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November-December-2018

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38 PalletCentral • November-December 2018 palletcentral.com The Amazon Effect on the Wood Packaging Industry A mazon and e-commerce, in general, have completely changed the shipping industry, and there are no signs of it slowing down. E-commerce will continue to evolve because of the way people shop and the demands consumers have, and so the shipping industry must adapt to survive. As Amazon continues to transform the shipping industry, and as more products are going out to consumers rather than being palletized, we wondered what effect this will have on our industry. Will it be delivery by drone? Not likely any time soon, according to the Department of Transportation (DOT): "Delivery by unmanned aircraft in dense urban environments presents significantly greater security, safety and privacy risks, and will take longer to develop." To gain some insight into the Amazon effect, we reached out to members. Here's what they had to say: "Online shopping will continue to grow, especially in grocery. Much of this growth will occur with "Click N Pick" where consumers order online and pick up locally. While "Click N Pick" will not impact pallet movements and volumes, continued growth in traditional online sales will not affect the number of pallets as much as it will affect where the pallets are generated. Online sales empty the pallets at the Distribution Center (DC) level without the need for a potentially damaging trip to the store." ~Mike Hachtman, Relogistics "Amazon produces a minimal NET effect on the pallet industry but has impacted brick and mortar DCs. All manufactured goods continue to ship on pallets to DC; we expect no change in the supply chain as manufacturers are not equipped to self- distribute." ~Al Cheponis, Pallet Consultants "Amazon makes it possible for smaller manufacturers to have market exposure. For example – we see small food manufacturers nibble into food giants' market share. Consumers are tired of "Big" anything – and so we might see more fragmentation at the manufacturing level—but the supply chain shortened. The internet has the potential to squeeze out distributors. This has the potential to bring smaller, new pallet customers to the market." ~Dorothy Hostetler, General Manager, PalletOne of Indiana "We'll see a reduction in new standardized pallets being made, other than for pallet pools. Expect to see more continued reuse and upcycling of pallets." ~Jorgelina González, Paleteras Unidas & Caribe Recycling (Puerto Rico) "We are very optimistic about our industry moving forward. Automation is a key element. Lots of changes afoot with companies like Amazon who make it possible for smaller manufacturers to have market exposure. It all remains to be seen. Wooden pallets will continue to play a huge role in the manufacturing and supply chain process." ~Keith Reinstetle, PalletOne, Inc. "Amazon is having a huge effect all over the country. We have not seen a major shift in what our customer base is doing because of Amazon, but clearly there is a shift going on as Amazon pulls more business away from traditional brick and mortar stores. Clearly fewer pallets will be needed as a link in the supply chain has been removed." ~Jeff Lewis, Atlanta Pallets

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