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20 Pallet C e nt ral • May -Ju ne 2 0 25 O regon continues to lead the nation in softwood lumber and ply wood production, supplying essential building materials, including pallets. Producing over 6.1 billion board feet of lumber each year, the state accounts for about 16.5% of the nation's total output. As the wood industry enters a pivotal 2025, projected revenues of nearly $127 billion highlight both the opportunities and challenges ahead. Rising costs, workforce shortages, climate risks, and technological disruptions are reshaping the landscape. By adopting innovative strategies, proactive planning, and robust risk management, pallet manufacturers can navigate these complexities successfully. 5 Key Risks To Watch In 2025 Although 2025 presents new opportunities, many familiar challenges persist. Below are five critical risks and the strategies to address them: 1. Increased Climate-Related Disrup ons Extreme weather events, including wildfires and storms, continue to threaten operations and infrastructure. With billion-dollar climate disasters on the rise, resilience is no longer optional. To reduce vulnerability, companies should implement enterprise risk management strategies that include climate adaptation, catastrophe modeling, and continuity planning. Insurers increasingly reward such efforts with improved policy terms. 2. A Rise In The Costs Of Labor, Energy, And Materials Inflation and volatile energy prices are expected to challenge the wood industry's profitability in 2025. Supply-demand imbalances further compound these cost pressures. To stay competitive, companies should adopt advanced cost-control measures, such as optimizing cash flow through inventory management systems and partnering with specialized insurance brokers to secure industry-specific coverage. 3. Labor Shortages Attracting and retaining talent remains a pressing issue, as physically demanding roles struggle to appeal to younger workers and competitive wages are no longer enough to close the gap. Forward- thinking companies are leveraging data to create personalized benefits, fostering positive workplace cultures, and investing in training and wellness programs. Automation and AI are also becoming vital for streamlining repetitive tasks, though initial costs and technical hurdles require careful planning. 4. Increased Safety Risks And Workers' Compensa on Claims Wood product manufacturers and especially the logging industry consistently rank as one of the most hazardous professions in the United States, with a fatal injury rate of 82 per 100,000 workers annually. Oregon's comprehensive OSHA logging standards serve as a benchmark for reducing risks for wood product manufacturers. RISK 5 Strategies For Growth And Resilience In The Wood Industry In 2025 BY PAUL QUANDT, CIC, CFPS, CLCS Editor's Note: While Oregon is a leader in wood produc on, the challenges outlined—wildfires, rising costs, safety risks, and labor shortages—affect the en re industry. With recent East Coast wildfires, these insights are vital for businesses na onwide preparing for 2025.

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