Plastic Pallets: The Answer to the Wood Pallet Shortage

If the wood pallet shortage is affecting your warehouse, then plastic pallets are the answer.

Most U.S. manufacturers rely on wood pallets. According to the National Wood Pallet & Container Association, approximately 9 in 10 pallets in service are made from wood.

But today’s wood pallets are scarce and expensive, which is threatening the health of your supply chain. The cost of an exchangeable wood pallet is 20% higher than a year ago. Plus, new wood pallets can take weeks to reach your warehouse.

The good news? Transitioning to plastic pallets will benefit your productivity and bottom line—right now and long into the future.

Read on to learn what’s behind the wood pallet shortage and why plastic pallets are the best alternative to wood. Then explore how to transition your warehouse to this higher quality, more cost-effective solution.

Jump to Sections:

 

What’s Causing the Wood Pallet Shortage?

The coronavirus pandemic has created and exacerbated issues around wood pallet availability. A limited supply of lumber and labor are the main issues. But other factors, which emerged long before COVID-19, are also to blame.

Lumber Issues
One factor behind the wood pallet shortage is a lack of lumber. The U.S. doesn’t have enough to repair or construct pallets.

The lumber shortage stems from record demand for residential construction. According to Supply Chain Dive (SCD), the coronavirus pandemic has driven more people to renovate their homes or build new ones. Between April 2020 and April 2021, the number of new residential construction starts increased by over 67%. January 2021 saw the highest number of residential construction permits granted since April 2016.

This extraordinary demand has put pressure on an already strained lumber industry.

The Great Recession permanently shuttered 30 large sawmills. When the pandemic began, more sawmills temporarily closed or significantly reduced capacity.

In 2017, the U.S. imposed a 20% tariff on softwood lumber imported from Canada, which added to overall lumber costs.

That same year, the Pacific Northwest endured wildfires that burned over 732,000 acres in Washington and Oregon alone. The potential lumber stock is still recovering. SCD reported that it takes at least a decade for these trees to grow to a harvestable size. The soonest these areas will begin resupplying lumber is approximately 2027.

Labor Issues
Insufficient lumber isn’t the only issue restricting wood pallet availability. The country also lacks the workers needed to harvest lumber, construct pallets, and transport them.

The transportation industry has a shortfall of almost 60,000 drivers. As a result, there aren’t enough trucks to relocate pallets. What’s behind the driver deficit? Many are retiring, and others lost their jobs during the pandemic.

The lumber industry has a labor shortage, too. Sawmills currently lack the workforce to operate at full capacity. Industry leaders point to expanded unemployment benefits and government stimulus payments as reasons why. Plus, some unemployed sawmill workers are waiting to return until they’re fully vaccinated.

Confounding Factors
Other factors are compounding challenges caused by the lumber and labor shortages.

Many of the largest wood pallet manufacturers are turning away new customers. That’s because they can’t fill current customer demand.

At the same time, existing wood pallets are sitting idle due to the increased dwell time of non-perishable inventory.

 

 

Why Does the Wood Pallet Shortage Matter?

The wood pallet shortage has numerous implications. Higher costs are one effect for manufacturers. The demand for lumber and wood pallets exceeds the supply, which has inflated prices.

Between May 2020 and May 2021, the price of lumber more than quadrupled, from $360 per 1,000 board feet to a high of $1,671. As a result, a $12 to $14 wood pallet sold a year ago now runs $25 to $28. Manufacturers are paying more than ever for wood pallets, jeopardizing their bottom lines.

Ultimately, the wood pallet shortage will affect consumers, too. Because wood pallets are so prevalent, the deficit is disrupting the supply chain of nearly every industry. Transport Topics said it has the potential to “put a crimp in the flow of consumer goods, from tomatoes to toothpaste to toasters.”

For example, in May 2021, the United Fresh Produce Association (UFPA) announced that the availability of pallets would soon affect fresh produce supply. UFPA said the ability of growers and shippers to meet consumer demand will be “very difficult, if not impossible.”

Unfortunately, the wood pallet shortage is here to stay, at least for the short term. CNBC reported that lumber volatility and elevated prices will continue for the “foreseeable future.” On June 21, 2021, one industry leader said he expects “extreme” price movement for at least the next six months.

To protect their productivity and profitability, manufacturers must find an alternative to wood pallets.

 

 

Source: Fortune Business Insights, Global Pallets Market Report, June 2019

What’s the Alternative to Wood Pallets?

What’s the Alternative to Wood Pallets?
When pallets emerged in the early 20th century, they were exclusively made of wood. Now, pallets are constructed with other materials, including plastic, composite wood, and metal.

Wood continues to dominate the global pallet market, but plastic is gaining traction. Plastic pallets have the second-highest pallet market share worldwide. Between 2019 and 2026, experts project that they will achieve the largest compound annual growth rate (CAGR) of all pallet types.

Plastic pallets indeed require a higher start-up investment than wood pallets. And, like wood pallets, they are more expensive amid the coronavirus pandemic. As the U.S. economy rebounds, purchase prices for raw materials are rising. For example, high-density polyethylene (HDPE) costs increased threefold from May 2020 to May 2021.

But even in the current market, plastic pallets are the best alternative to wood pallets. If lumber scarcity has reduced your wood pallet supply, then consider transitioning to plastic. Plastic pallets generate higher long-term cost savings by outperforming wood pallets in several critical areas.

 

 

How Do Plastic Pallets Outperform Wood Pallets?

Wood pallets are no longer the industry standard they once were. More manufacturers are turning to plastic pallets to prevent product contamination and damage, reduce cleaning time, and achieve a longer service life.

These benefits can boost profitability by helping manufacturers save money in the long term.

Hygiene
Plastic is more hygienic than wood for pallets. Cleaning and disinfecting wood pallets is complicated because bacteria can embed in the pallet’s grain and crevices. Plastic has a smooth, non-porous surface.

Because they’re easier to clean, plastic pallets lower the risk of product contamination. That’s why they’re ideal for industries with stringent sanitation regulations, such as pharmaceutical, meat, and dairy.

Safety
Plastic pallets are safer than wood pallets for products and employees. They weigh less, don’t produce splinters, and have smooth edges. These properties reduce the risk of worker injuries, tripping hazards, and product damage during loading or transit.

Durability
Durability is one reason experts say the demand for plastic pallets has increased. Unlike wood, plastic resists weathering, rot, chemicals, and corrosion, minimizing broken pallets.

They can also withstand more pressure and wear. For example, Cherry’s PT 4048 Stackable Plastic Pallet supports up to 30,000-pound static loads. That’s approximately five times as much weight as a typical wood block pallet.

Sustainability
Manufacturers can reuse plastic pallets repeatedly because they’re easy to clean and durable. While wood pallets last three to five years, plastic ones are retainable for approximately 10.

They also hold high recycling value when the time finally comes to take them out of service. This is a benefit to any company that’s concerned about being a good steward of the environment.

Versatility
Plastic pallets also offer more versatility than wood pallets. They’re lightweight enough for light-duty tasks, such as exporting, and rugged enough to handle heavy-duty material handling challenges.

Plus, they provide better dimensional uniformity than wood pallets. This makes them a more viable option for today’s automated warehousing processes.

Cost-Savings
Because plastic pallets outperform wood pallets in key areas, they save manufacturers money over the long run. The lightweight, durable construction protects manufacturers from costs associated with product damage, workplace injuries, and pallet maintenance.

They can also use plastic pallets in just about any environment to reduce shipping weights and save on shipping costs. Plus, the long service life results in an extremely low cost per use.

 

 

What Are the Types of Plastic Pallets?

Plastic pallets work well in a variety of material handling applications. Whatever your material handling challenge, there’s an industrial plastic pallet that will help you overcome it.

At Cherry’s, we offer a range of options with enhancements in durability, sanitation, and customization that are unattainable with wood pallets.

Stackable Plastic Pallets
Stackable plastic pallets are ideal for warehouses with limited space. They’re designed to stack one fully loaded pallet atop another, maximizing the floor space of your facility.

Stackable options allow for conveying and static storage. Available in various sizes and colors, they also make it easy to separate and organize products.

Edge Rackable Plastic Pallets
Food service and pharmaceutical warehouses will benefit from edge rackable plastic pallets. They enable the safe, convenient, and sanitary storage of loads in racks above floor level.

Molded from a more rigid material than stackable pallets, edge rackable plastic pallets are intended to store heavy products in a selective, drive-in, or push-back racking system.

Nestable Plastic Pallets
Are you looking for the most economical solution? Nestable plastic pallets fit inside one another, consuming up to four times less floor area than standard stackable plastic pallets.

Lightweight and easy to handle, nestable plastic pallets save space and freight dollars on return trips. They’re perfect for storing and distributing products within a distribution network or supply chain.

Plastic Solid Deck Pallets
Solid deck plastic pallets will help you maintain a clean working environment. The solid top consists of non-porous plastic, which won’t trap moisture or contaminants. They’re also free of gaps to prevent liquids from leaking and damaging other goods.

Constructed using materials approved by the USDA and FDA, solid deck plastic pallets are ideal for food, medical, pharmaceutical, and chemical manufacturing.

Plastic Export Pallets
Do you ship cargo one way? Plastic export pallets are a reliable, cost-effective method. Designed to meet international shipping requirements, plastic export pallets make shipping overseas easier. They’re completely recyclable and require no export documentation.

Plastic export pallets are available in nestable and stacking configurations, which maximize load capacity and floor space when they’re empty.

Plastic Drum Pallets
Plastic drum pallets allow manufacturers to store, stack, and move plastic and fiber drums securely and safely. Primarily used for storing and shipping liquid chemicals or petroleum products, plastic drum pallets prevent product loss during storage and accidental spills.

 

 

How to Switch from Wood to Plastic Pallets?

With an extraordinary demand for wood pallets and a limited supply, now is the time to transition to plastic. Making the switch now will keep your product moving while enhancing your supply chain’s safety, cleanliness, and profitability.

Here are a few important considerations for making the switch:

  • Needs Assessment: Assess your business requirements before deciding which plastic pallet you need. Which criteria are most important? Is it durability and longevity, hygiene and cleanliness, racking strength, or something else? Once you determine the most crucial factors, you can move on to sourcing.
  • Suppliers: Excellent plastic pallet suppliers offer a variety of options. For example, Cherry’s provides numerous models that can be customized to meet your exact specifications.
  • Pallet Testing: Before you place a bulk order of plastic pallets, test and evaluate different options to make sure they work in your facility. This process will help you assess the performance of each pallet against your desired criteria.
  • Insurance Coverage: Depending on your insurance policy, transitioning may require a change to your insurance coverage. Be sure to discuss idle storage requirements, burn rates, and M and UL standards approval with your local fire marshal and insurance provider.
  • Employee Training: It’s essential to involve your employees in the transition process. You’ll need to communicate about the transition process and how you plan to train them on your new equipment properly. Also, consider how day-to-day roles may change with the implementation of plastic pallets.

Read our blog for more details on how to transition from wood to plastic pallets.

 

 

Let Cherry’s Facilitate Your Transition to Plastic Pallets

The unprecedented wood pallet shortage doesn’t have to threaten your efficiency. Now that you know why plastic pallets are an excellent alternative to wood, let Cherry’s help with your transition.

Cherry’s is the leading provider of custom-engineered material handling solutions. We provide durable, hygienic, and cost-effective plastic pallets molded for your specifications. You can also count on Cherry’s for quality pallet-handling equipment, including plastic pallet washers, pallet dispensers, and pallet changers.

Browse our selection of plastic pallet solutions. If you need something more specific, contact us for a custom solution.