The top five customer concerns about the current lumber shortage are:
Customers are asking, “Why are pallet prices going up so quickly?”
Pallet prices are rising due to three primary factors – inadequate log/lumber supply, increased demand from competing industries and increased freight costs. Not to mention that we are coming off one of the worst winters that we have seen in decades. Numerous negative influences on pallet pricing have all come together simultaneously and pallet pricing has had to increase in order to keep pace with the market.
Customers are asking, “Will the pallets be available?”
The answer is “yes”, but flexibility may be required. Due to the hardwood shortage, many pallet and crating manufacturers have begun to use softwood as an alternative material. Customers should be flexible and open minded about pallet and crate designs as well as the material used to manufacture these items. Even though softwood is in many cases a viable alternative to hardwood, it too is experiencing upward price pressures and tight supplies.
Customers are asking, “Will I need to permanently switch to an alternative product?”
Many alternatives have been offered over the years, but none have really threatened hardwood as becoming a new standard. Given the current hardwood lumber shortage, the alternative of softwood lumber has already become much more common. Other alternatives include plastic pallets, corrugated pallets, and composite pallets. In addition to alternative materials, companies are taking a serious look at reclaiming and reusing their pallets and packaging. As the costs for one-way wooden pallets continue to rise, many alternatives that were not viable in the past are now being considered.
Customers are asking, “How long will the lumber shortages last?”
The pallet industry has been in a tight supply situation for quite some time; however, much of it was masked. As the economy has improved over the last few years and the competition from other industries has increased, the hardwood supply shortages have arrived. Add a very harsh winter to the mix and all of the ingredients were in place for a “perfect storm”. There is no short-term solution to this problem. Given enough time, supplies will be increased and alternative materials will become more commonplace. Most forecasts predict that the current hardwood shortage will last into 2015.
Customers are asking, “What can be done to prevent supply issues?”
During this current lumber shortage, the best bet is to stick with your current supplier. If your current supplier cannot meet your demands, then finding a new supplier in this market will be tough. The key is to find a good supplier and work with them as a partner to make sure that each company’s needs are being met. Offer more lead time, be flexible with designs and materials and look into pallet recovery and reuse.
As a pallet customer, what are your top concerns about the lumber shortage? Let us know by commenting below.
Post by: Jonathan Haynes, Sales Representative