We've been here before, see after the jump.
From SupplyChainDive:
Industry group warns pallet prices up 400% amid shortage
Dive Brief:
- A lack of pallet availability and rising pallet prices add to the stress of already squeezed supply chains, the United Fresh Produce Association said in an emailed notice.
- Pallet costs are up 400%, according to the association, due to several factors, including high demand and rising lumber costs.
- Repositioning the pallets is also a challenge as trucking capacity is strained. Not enough trucks and drivers are available to move the pallets from one location to another, the group said.
Dive Insight:
An uptick in consumer spending and inventory restocking requires access to the equipment that forms the backbone of supply chains — from containers to chassis to pallets.
A variety of factors squeezed supply amid growing demand, which pushed pallet prices to record highs. In April, the Bureau of Labor Statistics' Producer Price Index reached its highest level on record....
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And some deep background from Cabinet Magazine, Winter 2013 via the amazing Gwern.net:
On the front lines of the pallet wars
There are approximately two billion wooden shipping pallets in the United States.1 They are in the holds of tractor-trailers, transporting Honey Nut Cheerios and oysters and penicillin and just about any other product you can think of: sweaters, copper wire, lab mice, and so on. They are piled up behind supermarkets, out back, near the loading dock. They are at construction sites, on sidewalks, in the trash, in your neighbor’s basement. They are stacked in warehouses and coursing their way through the bowels of factories.
The magic of these pallets is the magic of abstraction. Take any object you like, pile it onto a pallet, and it becomes, simply, a “unit load”—standardized, cubical, and ideally suited to being scooped up by the tines of a forklift. This allows your Cheerios and your oysters to be whisked through the supply chain with great efficiency; the gains are so impressive, in fact, that many experts consider the pallet to be the most important materials-handling innovation of the twentieth century. Studies have estimated that pallets consume 12 to 15 percent of all lumber produced in the US, more than any other industry except home construction.2
Some pallets also carry an aesthetic charge. It’s mostly about geometry: parallel lines and negative space, slats and air. There is also the appeal of the raw, unpainted wood, the cheapest stuff you can buy from a lumber mill—“bark and better,” it’s called. These facts have not escaped the notice of artists, architects, designers, or DIY enthusiasts. In 2003, the conceptual artist Stuart Keeler presented stacks of pallets in a gallery show, calling them “the elegant serving-platters of industry”; more recently, Thomas Hirschhorn featured a giant pallet construction as part of his Gramsci Monument. Etsy currently features dozens of items made from pallets, from window planters and chaise lounges to more idiosyncratic artifacts, such as a decorative teal crucifix mounted on a pallet. If shipping containers had their cultural moment a decade ago, pallets are having theirs now.
Since World War II, most of America’s pallet needs have been met by several thousand small and mid-sized businesses. These form the nucleus of not just an industry, but a sprawling, anarchic ecosystem—a world, really, complete with its own customs, language, and legends, with a political class, with its own media. This world is known as “whitewood.” There are approximately forty thousand citizens of whitewood, ranging from pallet pickers (who salvage pallets from the trash) to pallet recyclers (who repair broken pallets and make them whole) to pallet manufacturers, pallet consultants, pallet academics, pallet thieves, and pallet association presidents. Whitewood includes people who crisscross the country selling pallet repair machinery, preaching the gospel of tools such as the Rogers Un-Nailer.3
Not all pallets belong to the world of whitewood. The most important other category—and whitewood’s chief antagonist—is the blue pallet. These blues are not just a different color; they are also built differently, and play by different rules, and for the past twenty-five years, the conflict between blue and white has been the central theme in the political economy of American pallets. The person most identified with this conflict is a soft-spoken, middle-aged man from Kansas named Bob Moore. Currently embroiled in a legal battle over a pallet deal gone bad, Moore is a singular figure in the industry and a magnet for controversy. When not in federal court, he can sometimes be found piloting a Mooney Acclaim Type S airplane, which he prefers, when possible, to flying commercial. The Mooney is a good place to concentrate, one imagines. And it is important to concentrate when plotting the future of pallets.
• • •
The origin of the pallet is unknown. Rick LeBlanc and Stewart Richardson, co-authors of the indispensable Pallets: A North American Perspective, believe that an early prototype was used to aid in the stacking of wooden barrels in a warehouse in Louisbourg, Nova Scotia, in the mid-eighteenth century.4 But the story becomes more certain only in the early twentieth century, when a machine resembling a heavy-duty golf cart appeared on the American warehouse scene. It was called a “lift truck,” and it had a large iron spatula protruding from its front.
Various proto-pallets, or “skids,” were used in concert with these early lift trucks. Some of the skids were wooden; some were metal; some had little iron legs, which allowed clearance for the spatula. Eventually, the iron legs faded into history—too extravagant—and were replaced by a pair of wooden support beams, called “stringers,” which gave the skid about six inches of height. Then the spatula mutated into a two-tined fork, and the skid, responding in kind, grew a third stringer along its dorsal spine. Around 1925, the skid gained a set of bottom deck boards, below the three stringers, and with this, the pallet had achieved its modern form. Functionally, this new bottom deck stabilized the pallet, which prevented stacks of goods from crashing down in the warehouse. Aesthetically, the effect was striking: the pallet had become a thing, alive and whole.
Although the technology was in place by the mid-1920s, pallets didn’t see widespread adoption until World War II, when the challenge of keeping eight million G.I.s supplied—“the most enormous single task of distribution ever accomplished anywhere,” according to one historian—gave new urgency to the science of materials handling. During the summer of 1941, at Fort Wayne, Indiana, the army staged a field test of various materials-handling contraptions, and the pallet–forklift combo trounced the competition. The Quartermaster General ordered a million pallets, and the domestic pallet industry was effectively born.5
Military depots began by palletizing heavy, regularly shaped objects, such as tins of K-rations. But over the course of the war, these depots, facing shortages of time, space, and labor, brought more and more items under the regime of the pallet. The Quartermaster Depot in Jeffersonville, Indiana, which occupied ten city blocks, was particularly aggressive in this regard; during a six-month stretch in 1943, workers there discovered novel methods of palletizing mattresses, saddles, baled goods, pyramidal tents, and tanned cowhide, among other items. By the end of the war, Jeffersonville had palletized 98 percent of its stock.6
To get a sense of the productivity gains that were achieved, consider the canvas-like material known as duck. When an unpalletized rail car full of duck arrived at Jeffersonville, it required nine men, several four-wheel trucks, a forklift, and a warehouse mule to unload—a “long, involved process,” according to an item from the depot’s daily newsletter. The situation was “changed to a considerable degree” in October 1943, when a method of palletization was worked out that required fewer men, fewer machines, approximately half the time, and not a single mule.7
The pallet industry boomed after the war, along with interstate highways, long-haul trucking, and the rise of a national consumer culture. The canneries of the Salinas Valley were early palletizers, followed by other grocery sectors, then the auto industry, then everything. In 1954, pallet manufacturers left the country’s wooden box association and founded their own trade group, the National Wooden Pallet and Container Association, or NWPCA. Its slogan: “Pallets move the world.” Sometime in the early 1970s, on a CBS news broadcast, John Kenneth Galbraith informed Dan Rather that pallets were the second-fastest-growing industry in America. “What are those?” Rather asked. Or so the legend goes.8
The boom ultimately created a problem, because all of these pallets did not disappear when they reached their destinations. They piled up: on loading docks, in stockrooms, in landfills. Beginning in the late 1970s, people realized these used pallets might have value, and the pallet recycling industry was born. There was good money in recycling, especially in the early days. The supply of raw material was cheap, if not free, the capital investment was minimal, and the whole thing had an appealing simplicity: acquire pallets from wherever they end up, fix them up, sell them back to manufacturers. The service this new generation of recyclers provided was called “reverse logistics.”....
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