Market Update: Summer 2024

There are a number of factors in today's economy that are impacting the pallet industry. Regional Director of Supply Chain for the West Marcus Blood shares what those factors are, and how they are directly influencing the pallet market right now.

What's influencing the recycled pallet industry right now?

We think about the holidays being in the fall, but really a lot of that product in the supply chain starts moving into ports and into production in the middle of July. And so we're kind of on that cusp of spring, getting things sparked and moving and waiting for what's going to happen with the holiday season to come around. Now, I think one of the biggest positives we have in the year is most of the surplus products for the holidays was used up last year.

We know that retailers are going to need to move some supply chain products this fall going into the holiday season because the surpluses that have been there for the last couple of years just aren't. So that's a positive thing, but the challenge is kind of the timing of all that, right? Is that going to start with the typical spring push in May, or is it going to wait until July? And I think that makes it challenging to wake up each day and know which way to really focus.

What is on the horizon?  

Well, there's a lot of similar factors to things that we've seen over the last 15, 20 years. There's just uniqueness to this that comes behind one of the most unique times in history with the pandemic, but there's also labor challenges. There's a lot of automation taking place in our industry as well as the customers that we serve that changes the need for pallets.

And then there's a lot of uncertainty throughout our economy with an election coming up with interest rates that are higher than we've seen in about 30 plus years that affect not only our mortgage rates, but our credit card spending and different things that affect how consumers are spending their money.

How has the use of automation impacted the pallet industry? 

Automation is probably really one of the most exciting things, not only in our industry, but in the country at the moment. And we've really had a labor challenge for the last four or five, 10 years maybe. But as we look in the industry, the ability to not only repair more pallets more efficiently in less time by having that automation, but what it means for our employees, the safety aspect of not having to pick up pallets and move 'em the way we used to manually, and having an automated line that moves it down and makes it much safer for our employees to handle those pallets and move 'em.

It also gives us different inspection processes, different ways to track the pallets back to the repair station. That is a benefit to our customers from a quality control standpoint and our ability to trace those pallets we're now getting with our customers on the floor in their dcs and helping them find value in how they handle the pallets for them to be more efficient. And to me, that's the exciting part of this industry, to go out and not just buy and sell a pallet, but to go out and help our customers solve their problem as they implement new processes and new automation.

And I think, again, coming back to 48forty, I don't think there's anybody out there that's got the background that our team does to go in and help a customer with that automation and adapt to what they're doing and get them the right pallet for what they're trying to do.

For more market insights, contact our national sales team via our website.