Commerce moves on pallets. Those plastic or wood platforms, with side notches for lifting by forklifts, are essential for storing inventory, moving bulky items, and shipping products.
Following a spike in demand for pallets to accommodate the frenetic pace of shipping consumer goods during the pandemic, businesses have been steadily “working off inventory,” so pallet recyclers were looking for a rebound in 2024, according to Glen Meeks, Executive Vice President of the Western Pallet Association. Instead, pallet inventories continue to climb.
“Pallets are a bellwether of the economy,” said Meeks. “”When the economy slows, the supply of pallets can increase, causing pallet prices to fall; a good economy means more demand for pallets, and prices will increase.” However, he also noted the current glut could instead be due to changes in business practices. “Since the pandemic, businesses are going from ‘just in time’ inventory practices to ‘just in case’ inventory practices, so material is not moving as fast and as frequently,” he said.
Beatrice Vasquez, owner of Oxnard Pallet Company and former president of the Western Pallet Association, notes an especially painful surplus of plastic pallets. These platforms last longer and usually cost more than wooden pallets, but recyclers have fewer options when customers are not buying. “We can send the wooden ones to a grinder to be turned into mulch, and there have been times when we have been able to sell the plastic ones for recycling, but plastic prices are down, so we just can’t pick up large amounts of those for a while,” she said.
Vasquez is working on a deal with a large company in Oxnard that might change shipping practices to start reusing the plastic pallets generated by a large company in Thousand Oaks needing to regularly discard plastic pallets, but pallet companies are increasingly scrambling to put together deals like these.
Another option for plastic pallets could come from Berg Mill, a recycling and brokering company marketing many of the recyclables from generators and sorting centers in Ventura County. Daniel Marks, Berg Mill’s Chief Executive Officer, has previously worked with Oxnard Pallet Company and may be able to improve on previous offers. For the past few years, the cost of baling, loading, and shipping exceeded the value of this type of plastic. However, recently, a buyer in Malaysia offered to pay for 25,000-pound loads of pallets stacked tightly in shipping containers.
Pallet recyclers still pay up to two dollars per pallet to collect standard wood pallets, measuring 48 inches by 40 inches, but most have started charging to collect less desirable or broken pallets. Alco Pallets, in Oxnard, continues to pay for many sizes but discontinued collection services, accepting only dropped off pallets and excluding plastic pallets.
In 2020, the global pallet market was valued at $78 billion and was projected to exceed $110 billion by 2027, according to Robert Khachatryan, Chief Executive Officer of Freight Right Global Logistics. In an email exchange, he noted that hard economic times for the industry could cause some pallet companies to go out of business, and when the economics of pallet recycling improve, pallet business expansion and start-ups could take years to catch up. In the meantime, lack of convenient options may cause some with surplus pallet inventory to dispose what they cannot easily recycle.
The solution Vasquez hopes for is increased market demand for used pallets, and if that demand does not come from an improving economy, it must come from changes in business practices. With pallets currently selling for low prices, businesses regularly buying new should consider buying used pallets instead. Fear of broken parts or rusty nails is largely unfounded if buying from a reliable recycler, according to Vasquez. Her company does not just move pallets for reuse, she said, but instead pulls faulty stringers off old deck boards and remanufactures the pallets.
Even during times of surplus supply, contracting for separate collection of pallets is an important way to save natural resources and reduce landfilled waste. When collection by a pallet company for reuse is impossible, recycling wooden pallets is an easy alternative, but reusing or recycling plastic pallets requires additional effort.
David Goldstein
David Goldstein, an Environmental Resource Analyst with the Ventura County Public Works Agency, may be reached at david.goldstein@ventura.org or (805) 658-4312
More from David Goldstein
All articles from David Goldstein
Disclaimer
The opinions expressed here by David Goldstein and other columnists are their own, not those of Bioplasticsnews.com
Leave a Reply