Wood Pallets and Skids

SIC 2448

Industry report:

This classification covers establishments primarily engaged in manufacturing wood or wood and metal combination pallets and skids.

The manufacture of wood pallets and skids was the largest segment of the wood container industry in the late 2000s. Pallets are made of platforms that are specially designed to allow heavy crates and boxes to be easily moved by forklift. Pallets play an important role in the shipping, handling, and storage of a huge variety of materials in an equally vast array of industries. The biggest pallet users are the food, steel and metal, paper and printing, and chemical industries. The most common pallet produced is the flushed stringer, double-face, nonreversible type measuring 48 by 40 inches, which is most often used by supermarkets.

Hardwood lumber, such as oak, was used for 67 percent of the wood in pallets in the early twenty-first century. Manufacturers used a total of 4.41 billion board feet of hardwood lumber for pallets. Other wood materials used included stumpage, logs, and cants. Waste materials were sometimes used by pallet manufacturers to make fuel wood, bedding, pulp, or charcoal, among other products.

Since the 1980s, technology has played an increasingly important role in the pallet and skid industry, contributing to both production and design improvements. Most pallet manufacturers still used hand-held nailers and semi-automated equipment in 1980. By the 1990s, however, fully automated assembly systems allowed two laborers to put together 1,200 pallets in a day, at least four times the rate of production that hand nailers allowed.

The vast majority of pallets and skids produced in the United States are made of wood. The remaining pallets are made of wood composite, cardboard/corrugated, metal, plastic, or other materials. In 2000 about 429 million new wood pallets and skids were manufactured in the United States. Used and/or repaired pallets added an additional 233 million to this total. Per-firm annual production of pallets in the United States doubled between 1980 and 1995, and by 2000 the average daily production of new and used wood pallets per firm, per shift, totaled 1,337. The industry was operating at roughly 58 percent of its capacity that year.

Computers also had a major impact on pallet design since about 1980. In the mid-1990s, a computer-assisted Pallet Design System enabled manufacturers to better analyze the pallet needs of a particular product and to build pallets specifically tailored for that product. For example, a company dealing in a fairly light commodity could save money using pallets made from softer, less expensive wood.

By the 1990s the pallet industry had incorporated recycling. More than 40 percent of all firms used some recycled pallets during production in 1995, with an average of 131,500 recycled pallets used annually per firm. Recycling became a more common low-cost option for wood pallet companies as competition from nonwood pallet producers increased. The wood pallet industry responded to this challenge with the development of "enhanced pallets," which are more resistant to fire and rot than conventional pallets. There also was a trend toward producing multiple-use pallets, which could be leased by customers and returned when worn out. Fueling the growth of recycled pallets in the early 2000s was an increase in the cost of raw materials. In 2003 alone, hardwood pallet raw materials costs jumped 11 percent, pushing hardwood pallet prices up 4 percent.

According to the U.S. Census Bureau, 2,909 establishments operated in this category in 2007, down only slightly from 2,924 in 2004. The value of industry shipments rose from $5.7 billion in 2005 to $7.2 billion in 2007. Employment figures also increased, from 50,674 in 2004 to 58,467 in 2007. Eighty-one percent of employees were production workers. According to Dun and Bradstreet's 2009 Industry Reports, Texas, California, and Ohio employed the most people in the wood pallets and skids manufacturing industry. Ohio had the highest percentage of the nation's sales, followed by California, Texas, North Carolina, and Georgia.

Research and Markets reported that revenues for the wood container and pallet manufacturing industry in the United States reached $6.3 billion in 2008. Unlike many sectors of the U.S. manufacturing industry, this category was not struggling with decreases in production or gluts of imports from overseas. The United States exported $254.5 million worth of products to 119 countries in this category, whereas imports from 71 countries were valued at only $500,000.

Industry leader PalEx Inc. of Houston, Texas, merged in 1999 with Munich, Germany-based International Food Container Organization (IFCO). PalEx manufactured, recycled, and rented wooden pallets from its 71 facilities in 23 states and seven Canadian provinces, while IFCO supplied 50 million collapsible, reusable plastic produce containers to 15,000 supermarkets in 15 European countries. The combined company, named IFCO Systems, allowed PalEx to expand its pallet business into Europe and IFCO to expand its plastic container business into North America, setting the foundation for the combined firm to expand into Latin America and Asia. By 2004 the former PalEx business was operating as IFCO System North America, a division of IFCO Systems, which reported overall revenues of $735.9 million in 2008, up 6.3 percent from the previous year.

Several trends were expected to continue to affect the wood pallet industry in the second decade of the twenty-first century. In addition to growth in recycling and leasing pallets, and the use of nonwood materials, producers were expected to continue automating the design and manufacturing process. According to Material Handling Management, U.S. demand for pallets was predicted to reach 1.5 billion units by 2012, but wood pallets continued to come under scrutiny. For example, iGPS Company, a manufacturer of plastic pallets, called on the Food and Drug Administration to investigate the dangers of wood pallets. Bob Moore of iGPS told Refrigerator Transporter in August 2009, "Wood pallets may present a serious risk to America's food supply. The over 1 billion wood pallets in circulation in the United States are a breeding ground for harmful bacteria and carry other undesirable substances that can cross-contaminate food." Nevertheless, food processing and distribution companies continued to use primarily wood pallets, although according to marketing firm Orbis, the use of plastic pallets was increasing at a rate of about 4 percent annually.

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News and information about Wood Pallets and Skids

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Telegraph - Herald (Dubuque); January 4, 2018; 373 words
...damage in the fire, Stephan said, but it is too early to place a cost estimate on the damage.Addoco manufactures wood pallets and skids, crates, banding tops and shipping cradles in both hardwood and softwood, according to the company website...
Price/cost/demand roundup.(equipment and supplies)
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Plant Engineering; April 1, 2002; 700+ words
...SIC 2992) industry and the wood pallets and skids (SIC 2448) industry were...Industry SIC Oct 01 Wood Pallets and Skids 2448 0.51 Polishes and Sanitation...Industry Jan 02 Costs are... Wood Pallets and Skids 0.42 rising Polishes and...
Price/cost/demand roundup.(industrial equipment and supplies)(Illustration)(Statistical Data Included)
Plant Engineering; July 1, 2002; 700+ words
...Industry SIC Jan 02 Wood Pallets and Skids 2448 0.42 Polishes and Sanitation...Industry Apr 02 Costs are... Wood Pallets and Skids -0.74 stable Polishes and...Industry Grade Jan 02 Wood Pallets and Skids C -5.39 Polishes and Sanitation...
Valve makers win in margin game.(Statistical Data Included)
Plant Engineering; July 1, 2001; 700+ words
...demand roundup Industry SIC Wood pallets and skids 2448 Polishes and sanitation...ENDING... Industry Jan 01 Wood pallets and skids 0.08 Polishes and sanitation...Industry Apr 01 Costs are... Wood pallets and skids 0.33 Stable Polishes and...
Price/cost/demand roundup.(Illustration)
Plant Engineering; October 1, 2001; 700+ words
...Industry SIC Apr 01 Wood pallets and skids 2488 0.31 Polishes and sanitation...ENDING... Industry July 01 Wood pallets and skids 0.54 Polishes and sanitation...Industry Costs are... Grade Wood pallets and skids Falling A Polishes and ...
Sell Your Old Pallets, Buy Recycled Ones
Rock Products; August 1, 2016; 700+ words
...Pallet Exchange (APE) is a full-service wood products company that specializes in manufacturing new and recycled wood pallets and skids in either pine or hardwood species. The company also designs and manufactures custom wood containers and dunnage...
Price/cost/demand roundup.(Statistical Data Included)
Plant Engineering; April 1, 2001; 700+ words
...Industry SIC Oct 00 Wood pallets and skids 2448 0.02 Polishes and sanitation...Industry Jan 01 Costs are... Wood pallets and skids 0.08 Falling Polishes and...Industry Grade Oct 00 Wood pallets and skids A+ 3.33 Polishes and sanitation...

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