Representatives of major nations approved changes in April to ISPM-15, the global standard for treating wood packaging.

            The Commission on Phytosanitary Measures (CPM), which oversees the standard, approved the same bark requirements that the European Union adopted earlier this year. The new rules limit bark to individual pieces that are either less than 3 cm in width (regardless of length) or if greater than 3 cm in width, not more than 50cm2 in area.

            The American Lumber Standard Committee (ALSC) has a stricter guideline for repaired packaging in the United States than some other countries are mandating. All repaired packaging in the program must have any previous marks removed, be completely re-treated and re-marked in compliance with ISPM-15. Simply repairing with heat treated boards is not acceptable except in special circumstances, which must be approved in advance by an ALSC accredited agency.

            There have also been a few slight changes to the official mark regarding the placement of the certification agency logo. ISPM-15 now requires that the agency logo and the “Dunnage” label be placed outside the border of the mark.

            Currently, trans-border shipments between Canada and the United States are exempt from ISPM-15 regulations due to a bilateral agreement reached by the countries. But the impact of the emerald ash borer and other invasive species has caused the two countries to rethink this exemption. However, no timetable has been set for any new requirements on trans-border shipments.

Industry People Transitions in 2009

            The pallet industry experienced a lot of change over the last year. New faces joined the ranks, familiar people began new experiences, and veterans moved on.

            As usual, some of the major associations elected new officers and board members. The National Wooden Pallet and Container Association (NWPCA) elected Clint Binley of Pallets Incorporated as chairman of the board; Bob Wenner of Pallet Service Corporation as the chairman-elect of the board; and John Swenby of American Paltech Group as secretary/treasurer.

            New officers of the Western Pallet Association include Greg Vipond of Girard Wood Products as president; Kathleen Dietrich of Commercial Pallet and Lumber as vice president; and Ken Conklin of Shadybrook Lumber Products as secretary/treasurer.

            One of the most striking changes 2009 saw in association leadership was Gordon Hughes leaving the Canadian Wood Pallet and Container Association (CWPCA).

            Few people have made a mark on the pallet industry that matches that made by Gordon Hughes. So, when it was announced in June that he would no longer be the leader and voice of the CWPCA, it came as a shock to many of us.

            Gordon has been connected to the CWPCA/ACMPC for so long that the two are synonymous. Virtually all of the change seen in the CWPCA/ACMPC has occurred under Gordon’s leadership because he has been there throughout its history. Under Gordon’s leadership, the CWPCA/ACMPC grew from 24 members to almost 300 members by 2006.

            He has also played a large role in working to pull together the pallet industry around the world. Gordon was involved in founding the Interpal-World Pallet Congress international pallet meetings and the World Pallet Council.

            Gordon has a lot of drive and he applied it for almost 38 years in the industry. He is a forward thinker who thinks far beyond serving only his members.

            Gordon was succeeded as the CWPCA’s Executive General Manager by Jean-Francois Houde of the Canadian Lumbermen’s Association in September.

            Many people also received promotions within their company during the year. George Skarich was promoted to executive vice president of sales and marketing for Mid-Continent Nail Corp. Wood-Mizer named Randy Panko as the new AWMV U.S. sales manager. And Mark Stevens was named president of Viking Engineering & Development.

            Other position changes included Cody Evans being added to Viking’s sales team, Darriel Miller’s appointment as distribution manager of Wood-Mizer’s blades division, Scott Henderson being named sales manager for the Great Lakes region by Mid-Continent Nail Corp. and William Cooper retiring from Cooper Machine after serving as president for 18 years.

            Sadly, the pallet company also lost people whose shoes can never be filled.

            M.L. Self, president of Bronco Pallet Systems, Inc., passed away in his sleep on November 10.

            M.L., a retired boiler maker, started Bronco Pallet Systems out of a small pallet shop in Bay City, Texas. Having looked around the market, M.L. thought he could develop a better machinery system that with increased automation to boost production. He went to his shop and created his first Bronco Nailing System. After six months, and knowing that he had hit upon a good idea, he got a patent attorney and then started selling Bronco Nailing Systems.

            He incorporated Bronco in 1992; it is still going strong today. His son Morris and wife Nancy worked along with M.L. to make the company successful. Along with Clarence Leising, who recently rejoined the Bronco staff, they will continue serving the Bronco customer base with existing and expanding pallet machinery.

N.C. Pallet Manufacturer Stays Responsive to J-I-T  Requests

By Tim Cox

            Supplying quality pallets and providing ‘just-in-time’ service keeps business humming along for Richmond Forest Products.

            “We keep a lot of inventory,” said Johnny Johnson, owner of the Rockingham, North Carolina plant, “more than other pallet suppliers this size.”

            Richmond Forest Products carries about $150,000 in finished inventory, according to Johnny. However, that investment enables the company to deliver within four hours to a customer from the time they call, he noted. “That means a lot to customers,” he said.

            “We get a lot of last-minute orders,” said Johnny, which is why he provides just-in-time service. “Customers call at 8 a.m. and want them by lunch…We’ve seen that a lot in the last six months.”

            Stocking pallets for customers is definitely a selling point. “It cuts down on their inventory,” said Johnny. “They would rather have their pallets sit here, ready to move, instead of sitting at their place, being billed for them.”

            “The customer’s always right,” Johnny said, “and you work with them to keep your business coming in.”

Valley Pallet Taps Logistics Opportunities

By Dr. Ed Brindley, Publisher

            The transportation and logistics services Valley Pallet provides for manufacturers account for about 10% of its business. But its services have expanded far beyond hauling pallets and containers.

            Every winter, Valley, headquartered in Salinas, Calif., performs a unique logistics service when produce companies shift their operations from California to winter harvesting in Arizona. Valley is part of the produce industry’s yearly migration by moving the equipment and supplies, everything from slicers to conveyor lines to forklifts, according to Frank Shean, owner of Valley Pallet.

            Valley Pallet also manages pallet supply programs for major retailers, such as Pets Mart, Costco, and Albertsons. A Valley employee is often stationed at a retailer’s distribution center to sort and take inventory as pallets arrive with shipments. Surplus and broken pallets are purchased by Valley Pallet and transported in one of its trucks back to a plant and other pallets are delivered to the shipper for reuse.

            Valley Pallet switched to leasing its trucks in 2002. The fleet was aging, and maintenance costs were averaging $1000 a month per truck. Valley sold all but its seven newest trucks and leased 18, ending up with fewer trucks that were more productive because downtime was reduced. Now it keeps all the trucks on the road and pays licensing, insurance, and permits on fewer trucks, according to Frank. Having control of their own vehicles allows Valley more control over its own destiny, saving money for itself and its customers.

CHEP Pioneers Automated Digital Inspection Technology

By Carolee Anita Boyles

            As technology advances, the needs of the supply chain change.  For many companies that recycle pallets, this can present serious challenges. For CHEP, the operator of the largest private pool in the United States, these challenges have resulted in technology innovation and enhanced quality control initiatives. 

            CHEP is developing new technologies involving the inspection of pallets. “Currently, all the inspection is done by people,” Skip Miller, vice president of quality for CHEP USA, said. “But we’re in the process of developing what we call ‘automated digital inspection,’ or ADI.”

            ADI uses a series of cameras and lasers to take an image of the pallet and compare it to the specifications in the computer. Then the computer makes a decision as to whether the pallet is within specifications or needs to be repaired.

            The system’s primary purpose is to reduce the variability in the inspection process, so ultimately there is reduced variability in the finished product because people tend to be less precise than machines. Pallets that need repair are sorted out while the good ones are sent on. Skip said, “It’s not designed to increase throughput or reduce cost.”

            CHEP is testing the ADI system in its Dallas service center to evaluate the same number of pallets as a human operator, about 600 an hour. CHEP doesn’t have a target date for when the ADI system will be in full use. Although the hardware and software involved in this system currently are proprietary, Skip said he believes this is the first time the specific products have been used in this kind of an application.

Annual State of Logistics Report Review

Logistics Costs Drop, Shippers Face Long-Term Transportation Challenges

By Chaille Brindley

            The following is a synopsis of significant trends from the annual State of Logistics report published by the Council of Supply Chain Management Professionals. 

            • Abundant transportation capacity, especially in trucking and ocean shipping, led to downward pressure on rates, frequently below costs. This has forced many transportation firms out of business, which may create a strain on truck capacity when the economy rebounds.

            • Logistics costs fell in 2008 after rising over 50% in the last five years. Inventory carrying costs plunged, primarily because interest rates were over 50% lower than in 2007.

            • Business inventories rose for the first half of 2008 and dropped in the second half of the year as companies looked to adjust for receding demand.

            • There will be more pressure on Just-in-Time inventory in the future and inventory storage is going to be pushed up the supply chain to manufacturers, as companies redefine supply chains and processes.

            • One bright spot was 3rd Party Logistics (3PL). Revenue for forwarders and other 3PLs was up almost 6.7% last year. 3PLs have been buying transportation on the spot market and making deals with the abundant capacity.

            • Inventory turns are down substantially as stocks spend more time in storage. Warehouses have focused on value-added services to increase revenue.

            • Transportation costs rose less than 2% in 2008 compared to 6% the previous year. Fuel surcharges, a major driver of higher costs in the past, reduced significantly.

            • Current overcapacity and price reductions are the lull before the paradigm shift. Companies should take proactive steps to ensure they are ready for the challenges that will occur when the economy rebounds, such as locking in freight capacity, looking at the use of intermodal transportation and diverting truck movements to rail and inland waterways and reassessing suppliers to determine the risk of failure or disruption.

The Key to Supply Chain Savings: Are Your Customers Shipping the Best Load® on Every Trip?

By Dr. Marshall S. White

            Current supply chains operate with significant avoidable cost because they have designed unit loads one component at a time. The packaging, pallet, and unit load handling equipment are usually designed individually by vendor suppliers focused on reducing the cost of their individual product. This “component” approach to the design of a “system” leads to inefficient supply chains.

            A true systems-based approach is required to significantly reduce supply chain operating costs. This approach takes into account each aspect to maximize the product on each unit load with the minimal amount of packaging cost to safely do the job.

            The best opportunities for unit load packaging cost savings are not necessarily by reducing pallet cost. Usually, the largest expenditures are the empty 32 oz. plastic bottles and the pre-printed corrugated containers. When these bottles and cartons are to be unitized, designers must focus on their compression strength because the cartons will be stacked in columns on the pallet and unit loads may be stacked one on top of another during storage. The compressive loads are significant.

            Shippers can save more money per unit load by reducing the costs associated with the plastic bottles and corrugated cartons than the wood pallet. Actually, the optimum designs in some cases require more or thicker deckboards to adequately allow for the total packaging redesign with the smallest total unit load cost. As long as each component is designed individually, this cost savings will never be realized.

            The good news for the pallet industry is that a better designed pallet with more lumber might actually be the biggest total savings for your client. Working every little penny out of the pallet may end up costing millions more in other aspects of the unit load.

Keeping an Eye Out for the End

By Jeff McBee

            The close to historical lows of softwood mill production coupled with the knowledge that a small percentage of a mill’s production becomes random length economy would ordinarily send shivers down the spine of every pallet producer in the West.

            It hasn’t yet. The western pallet industry comfortably survived all of 2009 under those exact conditions and there hasn’t been any panic.

            The western grade softwood market’s behavior has been quite a bit like a game of tug-of-war between limited production and limited demand. Each time production levels fall, the market seems to adjust to the lowered production. Mill output drops, resulting in concern from buyers that the market will tighten and prices will climb. Each step of the cycle, however, results in production overpowering the very limited demand. 

             Prices of economy stock had only risen modestly during even the tightest part of the availability cycle. The largest market factor that helped keep industrial softwood prices in check was pallet lumber buyers’ ability to find utility and higher grades within their usable price ranges in the absence of sufficient supplies of economy.

            This availability at levels affordable to the pallet industry is historically unheard of, with the exception of the occasional spot load, or distressed stock. This year has been one long exception. The pallet industry has bought more utility and standard & better material than it has economy stock.

            It’s obvious that the absence of a solid housing market is the main factor making the higher quality stock affordable to the pallet industry. What isn’t obvious is how long the trend will last.

Lumber Availability Concerns Loom in the Future

By Chaille Brindley

            Contraction in the lumber market spells challenges for the future. Every week there is another news announcement about mills shutting down or curtailing operations. Older mills that are less efficient may never come back when the market rebounds. Sawmills with a geographic disadvantage could face the permanent chopping block.

            Be alert for changes in your regional market. Have environmental regulations made it more difficult to log in your area? Are log resources tapped out in your area? How far do you have to pull logs from to supply your facility? These are all important indicators to watch.           

            Even though you may feel like you are swimming in lumber offers now, when the economy rebounds, the reverse could become true. Many mills that have downscaled or completely gone out will not come back. Now is the time to be building your network and treating your suppliers right. Although you may not be able to stockpile supplies, being civil to lumber and core suppliers is free. It just takes a good attitude and a little bit of patience.

Desiccants Combat Moisture in Shipping Containers

By Peter Hamner

            Wood pallets must be dry. At a minimum, wood pallets need to be less than 20% moisture content (MC) when shipped in containers. Even at 20% MC there is a potential for the contents of a container to be contaminated.

            However, without some form of accelerated kiln or fan shed drying process, hardwood pallets take from one to three months to reach less than 20% MC.

            Container desiccants have long been instrumental to the global transport industry by protecting shipments from condensation damage. Desiccants can capture many gallons of moisture when relative humidity is high. By preventing the release of this moisture as liquid water condensation — or worse, as ‘container rain’— desiccants have proven most effective and gained increased acceptance with the majority of the world’s container traders. The argument favoring the use of container desiccants has become even more compelling with the development of improved formulations and their affordability.

            Anhydrous calcium chloride is perhaps the most popular desiccant available today. It is efficient in mopping up free moisture released within a container load as it experiences changes in temperature, can remain active for many weeks, and is effective at preventing leakage and re-releasing moisture back into the environment.

Logistics Changes Have Implications For Pallet Demand

            As the U.S. manufacturing base has eroded over the years and become globalized, pallet companies increasingly found that the local product manufacturers they had served for decades disappeared as production shifted elsewhere – to the southern United States, to Mexico, and then more dramatically to Asia.

            Globalization was built on cheap fuel and cheap labor, but neither of these can be taken for granted anymore. Rising standards of living in Asia and fluctuating global currency prices are also making former globalization powerhouses less competitive. One study recently found that 56% of companies surveyed now have a higher landed cost for products produced in Asia than they had when they manufactured them at home. Other concerns include quality and public safety problems associated with the materials used by Asian manufacturers, rising costs of manufacturing in China and intellectual property protection. Needless to say, the rationale for global trade is being critically re-examined.

            One of the latest trends to address these problems is reverse globalization or shortening the supply chain, also known as near sourcing. Companies are hoping to reduce cost and risk through reducing globally sourced products. Some production will return to the United States, and more is anticipated to return to Mexico and South America. Increased use of rail shipment versus long haul trucking, decreased import traffic, and increased exports are also predicted. Globalization is far from over, but it has been made painfully obvious that off shoring production isn’t always the best solution for a manufacturer.

Wood, Plastic Pallet Makers Team in Effort to Save Industry

By Rick LeBlanc

            Aug. 1, 2014 - The ferocious campaign between wood and plastic pallets is finally over with both sides battered and bloodied.

            The pallet industry has been decimated the last two years as confused, disillusioned pallet users around the world have rapidly switched to a new alternative, the Gliptenstein unit load process.

            From the Glipto 1000 model to the extreme performance Glipto Commander, the Glipto Inc. products have received immediate acceptance from former pallet users.

            “Logistics decision makers just didn’t have time to wade through the claims and counter-claims — whether deforestation or the supposed dangers of deca bromine,” said Tango ConAmore, president of the European Logistics Institute, who facilitated this week’s emergency World Pallet Meeting in Milan. 

            “What the big boys seemed to forget is that customers are not willing to invest too much time or effort in their pallet purchase decision,” added Amos Pinky, vice president of marketing at Pinky Pallets in Fresno, Calif., a niche manufacturer of inflatable pallets. “Pallets were making it onto boardroom agendas…in the worst context possible—one of extreme concern about corporate risk posed by food safety or loss of environmental image.”

            It was this window of opportunity that allowed the hitherto unknown Raymond Gliptenstein entry into the unit load base market.

            “When the pallet manufacturers insisted on trying to destroy each other’s credibility back in 2008 and 2009, that was the opportunity Ray needed,” said Amos.

            This week in Milan, surviving pallet companies are attempting to claw their way back off the canvas to regain customer acceptance.

            “Wood pallets don’t really destroy the environment,” a plastic pallet representative said wearily.

            “In retrospect, the negative campaign against plastic may also have been a mistake,” said Steve Glomji of Tacoma Lath, Box and Crate, one of the handful of surviving pallet companies. “Our plan is to mutually promote the benefits of reusing pallets no matter what material they are made from.”

            “Typically, the way this works is that when both sides feel enough pain, they begin to recognize the need to work collaboratively,” said Tango. “In this case, the realization never came in time. Customers got fed up and jumped on board with Glipto, which had a perfectly timed entry.”

            [The above column is completely fictitious. It pokes fun at the current plastic vs. wood pallet debate.]

Pallet User Education Series: Negotiating the Pitfalls of Rental Pallet Contracts

By Andrew Mosqueda

            How you negotiate your contract with a Pallet Rental Company (PRC) can save your company thousands of dollars.

            Don’t believe the line that the contract is standard language that everybody signs. A basic pallet rental contract typically is comprised of several sections such as issue, transfer, lost equipment, emergency load and restocking fees and transportation and daily rental rates. You may be able to negotiate lower charges in each area.

            One negotiable place is fees for shipments outside of the rental system. You can request a discount in areas where you are only shipping to receivers in the network. The goal is to get them to disclose how your issue fee was figured. You want specific information to figure out what goes into it and what can be negotiated.

            When a rental pallet changes hands from a product manufacturer to a receiver, PRCs usually charge a transfer fee. This might be a good place to negotiate lower fees. Keep in mind that most brokers are considered non-participating distributors. Because international business is increasing between U.S., Mexico, Puerto Rico, and Canada, companies should be careful not to accept high transfer fees based on current business. However, if you are shipping 80% domestic you are in a position to ask for a lower transfer fee to U.S. distributors, possibly no transfer fee. If you do ship into non-participating distributors, you may be able to negotiate for a percentage of your shipments to ship into those locations without high transfer fees. 

            You do have negotiating power if you know what to look for before you sign a contract.

Federal Bill Largely Ignores Importance of Wood Biomass

By DeAnna Stephens

            Congressional leaders claim that the American Clean Energy and Security Act (ACESA), commonly referred to as  the Waxman-Markey Bill, will create green energy jobs while cutting carbon emissions and reducing reliance on foreign oil. Unfortunately, preservationist groups are working hard to severely limit the use of wood biomass by strictly defining what qualifies as “renewable” under the bill.

            If the bill is passed with current restrictions, biomass harvested from plantations established after January 1, 2009, many federal lands, or natural mature or old-growth stands would not qualify as a renewable resource.

            The original definitions of biomass were broadened to allow wood biomass from federal lands and more private lands in the eligible sources. However, the existing bill still excludes many federal lands, specifically some older areas in most need of thinning, and uses vague terms regarding other key sources.

            Some projects that voluntarily reduced greenhouse gas emissions would also be punished, as a forest products company cannot receive offset credits for activities started before January 1, 2009.

Report Shows Fewer Pallets Entering Landfills

By Robert J. Bush and Philip A. Araman

            Information from a series of Virginia Tech studies reveals current trends in core utilization by the pallet industry. The most recent report released this year studied trends from 2006. Virginia Tech researchers compared these results to five previous studies going all the way back to 1992.

            When firms were asked to indicate how the cores they received in 2006 were utilized, researchers found that less than one-quarter of 1% of the cores received were landfilled. Over 93% of the firms that received cores were involved in pallet repair/remanufacturing. The remaining firms likely are reselling cores to firms that repair/remanufacture pallets or to pallet users.

            Following the use of cores further, the study found that colored landscape mulch is the most common use of ground material at the equivalent of 39% of ground/chipped cores. Almost half (47%) of the firms that grind or chip cores used material for colored mulch. The equivalent of 29% of the ground/chipped cores was used for fuel and 23% were used for other (uncolored) landscape mulch. The smaller but potentially profitable animal bedding market accounted for the equivalent of 4.4% of the ground/chipped cores.

            Comparing results from five studies conducted since 1992 found that the proportion of multiple-use grocery type cores received by firms in the industry grew from 61% in 1992 to 72% in 2006.

            When combining information regarding the use of new wood and the use of recovered cores, two trends become evident. First, the total amount of wood material utilized by the industry increased steadily between 1992 and 2006. Second, the the large increase in overall wood use (4.43 billion board feet) primarily is the result of increased use of recovered wood. However, there is an indication that large increases in the use of recovered materials may be leveling-off.

FDA Statement Raises Toxicity Concerns for Some Plastic Pallets

By Chaille Brindley

            A group of man-made flame retardants used in plastic pallets is drawing criticism from consumer activists, scientists and regulators.

            Two forms of polybrominated diphenyl ethers (PBDEs) were voluntarily phased out in 2005 due to toxicity concerns. A third formulation, deca bromine, was thought to be more stable and less toxic. However the growing presence of these chemicals in nature indicates that leakage is a problem.

            Supporters claim that the chemical saves lives by reducing fire hazards and that the toxicity risks are overstated. In severe warehouse fires, however, the ignition source generally is great enough that a retardant has little effect. Once ignited, a plastic with a fire retardant will not burn significantly different than a plastic without it.

            The U.S. Food & Drug Adminstration (FDA) recently warned about the danger of deca bromine becoming an unintentional food additive when treated pallets are used in the hydrocooling process for fresh produce. As an unauthorized food additive, any situation where deca bromine could leech into food would require further study to identify the real risks.

            The two major alternatives to deca bromine are phosphorous (commonly found in fertilizers) and magnesium hydroxide (the main active ingredient for milk of magnesia). As natural occurring minerals, these products carry less ecological concern than deca bromine. However, too much of even these “safer chemicals” is not necessarily good for the environment.

            iGPS, the all-plastic pallet rental company, uses deca bromine as a flame retardant on its pallets. It denies any serious threat pointing to the widespread use of deca bromine. iGPS may have chosen deca bromine because less of it is needed to treat a pallet than the major alternatives. Additionally, the amount of additives needed for phosphorous or magnesium hydroxide can make the pallet brittle, affecting the long-term performance of the pallet.

            Despite multiple studies, concerns remain about the long-term effect of PBDEs accumulating in the environment and humans. With so many questions left unanswered, is it any wonder that deca bromine is falling out of favor like other PBDEs?

The New Face of Guerrilla Marketing

By Chaille Brindley

            Competition between CHEP USA and Intelligent Global Pooling Systems (iGPS), the two major pallet pool operators in the country, has reignited the age-old plastic vs. wood debate. And white wood pallet companies may be caught in the middle.

            Guerrilla marketing warfare strategy is designed to wear-down the enemy by a series of minor attacks, using surprise and hit-and-run tactics. This is what has been happening since iGPS entered the market in 2006. The subtle attacks on issues such as fire hazard and phytosanitary concerns are all classic guerilla marketing.

            However, some of what CHEP/iGPS have engaged in resembles a second type of gorilla marketing where two industry giants smash each other in hopes of landing a knockout punch. All the money spent on sustainability assessments is a perfect example. Those efforts hardly resemble traditional guerilla marketing which relies on wits, not big budgets, to win market share.

            Whenever two companies compete this strongly, there will be some splash over onto third parties that are hoping to avoid the feud altogether. Wood pallet companies need to realize that they are engaged in the battle, not on the sidelines. You never know when a stray punch will hit one of your customers.

            The best thing you can do is have a counter punch prepared. Keep collateral material ready that you can use to educate customers on key issues, such as sustainability, fire hazard, pallet quality, true costs of pallet rental, etc. Proactively shape your customer’s perception of your service and products by communicating the positives of your product through inexpensive marketing vehicles.

Customization and Sustainability – Wood’s Place in the House of the Future

By DeAnna Stephens

            Developing technology, customization, and sustainability are all emerging as guiding factors for future home construction. Given the importance of home construction to the U.S. forest products industry, these trends should be watched by every smart sawmill and wood products company.  

            Several model futuristic homes have been built with technology embedded through the houses, such as interactive kitchens and facial recognition capabilities.

            Experts predict an increased focus on customization in the future which could indicate increased use of wood for interior construction. Wood can easily be tailored to fit the wide range of demands that will emerge as homeowners become involved in the design process. Customized crown molding, stair rails and cabinets are basic ways that wood can be used to dress up and customize homes at a minimal cost.

            As a result of the economic recession, the size of homes is shrinking, which brings mixed news for the wood market. Smaller houses require less wood for structural purposes. However, depending on the reason for downsizing, they may create new opportunities for wood.

            The growing environmental consciousness of the American public is also benefiting the wood market. As a carbon neutral material, wood can have a distinct advantage in the green movement. Amid rising concern over climate change, a product that can store carbon for the duration of its life has an advantage over materials, such as plastic and steel, which require high energy consuming processes to manufacture.

            Though wood has lost some of its market share as the chief material in home structures, it is nowhere near being kicked to the curb.

Separating Fact from Mere Marketing Spin

Green Certification Validates Eco Claims for Pallet Companies

By DeAnna Stephens

            Awareness of the environmental impact of businesses is rising and some pallet companies are protecting their environmental image and preparing for the future by obtaining green certification.

            Some pallet companies use the Forest Stewardship Council’s (FSC) chain of custody certification. Because it was already receiving FSC certified logs, the process of becoming certified was easy for Savanna Pallets. Its normal operating procedures remained much the same, with just some additional paperwork.

            Troymill Wood Products chose certification through the Institute for Green Business Certification (IGBC) because the institute had already certified other wood product companies.

            IGBC performs comprehensive audits of entire businesses and performs on-site evaluations. For Troymill, the main suggestions IGBC gave dealt with using recycled products, such as ink and trash bags in the company office.

            EarthRight Business Institute, like IGBC, emphasizes diminishing a company’s ecological footprint by reducing the use of energy and resources, waste and emissions. Its unique system of graduated sustainability awards allows companies to progressively work their way to higher levels of sustainability.

            The Green Business Alliance is more of a green enabler – helping companies understand how to go green and providing plans to help them reach that goal.

            Green certification is still a young industry and the reports on the affect that green marketing has on profit are mixed. But it may be an effective marketing tool for some companies heading into the future.

Examining the Causes and Proper Responses to the Current Global Financial Crisis

By Brian Perkins and Al Schuler

            With the pallet market down sharply since September/October of last year, and the lumber industry taking it on the chin for much longer than that, everyone wants to know hot to respond to the current financial crisis.

            Wood product manufacturers must figure out a way to reduce lead times, reduce inventory, and shorten the supply chain. American producers can’t make products that people don’t want to buy. Are there new products/services that are needed in the market? Good market research will help answer that question. Companies need to become more responsive to consumers and understand their behavior. Now is the time to get closer to your customers and understand them better. Firms must find out what markets they are competitive and profitable in and produce only the value-added features that customers are willing to pay for.

            Pallet companies should look to opportunities in logistics as shippers try to cut costs and need more than just a shipping platform. This includes everything from reverse logistics, storage, packaging management, grinding services, trucking, re-palletization, etc. Plans by the federal government to invest in roads, bridges, ports and inland cargo facilities could provide opportunities for some companies.

            Companies must correctly position themselves to take advantage of the green building and climate change mitigation trends. If your company owns forestland, are you prepared to benefit from carbon trading? Have you performed a cost benefit analysis on forest certification?

            This economic downturn will be notable, but with good management and good marketing, the wood products industry can emerge stronger, more competitive and more sustainable.

Will Price or Quality Be the Key Matrix of the Future?

By Chaille Brindley

            Quality is certainly not the buzz word of the moment. Today pallet and lumber customers seem to be focusing on one thing – price. But signs are pointing to a future demand for quality over price.

            The emergence of new palletizers, Automated Guided Retrieval Systems (ASRS), high speed conveyors and robotic materials handling point to the need for a higher grade pallet in some operations. While these advancements are not new, the rate of application is increasing.

            Traditional pallet failure or product damage is not the primary quality concern today. Bryan Smalley, wood packaging material/pallet programs manager for Timber Products Inspection Inc. said, “The dimensions are getting very tight, especially if you are talking about the variability of repaired pallets being used on palletizers with all these specific red eye functions. Certain spacing is needed in order for the palletizer to see where to load the product. The big issue is generating a pallet that will not slow down or cause a palletizer to malfunction.”

            There will always be the majority who merely want the cheapest price. But there may be more customers who will be willing to pay more for quality in the future if they can be guaranteed that they are getting what they have paid for. That’s where the need for effective third party auditing and oversight comes in to play.

            The best way to know what will really happen is to talk with your customer and see how pallets are actually performing in their increasingly sophisticated materials handling environments. So have you talked with your customer recently about quality? If you are afraid to due to quality concerns, that should tell you something about how the industry may be situated to tackle the future.