Director of New Pallet Operations, Reed Esarove and Regional Director of Supply Chain – West, Marcus Blood discuss the key factors affecting the pallet market right now.
Factors Affecting Lumber Supply
“Some of the natural impacts that we’ve had over the last calendar year between tornadoes and hurricanes, fires on the west coast. That is gonna create some rebuilding efforts, gonna have an impact on, on lumber that will definitely impact our industry.” – Marcus Blood
“Not only did they devastate and destroy housing, but they also destroyed standing timber and, and that’s gonna take a little bit of time to, to grow back. Markets do not like ambiguity. At the moment, most markets have just in time inventory’s available, but this is slowly changing.” – Reed Esarove
What Regions Are Seeing Unique Market Activity?
“If you go back to the hurricanes last fall in the southeast, a good portion of our citrus and tree fruit and different things come out of that corridor that were hit by those hurricanes. And some of those crops were definitely impacted by the hurricanes as they came through. And that’s gonna change the availability of that produce really right now. And all that produce moves on pallets and it moves a lot of inventory into the interior of our country. So those are things that definitely will need to be watched over the coming months and how that’ll impact the flow of our pallets.” – Marcus Blood
“I agree with Marcus wholeheartedly. The general consensus in the industry is that in the coming months there’s gonna be pressure on inventories and pricing. Rising housing demand, as Marcus has mentioned, has been in the news for a very long time. And the ongoing shortage of houses in the US will will drive lumber demand significantly.” – Reed Esarove
How Can 48forty Help Customers Plan for and Respond to Volatility in Lumber Pricing?
“Our footprint that allows us to come together and talk about what’s happening in the different markets regionally as well as a whole in North America. When you add into that, we have a pretty extensive partner network. We have over 900 partners that we work with on top of our 73 facilities. Some of those are some of the largest lumber purchasers in the United States. Our ability to go talk with them and share what we’ve seen, as well as learned from what they’ve seen, gives us additional insight to what we’re seeing on that regional level to more of a national and international level.
So when you add into that our retail portion of our company, Relogistics, that has over 170 locations, and our customers docks at retail levels, I don’t, I just don’t feel like there’s anybody else out there that can pull together the footprint that we have and bring all those resources to the table when we’re trying to sit down and help our customers plan.” – Marcus Blood
“We can learn from our past experience, which is vast. We can apply that education and what we know today to tomorrow so we can advise our customers on what potential risks may be out there in their supply chain and what risks we can avoid.” – Reed Esarove
What Shifts Are Happening with Retail Trends and Consumer Spending Right Now?
“I think it’s gonna be a challenge to kind of predict and understand currently what’s gonna happen at the consumer level, at least for the next 60 to 90 days till we kind of see how some of those tariffs play out. Are they truly implemented? And what does it mean on the price at the end of the day for the consumer,” – Marcus Blood
“We’ll be watching for sawmill production, curtailments, the closings that have occurred in 2024 in sawmills across the United States, and that may still occur in 2025. And any changes in the harvesting ability from loggers.
We’re watching demand in global markets also, and the use of alternative products in housing, such as concrete and steel framing, engineered wood products and other substitutes that could affect traditional lumber demand in the past. What’s really exciting about some of the things that we offer from 48forty is the ability to bring our network to bear. We have the ability to build any size or type of pallet, whether it be new or a custom pallet, and, and we can do that across our 70 plus locations.” – Reed Esarove
For more market insights, contact our national sales team.