For the past several years, the supply of pallets has been squeezed and many pallet suppliers have not been able to keep up with current demand. So why are pallets in shorter supply?
Let’s examine some of the reasons. The economic downturn of 2008 affected the entire economy, and pallet manufacturers were not spared in this respect. Due to macroeconomic challenges and lessening demand for consumer goods, the pallet supply was whittled down. Then, as the economy recovered, new pressures, such as increased consumer demand in China, funneled lumber out to the export market and away from the domestic forest products industry.
An increasingly painful lack of core supplies in the white-wood pallet pool (new pallets) has also created problems in the recycled pallet industry. This was made even worse by the uptick in pallet buyers moving away from the new pallet market because of higher prices. Customers have been moving back and forth between new and recycled pallet markets attempting to lower their costs. This can lessen demand for one or the other, but it doesn’t address the real problem which is tightened supply. Even sawmills have changed their sawing practices, modernizing their mills to increase capacity and output.
Presently, prices in the low-grade hardwood market are steady overall, so pallet prices also remain steady, but there is tough competition for cores in the recycled market. Recyclers must pay more just to keep their supply lines going. Prices of cores trended upward for most of this year. This does not look like it will be changing anytime soon.
Pallet manufacturers must remain active and attentive in this market to continue to supply customers with pallets at any given time. At Kamps, we prioritize maintaining supplies of pallets at all times and offer pallet management with great customer service at competitive prices.
