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Edisms: The Pace of Change Is Accelerating
Pallet Enterprise founder, Dr. Ed Brindley shares his insight on inflation, pallet pricing and the remarkable way that companies have been able to keep pallet costs down through the years.
By Ed Brindley
Date Posted: 9/1/2012
It is with a great deal of enthusiasm that I am tackling the first in a series of columns we will call “Edisms.” I have often said with a certain amount of pride that Chaille is now our publisher. He has taken over the responsibility of shaping what goes into our publications, including the Pallet Enterprise, Pallet Profile Weekly, and Recycle Record. Recently he came to me and asked that I write a column he humorously called “Edisms.” He knows that I like to write from the hip about a number of everyday topics that are of general interest as well as specific pallet industry related pieces. I enjoy reminiscing about days gone by. So, I guess he is cutting me loose to write what I please, within reason of course. So, here goes.
The other day I received an email from an old friend I made years ago in Bowling Green, Ohio. His email provided historical facts from about 50 to 60 years ago. Seeing the changes that have taken place made me think about how dramatically things have changed during my life.
I remember when I could mail a first class letter for $0.03, buy a standard candy bar for a nickel and fill up my car for about $3 to $5. I took typing in high school on a manual typewriter, and
I remember when an IBM selectric typewriter seemed high tech. My first new car, a 1967 Dodge Dart, cost just a little more than $2500. When my first son Scott was born in 1964, I had no insurance; as I recall the total doctor and hospital bill was somewhere around $500.
Remember when fast food first came on the scene? You could buy a McDonald’s hamburger for $0.15. I was in graduate school about the time that I first heard about credit cards (not counting the gasoline credit cards that had been around for a long time).
My dad used to like to tell me the story from the corner barber shop when I was a child. A man named Kimmons Wilson came to the shop trying to get people to invest $50 in his “crazy” idea – Holiday Inns of America. That was somewhere around 1950.
Closer to home, the pallet industry has seen its share of changes. Customers are more demanding than ever. Block pallets and pallet rental have forever impacted the global supply chain.
Heat treatment and certification requirements have added an extra level of complexity to the business. OSHA and other government regulations force companies to be vigilant about every little detail of their operation. But it is interesting how stable pallet prices have remained. When we started the Pallet Profile in 1977, a 48x40 heavy-duty hardwood pallet with 1” nominal decking sold delivered in the range of $5.20 to $5.30. A 48x40 light to medium duty hardwood pallet with 5/8” decking typically sold delivered for about $4.20 to $4.30. Hardwood cants cost $120/M delivered to the pallet plant. All of these costs were for Virginia mills at that time. We expanded our report later to cover most of the United States.
Compare that to prices today. A hardwood GMA pallet sells delivered today for about $8.75 to $9.25 in most places, a little more than double the 5/8” decking pallet in 1977. While a GMA specification has changed quite a bit, we are comparing a lighter weight pallet then that compared pretty closely with today’s GMA.
Look at cant costs. They have increased from about $120 - $150 nationwide then to $350 or more in most regions today. They have almost tripled in cost while pallets have only doubled during the same period. Your customers are getting a bargain today. How many other things have held down their costs as well? Very few – that’s how many!
If anybody wants to know how to remain competitive and efficient in a tough business where you can be here today and gone tomorrow, look no further than the pallet sector. If you are still around, you are one of the success stories. And the only way to ensure this continues is to keep improving your business, look for new ways to make money and cut costs.