JUNE 2023
The overall survey results were as follows:
Gone down 10% or less: 30%
Down 11-25% 34%
Down 26-39% 11%
Down 40% or more 5%
Flat 10%
Up moderately 8%
Up more than 10% 2%
Brindley noted that pallet core prices have probably crashed the heaviest on the West Coast, the region that previously saw the fastest and highest price gains. Now, he noted, core prices have dropped to the $3-$4 range and in some cases, lower. Also, recyclers are becoming more selective about the quality of cores they will accept. Demand for premium recycled pallets is still steady, but not for lower grades. “Demand for number ones and club grade pallets still is pretty good,’ he said. “One of the reasons for that is that those pallets can be used to replace more expensive new pallets.”
Transportation will be slow to improve
Brindley commented that pallet industry demand typically lags the freight market by anywhere from three to six months. Experts have identified the freight industry as being in a recession by the third or fourth quarter of 2022, so it is not surprising to see what has happened to the demand for
“My view is that we will look into next year, and we will see some signs of recovery just in terms of very small marginal levels of recovery. But it is probably going to feel pretty flat for a while.”
- Craig Fuller
pallets. Experts believe that we have hit the bottom of the freight cycle, but that the recovery will be slow. He quoted Craig Fuller from the State of Freight podcast, who said, “My view is that we will look into next year, and we will see some signs of recovery just in terms of very small marginal levels of recovery. But it is probably going to feel pretty flat for a while.”
Consumer spending still strong
Two-thirds of the US economy is connected to consumer spending, Brindley said, remarking that consumer sales have remained strong, surprising experts. He cited motor vehicles and building materials as stronger pockets of demand. With consumers still buying, he questioned how long they can do that in the face of increasing consumer debt, inflation, higher interest rates, and other headwinds. This year’s holiday season spending bump is expected to be smaller than normal.
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