12 company-owned facilities with coverage stretching over half of the United States. Valley Pallet offers a broad range of wood and packaging products and solutions, including standard and custom pallets. The company supplies new and recycled pallets and crates, and it provides pallet management programs and clean-up and removal services.
Pallet Enterprise: What kind of challenges are pallet companies currently facing in the West?
Shean-Snowden: Lumber and cores. These are the biggest challenges right now, the lack of lumber and a shortage of cores. I think the shortage of cores is going to increase. Everybody is fighting for pallets.
Lumber is a capacity issue. There’s been a huge demand for lumber for construction and do-it-yourself projects during the pandemic. It’s really been unprecedented, and it’s eaten up a lot of the supply in the marketplace. There’s little supply at the moment.
Pallet Enterprise: How is Valley Pallet responding to those challenges?
Shean-Snowden: As far as lumber, just based on Random Lengths, we’ve seen a 92% increase in the cost of material since November. That’s not something we can absorb. We’ve gone to customers and passed along the price increases in lumber. We’re also being cautious about the volume we can handle. We’re not taking on new business unless we’re confident we can get the lumber. We’re just trying to take care of existing business and pass along the price increase.
To stay adequately supplied with cores, we are aggressively targeting new supply accounts and raising prices there as well. Cores are in very high demand. We’re seeing price increases of 30% for cores. We’re trying to be as competitive as we can, and we’re passing on that price increase to our customers. The market is bearing the price increase. We have to pay more for cores, so we have to charge more for recycled pallets.
Pallet Enterprise: Do you have a peak season when demand for pallets is at its highest? Do you have to add temporary workers during peak season? How do you go about attracting and recruiting them?
Shean-Snowden: We have plants in California and Arizona. Our peak season in California is April-October. In Arizona it is November-April. Typically, we don’t try to add workers. What we’ve really tried to do is build up our workforce. If things get a little slower, we try to find productive positions in the plant so we don’t lay off people. We’re also focused on adding year-around business so we’re able to keep a full crew and keep them productive.
Pallet Enterprise: What is your biggest challenge: finding and recruiting new workers, or retaining workers?
Shean-Snowden: A little bit of both. Finding new workers and recruiting definitely is a challenge. A lot of it is competition. We’re competing against food processing plants that pay starting pages of $17-18 per hour. It’s hard to attract workers based on wages and the type of work that we do. It’s hard work. That’s been a big challenge.
Retaining workers is a challenge as well. We try to create an enjoyable work environment and provide the benefits possible to our employees. That seems to have helped quite a bit. We want to make sure we’re taking care of everybody.
Pallet Enterprise: Gasoline and diesel prices have been rising steadily in recent months. Has Valley Pallet passed along that rising cost to customers or are you ‘eating’ it?
Shean-Snowden: We’re not passing it along yet. In the past we have instituted a fuel surcharge. If prices reach a certain threshold, we will have to institute it again. I have a feeling going into spring we will have to institute a fuel surcharge.
As I talk to customers every day, everybody else is in the same boat. Everybody is raising prices. It’s not as daunting to go to a customer to tell them I have to raise prices 15% because everybody seems to be in the same boat. We’re just doing everything we can to maintain margins, so we’ll be passing along rising costs. Customers can plan on that.
