By: Mitchell Kamps
Over the last few years the pallet industry has been nothing but a roller coaster ride for both suppliers and customers served. It was not too long ago that there was such a core shortage industry-wide that we at Kamps spent nearly all of our time locating cores to keep up with our customers’ demand. After that, as the U.S. housing market rebounded a bit and there was an increased demand for wood in China, the softwood market skyrocketed. To undercut cost inflation Kamps switched many of our customers from pine to hardwood. However, there has been effectively no increase in capacity in the hardwood market since the beginning of the 2008-2009 Recession, and as a result hardwood prices have increased significantly. Professionals in the pallet business have never seen so many dramatic changes in wood costs and availability in such a short period of time.
Under these challenging and constantly shifting circumstances Kamps is striving to make sure our communication with our customers is second to none. The pallet supply chain consists of loggers, sawmills, remanufacturing operations, as well as pallet manufacturers, sales, and brokers. Most of our clients only see the tail end of that chain, so it is difficult to explain what we are experiencing in the supply market, but it would be natural for our clients to feel like they are being manipulated or taken advantage of, which is why it is one of our highest priorities to continuously educate on the current conditions of the wood market and provide them with a range of options to choose from, while still maintaining the same standard of service.
In this evolving market our most recent strategy has been to shift customers to pine decking, leaving the stringers as hardwood. It is, of course, paramount to maintain the quality of our pallet products while trying to minimize costs. Poor quality pallets cost our customers both logistically and in damaged product; so while the material that makes up our pallets may change with market conditions, the integrity of those pallets does not. That is our commitment to our customers.