Why Is the Wood Pallet Industry Still Suffering with Its Short Wood Waste Problem?
By Thom L. Labrie
Date Posted: 3/1/2002
One of the most common complaints I hear from both new and recycled pallet manufacturers is their frustration with watching perfectly good boards being fed into grinders. In many cases 29" long clear stock is being ground into low value fuel or mulch because a facility makes no product shorter than 30". In some mills even 35" stock is considered un-useable. Considering the economic, environmental and competitive climate in today’s marketplace, this is a serious problem for the pallet industry that needs to be corrected in the near future.
When stud manufacturers faced a similar problem they turned to finger jointing to significantly improve their raw material utilization. Due to the structural requirements of their product, they had to develop a manufacturing process and testing criteria in order to produce a certifiably stable building material. Today, structural grade finger jointed products are being used across North America by many contractors because of their straightness and stability. The many millions of 2x3 to 2x8 trim ends that are used to produce these building materials have gone from being a low value feedstock for chippers and grinders into being a much higher value proprietary product.
As finger jointing evolved and proved itself as a viable means of converting short stock into stable products, other sectors of the wood products industry took advantage of this technology. A walk through many new homes and large building material outlets offers a look at lumber, beams, moldings, handrails, flooring, window and door frames, cabinets, furniture and other products that are produced with finger jointed wood. With the worldwide wood products industry successfully capitalizing on converting short stock into value added products, why does the wood pallet industry continue to grind up potentially valuable stringer and deckboard component stock?
After having been approached by many new and recycled pallet manufacturers with questions about finger jointing over the past two years, there appears to be a rapidly growing interest in the opportunity. At the Indianapolis NWPCA meeting, I had numerous conversations with pallet people about the finger jointing opportunities just waiting to add dollars to the bottom line. Bruce Scholnick, president of the NWPCA, indicated that wood utilization and recovery was the number one concern chosen on a recent survey. I am hoping that industry responses to this article and NWPCA efforts will verify whether or not there is enough industry promise to support pallet-related testing of finger jointed products.
But there are two significant barriers that have to be crossed before the industry will be able to effectively deal with its short stock utilization problem. The first barrier is that most business people, including pallet manufacturers, are afflicted with GPS (Guinea Pig Syndrome). This condition keeps pallet manufacturers from willingly going out on a limb to produce finger jointed pallets, no matter how many tons of 29" long boards that are being fed into a hired grinder. The other barrier is that without an existing criteria established for producing finger jointed pallets, it appears that the combined manufacturing sector, trade association and research arms of this industry are skeptical of finger jointing as a viable solution to the waste problem. Otherwise, finger jointed pallets would have been mainstreamed by now. To date, there has been very little finger jointing research done in pallets or pallet parts.
When you get down to basics, several things are clear. Finger jointing works for producing load bearing products, and the groundwork has already been laid for the pallet industry to move in step with the building materials industry. Finger jointing helps solve several problems simultaneously for the wood pallet industry. Finger jointing can generate new revenue streams potentially and a fast return on investment for many new and recycled pallet manufacturers. Someone needs a to take a leadership roll in order to get the ball rolling.
Considering all of the roofs of both residential and commercial buildings that are supported for endless periods of time, snow loads and all, by finger jointed beams and trusses, the pallet industry can have confidence that this proven technology should work for it as well. And, by tapping into the already funded research material and criteria established for producing certified horizontal load-bearing finger jointed building products, a fast track and economical program could be instituted for producing finger jointed pallets.
Extensive testing results are available on finger jointing technology, glues, and applications. Some limited testing has been done on pallets. The University of Maine is doing some research on finger jointed cants, and the Franklin International glue people are testing some SYP finger jointed pallet stock. A few finger jointed pallets have been sighted in practice, but the potential is all in the future at this time, just waiting for progressive pallet companies to participate.
When the big picture gets reduced to basics, the reality is obvious. Wood pallet manufacturers can add profit to their bottom lines by converting short pieces into useable pallet stock. They need to generate new revenue streams through recovery and value adding programs to grow. We can stand to improve our environmental reputation and perception in society’s eyes; it will help our products remain viable. The industry needs to stay on top of evolving technologies and emerging sustainable wood products marketing opportunities to remain successful as the wood products arena expands globally. Basically, finger jointing addresses and contributes positively to each of these opportunities.
There are many different styles of finger jointers available that offer from low to high production capabilities. Current technology in both machinery and adhesives allow everything from dowel trim ends to cant and timber cut offs, in both green and dry condition, to be jointed into longer stock for value adding opportunities. The secret to success is to fit the right system to meet a facility’s production needs, profit margin and return on investment requirements. For example, the idea of creating a continuous cant from shorts and then cutting to the exact desired lengths with virtually no scrap has obvious potential bottom line benefits.
For the purpose of demonstrating the significant new revenue stream that could be generated through a basic pallet shop finger jointing operation, the following scenario will be used. The suggested system is a low production single joint line that will convert two short boards into full length stringers and deckboards. It will include a trim saw, shaper with tooling, glue applicator, and fixed length assembly press. Based on proper layout, the system would be run by one operator, produce from two to four finished components per minute and cost $35,000.
For developing a payback analysis, the target will be to produce two stringers per minute with a $0.60 value per stringer. Based on a 420-minute shift and a conservative production rate of 80%, approximately $400.00 worth of recovered stringers could be produced per shift. Extrapolated out, this type of low production recovery system could generate about $2,000 per week, $8,000 per month and $100,000 per year worth of stringers out of material that had probably been destined to be low value fuel or mulch.
Budgetary allowances are as follows; labor = $25,000 / year, adhesive = $0.03 / joint or $5,200 / year, tooling maintenance = $3,000 / year, and general machine maintenance = $5,000 / year. The system would be purchased through a 60 month lease / purchase program with a $792.00 monthly payment. Based on these numbers, a small one operator finger jointing system could generate about a $48,000 profit the first year and offer less than a 10 month payback on the system. If you add in additional savings relative to the costs associated with inbound transportation and handling, primary processing and residue disposal of new raw material displaced by recovered stingers, the payback could improve significantly. Also, larger and faster systems currently on the market can produce even more dramatic results when properly sized for a given recovery operation.
The question is -- Is the wood pallet industry ready, willing and able to move itself technologically into the 21st century? Or, will it stand by and watch competing materials (i.e., plastics), foreign competitors and other inevitable emerging forces gain ground and acceptance on its turf? Will our industry continue to under-utilized its solid wood fiber resources and loose the potential new revenue streams that are at its finger tips by implementing better recovery and value adding programs? Will it expand its successful PDS (Pallet Design System) program to include a PDS/FJ section? These are critical issues that need to be addressed now. Without creative and aggressive leadership, we may have the painful experience of watching another sector of the wood products industry decline in size and stature and suffer the economic implications of losing manufacturing jobs.
The solution will come when enough new and recycled pallet manufacturers take the initiative to educate themselves about recovery and value adding opportunities. During this evolution into the 21st century arena, a number of owners will decide to take advantage of discovered opportunities thereby starting an industry trend in the right direction. I believe that soon after the trend is in motion many company owners and managers will verbalize their regret for not having implemented a finger jointing system much sooner.
So, the question is "who’s on first base and how many outs?"
For more information on the subject of finger jointing, contact Thom Labrie at 800-888-4244, 207-784-4244 or firstname.lastname@example.org. To register your ideas about research into finger jointing of pallet lumber, call the NWPCA at (703) 519-6104.
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