The Hardwood Market’s Balancing Act

Have you heard about the hardwood market struggles? The delicate balance between supply and demand is facing challenges that pallet suppliers across the U.S. are fighting to overcome. 

Over the past few years, China has started heavily importing lumber from the USA, pushing the demand. All lumber exported to Asia is required to be treated before transport, but last month, insects and/or pests were found at some of the Chinese ports. Now, China is turning away their logging ships or delaying them at the port until inspection and fumigation can be performed. In the meantime, you can expect log and lumber imports to China to struggle as they work out all issues.

This may help U.S. pallet companies, who have been struggling for some time with the shortage of materials as an extended winter prevented loggers from accessing wooded areas. The wet, rainy weather prevents their trucks from crossing over muddy areas, and in some cases frost laws still remain in effect due to these conditions.

When the raw materials finally are obtained, there is a significant shortage in trucking which can then prevent customers from receiving their pallets on time. Adding to the difficult trucking issue, fuel prices have continued to climb creating an even higher cost to receive a load, both for pallet manufacturers and customers.

All of these struggles combined facilitate a very difficult hardwood pallet market. The shortage in raw materials forces manufacturers to look further to find resources. The further a pallet company has to look to find lumber, the higher the transportation cost to receive those materials. The rising cost of gas only adds to that cost. Southern states are reporting relief from the weather and the ability to log more easily, but the Northeast continues to struggle with the high demand for pallets.

As June gets closer, the market should improve with the weather. Millwood is committed to finding and creating whatever is necessary for our customers, be it used, new or reconditioned pallets. As we head further into summer, we remain optimistic that as your unit load specialists, we can and will provide the tools you need to safely transport your product.