Economy, Changes in Business Practices Create Challenges for Pallet Market

A softening pallet market has created a challenging environment for pallet producers and recyclers, even as the economy seems to be stabilizing. Changing approaches to business and slowing demand is leading to an increasing inventory of pallets with buyers shopping prices.

At TriCounty Pallet, our goal is always for stability in a predictably cyclical economy. Several issues are contributing to the changing pallet industry.

Supply and Demand

The booming pallet market of 2021 was driven by a high demand for shipping during the pandemic that resulted in an historic pallet shortage. Pallet companies quickly worked through inventories and watched prices climb until spring of 2022, when demand slowed and prices began dropping back to more normal levels.

While businesses were expected to work through inventories and seek out additional pallets, that demand has not occurred. Vendors have used discretion in their pallet purchases, looking at options for new pallets and shopping prices.

Economy Growth

The pallet industry is a great predictor of economic health. A strong economy increases demand and prices for pallets, while a slow economy usually leads to a glut of pallets and falling prices. The economy is showing growth but at a slower pace than expected, causing economists to adjust predictions and businesses to temper activity. Higher interest rates are not expected to change as the federal reserve attempts to curb inflation.

Business Practice

Many businesses are not moving products at the level they were a year ago, as the boom in ordering that occurred during the pandemic has tapered off. Working in a backfilling capacity rather than just-in-time means less frequent shipments and sometimes in smaller quantities.

Cost of Doing Business

Even as the economy improves, businesses continue to deal with a labor shortage, demand for higher wages, higher facilities costs, increasing energy costs, and higher transportation costs. So, while supply chains are improving and demand for goods remains strong, a lower-than-anticipated GDP growth rate has most businesses thinking carefully about how they spend.

TriCounty Pallet Can Help

Recycled wood pallets continue to be the best choice when moving product from one point to another. Consider the advantages of working with TriCounty Pallet:

• No fear of broken boards or loose fasteners — our used and recycled pallets are inspected, cleaned, repaired, or rebuilt.
• Recycle worn pallets and acquire replacements — drop off at our facilities or use our on-site collection trailers.
• Go green — our recycling program keeps pallets out of landfills and turns scrap into quality mulch for local landscapers.

Even in a changing business environment and a cyclical economy, TriCounty Pallet is your constant for your pallet needs. Contact our team today to learn how we can help your business thrive.