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Front Page News - April 200
Industry news about transporation costs, IFCO and PalEx merger, and intl. packaging standards.

By Staff Writer
Date Posted: 4/1/2000

Appeared First In The Pallet Profile Weekly

Diesel, Transportation Costs on the Way Up

Transportation costs are going up. The culprit: escalating prices for diesel fuel.

Already, the rising transportation costs are exerting pressure for higher prices for hardwood pallet lumber, particularly along the East Coast.

Diesel fuel prices have been rising nationwide, but the problem has been particularly acute in the Northeast. The regional average in the Northeast increased to about $2.10 per gallon in mid-January from about $1 a year ago. The national average is about $1.45 per gallon.

Some transport companies are refusing to take freight into high-priced areas unless they can pass along a fuel surcharge to shippers. (Pallet Profile, Feb. 11, 2000)

IFCO, PalEx Merger Expected in March

IFCO Systems is scheduled to complete its acquisition of PalEx in March; the merger of PalEx into a wholly-owned subsidiary of IFCO Systems will coincide with an initial public offering of stock expected to be conducted March 6.

IFCO Systems will include IFCO’s returnable container pool program in Europe, the U.S., South America and Japan and PalEx’s North American pallet and industrial container operations.

IFCO Systems will own and manage the leading rental returnable container pool in Europe and the second largest rental pallet pool in North America. With the merger of PalEx, IFCO Systems also will be the largest provider of new and recycled pallets and industrial container reconditioning services in North America. (Pallet Profile, Feb. 18, 2000)

Brazil Restrictions On Packaging Clarified

We have new information from the U.S. Department of Agriculture about new regulatory requirements Brazil is imposing on pallets and other solid wood packaging entering that country.

Brazil officials cited the introduction of the Asian long-horned beetle into the U.S. and damage caused by wood wasps as the reasons for the new restrictions, which took effect last month. U. S. officials are negotiating to resolve some of Brazil’s concerns, and Brazilian officials are supposed to finalize the new regs this month.

Solid wood packaging shipped into Brazil from the U.S. must be treated — either fumigated or dried — no sooner than 15 days prior to leaving the states.

Treated wood packaging also must be accompanied by a phytosanitation certificate. There’s a problem, though. The federal Department of Agriculture does not issue phytosanitary certificates for pallets and containers. So shipments likely will be held and the wood packaging treated upon arrival in Brazil at the importer’s expense, or else the wood packaging may be incinerated at the importer’s expense. (Pallet Profile, Feb. 25, 2000)

Clinton Proposes $1.4 Billion for Preservation

President Clinton’s proposed budget calls for a record $1.4 billion for preserving land and coastal resources. It would be the largest one-year appropriation ever for conservation.

On top of that, he wants dedicated funding for the same level into the future for more preservation.

More than half the $1.4 billion would go to state and local governments.

The huge outlay would be divided among a number of different programs. For example, Clinton proposed $521 for helping state, local, and tribal governments to conserve wildlife habitat and ‘green spaces;’ that’s almost four times the current funding level. (Pallet Profile, Feb. 11, 2000)

Thermoplastic Boom Good for Natural Fibers

Demand for natural fiber thermoplastic composites has shown exceptional growth in recent years. Last year, demand exceeded $200 million.

These products represent one of the fast-growing segments of the composites market with annual growth topping 25% over the past several years, according to Kline & Co., a New Jersey-based management consulting firm.

Natural fiber composites include a variety of fiber products, including wood fiber, wood flour, shell fibers, flax fibers, and other agricultural fibers compounded into thermoplastics. These fibers were used in niche applications in the past but the market in thermoplastics is taking off, according to Kline. (Pallet Profile, Feb. 4, 2000)

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