Issue link: http://palletcentral.uberflip.com/i/1390499
18 PalletCentral • July-August 2021 palletcentral.com Dorian Orellano Pallet Sales, Design & Production B&B Albany Pallet Company Headquartered in Central New York, B&B Albany Pallet Company is located at the heart of the highest lumber cost region in the nation. Cant costs in the weekly publication Pallet Profile (published 6/4/2021) have reached 800/M in the Mid-Atlantic region. The intense demand in all areas of the wood packaging industry have led to never-before-seen prices. Labor shortages in the repair side of the market have pushed many recycled pallet customers to seek alternative solutions. Some pallet pools have put most of their customers into an allocation program, creating an incredible amount of strain on the new pallet manufacturers. To help meet this demand for loyal customers, many new manufacturer pallet companies have branched out, looking for additional imported Canadian precut stock. This surge in demand for Canadian precut has created an auction- like atmosphere, changing what was once a cheap alternative to high-density North Eastern Hardwood into a premium commodity. All of this, in conjunction with the increased new home construction and home renovation projects, has put unprecedented demand on all wood species. Loggers are faced with increased demand on hardwood and softwood and are struggling to keep up. Today, we are consistently turning away customers and pallet orders due to the lack of stable raw material supply. Our speculation is that we may see a return to normalcy in late Q4 2021 but considering the supply chain bottlenecks occurring throughout the world, this may persist into mid-Q1 2022. This has been an unprecedented year, and no one knows what the future holds, but the market will need some time to adjust and hopefully soon after we will see some relief. Bryan Kesting Vice President of Sales Madison County Wood Products There seems to be a lot of panic going on. Demand has picked up and supply is limited, causing major disruption in the supply chain. It is difficult to find people and you see "Help Wanted" signs everywhere. Paying people that can work not to work was a poor decision. We are totally integrated for about 75% of our supply. It is the 25%, relying on sawmills and cut stock suppliers to fill those other needs. Chasing that 20% due to limited supply has resulted in a bidding war for raw material. It started when the KD pine market heated up, putting pressure on whatever hardwood lumber was available. Lack of putting new rental pallets in the pool due to the price of KD pine lumber had to be another contributor to putting pressure on the hardwood supply and pallet recyclers. We are doing our best to keep our long-term customers in supply. There can be delays due to supply chain issues and outside trucking that we have no control over. Due to the volatile market, we are looking at pricing monthly, communicating with customers and adjusting appropriately. Price has nothing to do with our ability or inability to do more. We are not chasing temporary high-priced orders. I believe the market will swing with the price of softwood. I am of the opinion it started there and will retreat in some manner at some point in time. I feel we are going to see much of the same at least until late third or fourth quarter and maybe all year. If demand and prices stay high, the whole dynamics of pallet manufacturing might be different in the future. "To help meet demand for loyal customers, many new manufacturer pallet companies have branched out, looking for additional imported Canadian precut stock." – Dorian Orellano