Western Pallet Magazine July 2021 - Page 20

20 WESTERN PALLET

CEO Master Learning Group Notes and Quotes

Industry leaders discuss lumber prices, core availability, labor and automation, and industry consolidation, sustainability and customer pallet appreciation.

WPA’s CEO Master Learning Group was held via Zoom this July, offering great insights into topics including the turbulent lumber market, core availability,  labor and automation, sustainability, and more. Here are some notes and quotes from that session - the latter edited for brevity.

Managing volatile lumber prices

It was important to convey to customers that the market was out of pallet producer control and that as prices come down, pallet suppliers have to work through high dollar inventories that were built to ensure that customers did not run out of pallets.

“The best thing we have done is to be transparent and open with customers. We were sharing a lot of industry information indices, and everyone was dead focused on the futures market. What was ironic, I think, and our challenge today is that as the markets are receding, all of a sudden they have become lumber experts. And they know what we should be buying for and selling for, without any consideration about inventory positions or the things that we all have had to do to ensure that our customers didn’t run out of pallets.”

Regional core availability

Regional core availability

Some areas are reporting increased core availability out of distribution centers and terminal markets (Colorado and New Jersey) while California is characterized as steady. Some participants are seeing better quality cores as more customers have had to buy new 48x40s, while others are reporting also that there are more really poor condition cores as desperate customers have been forced to ship on poor quality pallets.

Recycled pallets are being moved from Colorado and Arizona into the California ag market. “We are doing some really silly things to get pallets into (California) customers’ hands.”

And the prognosis is that things would not be returning to the old normal. “I don’t think you’ll ever see cheap cores again.”