Pallet Shortages Experienced Throughout Supply Chains
After nearly 15 months since the start of the COVID-19 pandemic, supply chains have experienced a wide array of hurdles to overcome. From medical materials to food products, consumer goods, labor, and more, it has been challenging for manufacturers to maintain supply to meet increasingly high demands at various points over the past year. The next domino to fall in this trend comes with a shortage in the wooden pallet supply, critical for shipments across the US and globe alike.
Pallets are essential to not only the corrugated supply chains, but to all manufacturing and retail supply chains across the board due to their relative low cost, versatility, and the protection provided during shipment. So, what is exactly driving these shortages? Similar to paper, lumber, and many other commodities, a continual increase in demand, compared to supply, is the main contributing factor. According to a recent article on SupplyChainDive, “Demand for pallets stems from retailers and grocers restocking their distribution and fulfillment centers, as consumers continue to spend on goods rather than services.” As the corrugated industry has seen consumer behavior drive an increase of box usage over the past year, particularly in the eCommerce industry, a similar trend is occurring with retail and distribution channels . Additionally, there is greater competition (and therefore cost) for raw materials, as well as continued labor shortages, creating a perfect storm, so to speak. Due to these factors, the price of lumber in the US has shot up by as much as 377%, which is the fastest rise since the post WW2 housing boom, and lead times have increased significantly.
We recently had the pleasure of catching up with Marla Harrington of Heritage Pallets, a large-scale pallet provider for the Southeast region out of White, GA. According to Marla, “Orders that used to take 2 to 3 days to receive from the mills, now take 2-3 weeks.” As with corrugated, the lumber and pallet industries are seeing significantly extended lead times as well. Additionally, Marla stated that a combination of labor, material, and driver shortages across the industry are all forces affecting these supply challenges to coincide with consistent lumber price increases in recent months. Many lumber mills have been trying to play catch up from the COVID-19 pandemic, similarly to the corrugated paper industry.
Heritage Pallets is a family owned and operated full-service pallet manufacturing company offering new, recycled, custom build and heat-treated pallets for the entire metro Atlanta area, North Georgia, and parts of Tennessee and Alabama. We greatly appreciate Marla for her time and insight and recommend reaching out to Heritage Pallets if you have needs in their coverage areas.
While we continue to experience challenges across our industry, many a direct result of the pandemic, the Rusken team is working hard to mitigate any supply shortages to meet our customers’ demands. We continue to increase our resources within our in-house pallet manufacturing network to enhance capacity, hold larger safety stock, and optimize our sourcing channels. At the end of the day, our number one priority is to serve our customers with high-quality corrugated packaging solutions.
We are hopeful that this additional challenge with the pallet shortage will improve in the coming months, providing a little breathing room for all supply chains, however, we will continue to keep our customers apprised and their needs prioritized as we all continue to work together.
Questions? Reach out any time, we are here to help.
About Rusken: Rusken is a dynamic, modern integrated packaging company with locations throughout the Southeast United States. With fourteen (14) facilities in seven (7) states, Rusken is a forward-looking regional organization. Headquartered in Cullman, Alabama, Rusken has experienced exponential growth over the last decade. This success is driven by an entrepreneurial spirit, focus on family-based values and a commitment to a truly remarkable customer experience. From standard corrugated boxes to highly customized packaging solutions that require robust design-work, colorful printing and hand finishing, the good people behind the Rusken name are passionate about quality, delivery and customer smiles.