Lack of Labor and Lumber Shortage May Affect Your Pallet Supply

It’s no secret that e-commerce has surged over the past year. And of course, shipping door-to-door has increased the demand for pallets. But that’s not a problem, right? Pallets are everywhere! Not so fast…

lumber

Due to high demand, retailers and manufacturers are stockpiling pallets or creating storage to hang onto existing supplies. Procuring new pallets is also challenging. That’s because what was once an easy and inexpensive item in the supply chain to produce has become more difficult and costly to manufacture. Here’s why:

  1. Lack of Labor. Between December of 2019 and December of 2020, the wood product manufacturing sector lost 8,400 jobs (source). This means there are fewer loggers and mill workers to produce pallets.
  2. Lumber Shortage. While there are plenty of logs across the country, pandemic-induced business closures forced large lumber mills to shut down or reduce operating capacity last spring, which is largely to blame for lumber shortages. That, combined with the overwhelming demand for building materials, has the lumber industry scrambling to keep up. Soaring demand and low supply have driven up prices and increased lead time for lumber. According to the National Association of Home Builders, softwood lumber prices have reportedly tripled since last spring
  3. Record-High Prices. With labor and cheap lumber scarce, pallet prices have hit record highs. Nails and other fastener materials have also risen sharply in cost. According to a recent article on bloomberg.com, the usual price tag of $9 to $12 per wooden pallet may approach $15-16 this year.

Rose Pallet has taken steps to help ensure that we can maintain an ample supply of pallets for our customers. Tenacious pre-buying has helped mitigate some of the challenges. But the reality is that raw materials have diminished, which has affected lead time and pricing. Even so, like other challenging times, we will get through this together. We’re happy to continue the discussion. Contact us today for a free consultation.

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