July 2025
Halfway Through 2025: What We’re Seeing and What Comes Next
Happy July, Pallet & Crating People! If your 2025 has gone anything like mine, you are probably wondering, how are we already halfway through the year? It has been a fast-paced, complex six months, but that’s nothing new for those of us in the wood packaging world.
As we reflect on where we’ve been and look at where we’re headed, it’s a good time to pause and remember the size and strength of our industry and the value we bring to the economy, supply chain, and environ- ment.
Our Industry, By the Numbers
The American wood pallet and container manufacturing industry supports over 160,000 jobs and is made up of more than 3,000 companies, many of them small and family-owned. The annual economic im- pact is $31 billion through operations in all 50 states.
Our industry also plays a powerful role in sustainability. Over 95% of wood pallets are recovered, reused, and recycled which is more than any other packaging material in the world. Once a pallet reaches the end of its life, it often becomes mulch, animal bedding, or renewable fuel in the form of wood pellets.
Our reach is significant: 90% of all goods in the U.S. are moved on pallets, and an estimated 93% of those pallets are made of wood. We also use over 8 billion board feet of lumber each year which accounts for more than a third of all U.S. production.
Mid-Year Market Signals
So far, 2025 has brought a blend of stability and shifting currents. New pallet pro- duction has been influenced heavily by a national overstock of recycled pallets, keeping prices and demand level across certain grades. Notably, A-grade softwood pallets have held steady, with regional price fluctuations being driven more by trans- portation and inventory than by lumber costs.
Oil prices and freight rates continue to be dynamic. While we’re not at the volatility levels seen in the early 2020s, the ripple effects of global shipping disruptions and energy costs still impact both our margins and customer expectations.
Legislative Landscape: Pressure and Promise
On the policy front, things, much like the weather, are heating up. In May, Washington state enacted the Recycling Reform Act (SB 5284), completing Extended Producer Responsibility (EPR) coverage across the West Coast. As a result, over 20% of Americans now live under EPR laws for packaging – this includes states of Maryland, Maine, Colorado, Oregon, California, and Minnesota. This signals a growing trend that manufacturers and recyclers alike should watch closely, both for its operational and financial implications.
But perhaps the most critical legislative efforts for our sector are happening at the federal level, where we’re actively engaged on two major fronts: renewable energy policy and tax reform.
Fixing the RFS: A Fair Deal for Pallet Manufacturers
One challenge our industry continues to face is the limited market for residuals from pallet manufacturing which includes scrap wood, trimmings, and other byproducts. A promising outlet? Converting this biomass into Sustainable Aviation Fuel (SAF).
Unfortunately, the Renewable Fuel Standard (RFS) currently excludes most pallet biomass from qualifying. Why? The definition requires that woody biomass be certified as not from federal lands which can be a nearly impossible task for downstream producers. This means SAF producers are unlikely to use our residuals, driving up their costs and leaving us with fewer disposal or reuse options.
I’m proud to be among the voices asking Congress to update this outdated definition. Let’s allow the wood waste from our industry that’s already being responsibly collected and repurposed to help fuel cleaner aviation and expand markets for our residuals. This change could unlock new revenue streams, reduce waste, and support sustainability in a meaningful way.
Fixing the Tax Code: A Fair Shot for American Manufacturing
If you’ve tried to buy equipment, expand your facility, or simply keep up with the rising costs of doing business, you’ve likely felt the pressure. The tax provisions that once gave manufacturers some breathing room (tools that helped us invest in growth) are starting to disappear. And the timing couldn’t be worse. With high interest rates and increased competition, we’re being asked to do more with less.
I’m part of the group of business leaders and industry advocates urging Congress to make some impactful fixes. We’re asking to keep the expanded 23% pass-through deduction because that difference helps small, family-owned businesses like so many in our industry reinvest in their operations and people. We're also advocating for the return of 100% bonus depreciation, which previously allowed companies to fully write off equipment purchases right away instead of stretching it out over years. That immediate tax relief made it easier to take risks, modernize, and grow.
And as borrowing becomes more expensive, we’re pushing for a more flexible cap on how much interest businesses can deduct, especially since the current rules penalize us just for financing smart investments. We also want to keep the ability to immediately deduct research and development costs, which encourages innovation instead of delaying it due to budget concerns.
None of these are special handouts. They’re basic tools that used to exist and that we need back if we want to keep making things in America. I’ve seen firsthand how these changes would help manufacturers do what we do best: create jobs, invest in our people, and stay competitive no matter what the market throws our way.
Looking Ahead
As we move into the second half of 2025, our industry sits at the intersection of innovation, environmental stewardship, and economic impact. From cutting-edge recycling efforts to policy advocacy in Washington, the wood pallet and container industry is not just surviving, we’re building, adapting, and leading!
Let’s stay informed, engaged, and ready to speak up for our value.
Here’s to a strong second half—see y’all out there!