Free pallets just might be harder to come by in the near term as we face a global pallet supply shortage
High current pallet prices, availability crunch for pallet buyers
As of June 2021, North America has weathered an unprecedented increase in lumber prices. The reasons for the lumber spike are generally attributed to supply disruption due to mill closures earlier in the pandemic during 2020, and subsequently due to stronger demand as consumers redirected their buying power from various services to home improvement projects, a strong new home market, and other factors. This article from Forest2Market states that the current supply crunch is ultimately due to stronger demand, as supply in 2020 eventually caught up to the prior year. Industry associations, particularly those in the agriculture/produce sector, have issued alerts to their constituents.
The result has been that companies have faced a dramatic increase in new pallet prices, and that is if they can get pallets at all. Used pallets have also experienced a huge jump in price. And due to the pallet shortage, large distribution centers and retailers that would previously sell their used pallets are now holding onto more of them to meet internal needs, again resulting in a lack of recycled wood pallets in the marketplace.
Ironically, high lumber prices might actually motivate more people to seek free pallets as a cheaper option than purchasing wood, so there potentially could be more people pursuing fewer free pallet opportunities. At the same time, the increased value of old pallets (pallet cores) could well stimulate additional activity by professional pallet pickers, who pick up small amounts of empty pallets from shops and businesses.
Companies more likely to recover and reuse pallets
Given the current situation, companies are more likely to instruct delivery drivers to retrieve empty pallets from delivery points such as retail outlets, institutions and other locations where free pallets would typically be sourced. One factor that might discourage pallet retrieval efforts is the current pressure also seen in the transportation and logistics sector. As such, pallet retrieval is more likely to be introduced at locations that have their own fleet as opposed to using a common carrier.
Are we looking at shifting opportunities for finding free pallets?
Free pallet availability is likely to become tighter in the face of the current shortage, due to increased retrieval efforts by suppliers, as well as more active professional pallet picker activity. Also, the high price of wood might increase the number of hobbyists seeking old pallets. As always, availability prospects should be better for non-standard-sized pallets as well as pallets from locations that accumulate fewer pallets, and those not serviced by supplier delivery drivers.
The bottom line, free pallet availability might be compromised at some locations due to the current pallet shortage. What are you seeing in your community?