Interested in factors impacting the pallet market right now, what’s to come in 2022, and how businesses can adjust? Watch our latest market update with Marcus Blood, Regional Director of Supply Chain for the West.
Marcus Blood is the Regional Director for Supply Chain in the West, and has been with 48forty for almost 14 years. He’s managed one of our facilities as well as worked within the supply chain in our brokerage group.
What’s impacting the pallet industry right now?
We had talked in August and September that we thought maybe there was going to be some stabilization in the fall, and that maybe we would kind of see the new normal. I think what we’re finding is we haven’t reached that yet. What we thought we would see in the industry in November and December just simply hasn’t happened yet. There’s still more demand for pallets than there are pallets available. It’s softened a little bit, but you know, we just finished Black Friday, which is typically a big flush-out of pallets from retailers. We didn’t see what we would normally see in a normal year. That’s the second year in a row that the flush of pallets in the recycled market just hasn’t happened.
We see every day on the news some sort of a story about supply chain. And as I mentioned, there’s still a lot of manufacturers that are still trying to catch up from the downtime a year and a half ago when everybody was shut down. They’ve never been able to get caught up and their feet back under them.
Labor is a big issue. As people are trying to catch up, we hear all over, everywhere we go, we see signs, now hiring. We were talking to everybody, whether it’s a customer, whether it’s a vendor, whether it’s a partner, whether it’s a competitor, is struggling to find labor. So as everybody’s trying to catch up from the downtimes at the beginning of the pandemic, but fighting to get labor, that’s creating another challenge that is simply one that the only real solution is automation, and that doesn’t happen overnight.
What are you watching for 2022?
The biggest components of what’s going to happen over the coming six to 12 months, as I mentioned earlier, is labor. There’s pretty well nowhere you can go currently that you’re not seeing now hiring signs or talking to someone that’s struggling to fill the gap with their production force. You know, there’s a lot of factors to that. Besides everything pandemic-related, there’s a lot of companies that have been growing and expanding through this, that have started up new facilities and are hiring new employees.
As we look at that, you know, that impacts us, you know, repairing pallets. It puts us looking where we can try to become more efficient with automation, but that all takes some time. That’s going to impact the industry going into 2022 from multiple directions.
My advice would be pay attention to those things that are somewhat anomalies still, that are not the norm, that are going to affect everything in the supply chain. Again, to me, the drought that we’re experiencing in the west and how that’s going to impact agricultural-type things over the next six to 12 months, that’s going to play into the supply chain. It’s going to affect how many pallets are used for ag, how much transportation is needed for ag, and it’s an answer we don't know yet.
How can businesses adjust to current market challenges?
Forecasting and looking at the versatility of all the different pallets that might be available is probably the best thing that our customers can do. And communicate that with us. Sit down with the local manager or the salesperson that represents 48forty for that customer. Have those discussions. Ask what options are available. Be familiar. Be educated on what the options are. And then share as much insight as you can. We realize that not everybody can tell us what they’re going to be doing four months out, but there’s some seasonality to a lot of our customers, and the most information that you can share with us gives us the best ammunition to be prepared and to help.