palletcentral

Pallet C e nt ral • No vem be r-D e cem be r 2 0 26 1 9 G rowth can create new revenue while quietly weakening the business underneath it. More volume means more inventory, overtime, transportation, and working capital. If those pressures are not managed, sales can increase while margins and service deteriorate. Members named customer relationships and margins as what they most want to protect in 2027, each cited by about half of respondents, followed by cash flow, workforce, raw material supply, and capacity. Protecting them requires discipline around where resources are being lost: • Material: Improve lumber yield, reduce avoidable scrap, and review designs that use more material than the application requires. • Movement: Reduce unnecessary handling, forklift travel, staging, and repeated movement between production steps. • Downtime: Shift from reactive repairs toward preventive maintenance where practical. • Labor: Identify overtime, rework, manual data entry, and repetitive tasks that can be simplified or automated. • Transpor tation: Review routing, truck utilization, unnecessary miles, and the true cost of serving individual accounts. • Insurance: Review coverage regularly, and treat safety as a cost lever that can lower workers' compensation premiums. Labor, transportation, and insurance were the costs members most often targeted. Stephanie Beck of Heritage Pallets of Georgia is exploring moving all of its trucking to a third-party logistics provider "because the cost of insurance and transportation keeps climbing significantly." Wood waste also came up, both as a disposal cost and as a revenue opportunity through recycling. e goal is bigger than cutting spend; it's removing costs that aren't adding value. Pallet design is a good example. Optimize: Defend The Fundamentals By Removing Waste Reducing material should never compromise safety or performance, but overdesign adds material, weight, and cost without adding value. Cost control is only half of the margin equation. Members were just as direct about pricing. Tim ompson of Valleywood Industries offered blunt advice to fellow leaders: "Increase the prices that you charge." David Rodriguez of Chicago Pallet Service believes the industry undersells itself: "Help customers understand the value a pallet provides their company." Others urged peers to pass rising fuel costs through, to avoid chasing cheap orders, and to know their true cost on every pallet. e same discipline applies to customers. Revenue alone does not show whether an account is healthy; delivery patterns, service requirements, production complexity, and payment terms all shape its real value. Heading into 2027, leaders should know which customers, products, and processes generate sustainable value, and which consume resources without an adequate return.

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