Tips On Controlling Your Pallet Costs While Lumber Prices Continue To Skyrocket

Lumber prices are continuously rising due to unexpected demand increases and several mill closures, so here’s some expert advice from The Pallet Guys on how to keep your pallet costs under control.

Pallet truck on the highway.

The stricter stay-at-home and quarantine orders back in March, April and May due to COVID-19 lead to several lumber mills across the United States closing due to health concerns, and when recession fears didn’t come to fruition there ended up being an unexpected increase in lumber demand throughout almost the entirety of the pandemic. There are many reasons why lumber demand increased during the heart of the pandemic, and many economists have guessed that DIY housework and home renovation/construction played a significant factor.

The sudden pause in production earlier this year along with a sharp reduction in capacity utilization has created the perfect storm from a supply and demand standpoint. The lack of available lumber throughout the market has had serious implications throughout the entire economy, and this subsequently has increased the cost of pallets. Pallet costs are very reliant upon lumber prices, so it has inevitably made new pallets more expensive.

The Pallet Guys are experienced specialists that have developed into industry leaders, so we’ve seen several different spikes and dips associated with lumber prices throughout our many years as a pallet supplier. Our overall experience is what has helped us perfect certain strategies that help our clients keep their pallet costs as low as possible during lumber price spikes, and on this page we’re going to go over the following two best ways to help your business control pallet costs while lumber prices continue to skyrocket:

1. Utilizing Pallets With Lower Costs
2. Making The Most Of Dedicated Inventory Storage

1. Utilizing Lower Costing Pallets

Brand new pallets will always be our products that are most subject to market price fluctuations, and this is simply because new pallets are manufactured with fresh lumber. When a business completely or partially switches their pallet supply to any of the following pallet types, there are higher potentials for developing both short and long-term savings:

  • Remanufactured pallets
  • Recycled pallets
  • Combinations of new and used wood

We understand how there are many different business operations that mainly rely upon their pallets to not break throughout shipments and simply work as expected, and recycled pallets tend to fit these necessities perfectly. The Pallet Guys are experts at pallet recycling and our used pallet inventory is one of the best in the entire industry, so we’re more than confident that you’ll be able to find exactly what your company requires.

Recycled pallets tend to cost anywhere up to about 60% less than brand new pallets, and their weight capacity tends to be comparable to new pallets as well. Although the most commonly used pallet size is 48”x40”, it’s possible for our team to reconstruct used pallets within any size.

Combinations of new and used wood is also a good option for our clients as lumber prices continue to rise, because combo pallets will utilize a good mix of used and new materials to make costs significantly lower. Combo pallets also tend to have more accurate dimensions as compared to recycled pallets, and they’ll also have many of the exact same benefits of utilizing recycled pallets. One of those benefits includes lower costs!

Remanufactured pallets are completely made from recycled materials that have been repurposed/cut down from an original sizing, so this pallet type tends to be an affordable solution for companies looking for custom pallets. Most remanufactured pallets have been cut down from an originally larger-sized pallet, so most of them will come in smaller sizes than the standard 48”x40”. Remanufactured pallets are apart of what our experts specialize within, and we’ll always ensure that our remanufactured pallets are heat treated and properly dried.

It’s important for business leaders to fully understand how adjusting their pallet inventory by utilizing recycled materials will always lead to much lower costs, especially while lumber costs and demand continue to increase. There’s no denying that the current market rates of fresh lumber is more expensive than most companies are used to, so we highly recommend utilizing recycled/remanufactured materials to help you save costs during this current spike.

2. Making The Most Of Dedicated Inventory Storage

The general concept of dedicated inventory storage typically refers to a pallet supplier keeping a purchased order at their facility just in case there is a potential emergency order that needs to be efficiently expedited, and this purchasing strategy also helps businesses reduce their overall lead time when in need of custom pallets.

But dedicated inventory storage can also do wonders for businesses that want to front-load their overall pallet costs, because they’ll be able to produce their pallet supply ahead of time while prices are lower and safely store them until that supply is necessary.

We consider this a really good strategy right now, and this is mainly because there’s no telling just how long the current spike in lumber prices will continue to climb. So when you purchase your pallets at today’s market rate you can potentially save a lot due to lumber prices continuing to increase in the months ahead.

Our facility will also be capable of potentially accommodating multiple orders that our clients would like prepared ahead of time, and we consider inventory storage strategies as a great way for our clients to stay on top of the continuously rising costs of new pallets.

Reach Out To The Pallet Guys To Learn More About How We Can Help You Save On Your Pallet Costs While Lumber Costs Continue To Rise!

There’s no denying that it can sometimes be difficult to predict the future of the lumber market, but the above strategies are great ways for businesses of all types to reduce their overall exposure to lumber price fluctuations. When you reduce the overall amount of new pallets and materials within your inventory and utilize inventory storage strategies to lock in your expenses, your company can get a leg up on rising pallet costs and generally reduce the overall impact that the lumber industry can potentially have on your bottom line.

So reach out to us online or call us at 832-895-7555 to get in touch with our team of specialists who can answer your questions and concerns about how our team can help your business throughout the current demand increases within the lumber market!

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