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Pallet Industry Report

Posted By Administration, Monday, January 19, 2015

Submitted by Amy Angellotti, Rose Pallet

Our account manager, David Sexauer, explores the wooden pallet shortage and its impact on the quality of pallets in circulation in an article he authored entitled, “Is This the State of Affairs?” Below is an excerpt from this pallet industry report:

Many pallet manufacturers and recyclers will tell you that the 90’s were their best overall years in business, though their numbers began to level off when the market became more equalized after enough consecutive years of whitewood, CHEP, and plastic competition. It wasn’t until the mid-2000’s that the real challenges to the industry occurred. During a “normal” pallet cycle, companies that primarily buy used or reconditioned pallets would bolster their inventories by purchasing new pallets during their high shipping season (October – December). This influx of pallets would help replenish the pool for the following year and give life to the recycling industry. As the economy took a turn for the worse, many companies skipped out on their annual splurge of buying new; instead, opting for more reconditioned pallets. The most severe case occurred in 2008 when virtually none of these companies bought new pallets relative to prior years. This skip in the cycle caused a ripple effect that depleted a pallet pool already feeling pressures.

In January 2011, Costco, one of the largest purchasers of new whitewood pallets in the United States, decided to forgo buying stringer pallets and elected to go with CHEP, the rental block-style pallet. Without the large quantities of new pallets to replenish the recycled market, the downward spiral of the pallet life-cycle worsened. In addition to Costco, many other companies sought out standard #1 and high-grade #2 pallets. This high demand and low supply became a recipe for disaster. In order to compensate, manufacturers were forced to keep pallet cores in the overall pool much longer than before and continually recondition these pallets as much as possible, which ultimately lowered the quality of #1’s and #2’s into something virtually recognizable.

Click the "Download file" below for a full copy of this article to learn how market conditions and the quality of pallets are slowly improving and what your company can do to help the process and, in turn, drive down costs.

Amy Angellotti, Director of Sales & Marketing and Co-Owner, has over 9 years of experience in the wooden pallet industry. She has dedicated her career to serving the pallet management needs of Fortune 100 and 500 companies, both at regional and national levels. Currently, she focuses on national growth, building relationships, and developing new accounts. Amy also assists in running day-to-day operations and works closely with the sales team. Amy holds a Bachelor’s degree from Eastern Illinois University. In her spare time, she enjoys spending time with family and friends, traveling, attending Chicago Blackhawks games, and painting.

David Sexauer, Account Manager, is a seasoned sales professional with experience in various industries including medical, education, and information technology. His primary focus is developing regional and national pallet management programs for his customers across the country. David enjoys interfacing with clients throughout the supply chain; this helps him to better understand challenges and effectively respond with the right solutions. During his free time, David participates in and follows various athletic events, plays piano, and recycles.

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Tags:  Costco  industry  market  pallet 

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