Economy, changes in business practices create challenges for pallet market

A softening pallet market has created a challenging environment for pallet producers and recyclers, even as the economy seems to be stabilizing. Changing approaches to business and slowing demand is leading to an increasing inventory of pallets with buyers shopping prices.

At TriCounty Pallet, our goal is always for stability in a predictably cyclical economy. Several issues are contributing to the changing pallet industry.

Supply and Demand

The booming pallet market of 2021 was driven by a high demand for shipping during the pandemic that resulted in an historic pallet shortage. Pallet companies quickly worked through inventories and watched prices climb until spring of 2022, at which point demand slowed down and prices began dropping back to more normal levels.

But while businesses were expected to work through their inventories in the last 12 to 14 months and seek out additional pallets, that demand has not occurred. Instead, vendors have used discretion in their pallet purchases, looking at options for new pallets and shopping prices.

Economy Growth

The pallet industry is a great predictor of economic health. A strong economy increases demand and prices for pallets, while a slow economy usually leads to a glut of pallets and falling prices.

While the economy is showing growth, the pace has been slower than expected, causing economists to adjust predictions and businesses to temper their activity. The slower expansion of the economy can be attributed to higher interest rates, which are not expected to change as the federal reserve attempts to curb inflation.

Business Practice

Many businesses are not moving products at the level they were a year ago, as the boom in ordering that occurred during the pandemic has tapered off. Working in a backfilling capacity rather than just-in-time means less frequent shipments and sometimes in smaller quantities.

Cost of Doing Business

Even as the economy improves, businesses continue to deal with a labor shortage, demand for higher wages, higher facilities costs, increasing energy costs, and higher transportation costs. So, while supply chains are improving and demand for goods remains strong, a lower-than-anticipated GDP growth rate has most businesses thinking carefully about how they spend.

TriCounty Pallet Can Help

Recycled wood pallets continue to be the best choice a business can make when it comes to moving product from one point to another. Buying new pallets can seem more economical when prices are down, as you are assured of a clean, new product that will last, but consider the following advantages you can enjoy when you work with TriCounty Pallet:

·         There is no fear of broken boards and loose or sharp fasteners that can damage goods. Our used and recycled pallets are inspected, cleaned, repaired, or completely rebuilt so you can be assured of a solid, quality pallet that will safely transport your goods.

·         Recycle your worn pallets and acquire replacements. We accept used pallets at our facilities as well as providing collection trailers on your site that we will drop off and pick up when filled.

·         Go green with TriCounty Pallet. Our recycling program means your wood pallets will not find their way to a landfill. Pallets and pallet boards that can’t be reused are recycled into quality mulch for use by local landscapers.

Even in a changing business environment and a cyclical economy, TriCounty Pallet is your constant for your pallet needs. Contact our team today to learn how we can help your business thrive.