Wood pallets can be affected by:
• reductions in availability
• increased prices
• require full or partial redesigns
Each of these changes can present a challenge. However, they can potentially be turned into an opportunity for both the supplier and the customer.
When there is a lumber shortage it drastically changes how pallet producers set up their production schedules. Mills have to build just enough pallets to keep each customer going as they do not have the luxury to produce additional stock in advance of customer need. Lead times become longer and a mill’s ability to maintain a finished goods inventory becomes nearly impossible. It’s important to understand that during times of tight lumber supply the availability of new wood pallets will be limited.
Pallet lumber comes from logs and cants that other markets do not typically use (due to quality, grade, species, etc) and many times are a byproduct from other higher valued production. As overall lumber availability tightens, the supply of pallet lumber suffers. Many higher-grade markets will take some lower-grade material that normally would be destined for the pallet industry. Additionally, pallet manufacturers are forced to buy higher-grade lumber as there is not enough lower-grade material available. These additional pressures on the supply of pallet lumber will cause the cost of a wood pallet to increase.
When there is a lumber shortage, redesigning the pallet might be an excellent option that was overlooked in the past. Redesigns can be simple modifications to the current pallet design, a change in the wood species or an altogether complete redesign. Pallet redesigns can lower the cost of a pallet and reduce its weight. Redesigns can even result in additional unit load benefits including reduced product damage or a reduction in other complementing packaging costs.
Have you had an issue with a lumber shortage? Were you affected by availability, price change, or a redesign? Let us know by commenting below. We want to hear about your experience.
Post by: Jonathan Haynes, Sales Representative