Plastic Pallets Stack Up Sustainability
What's in store for the pallet industry, and how will it affect retailers' sustainability goals? Jeff Pepperworth, president and chief executive officer at iGPS Logistics, a national plastic pallet pooling services provider, shares his outlook.
Q: What's the state of the plastic pallet industry at the moment?
Right now, the industry is robust. We see more demand than we have supply to fill, which is a great problem to have. Some pallet providers are turning customers away, or putting customers on allocation—meaning that they'll only provide a certain number of pallets at a time. In some cases, those companies are looking elsewhere for additional pallets to meet demand.
Some companies, such as Costco, are pushing toward an all-plastic pallet environment as part of their safety and sustainability goals.
Q: Why has sustainability become such a buzzword?
Business leaders are looking more closely at environmental, social, and corporate governance than ever before. Not only is sustainability ethically desirable—it has also become a business imperative. In manufacturing pallets, the focus on weight is a driver; by making them lighter than alternatives, we can cut down on carbon emissions.
Q: What role do plastic pallet makers play in some of the big sustainability efforts of major retailers?
Virtually every large retailer, manufacturer, and e-commerce provider has a strong sustainability focus in place, and pallet providers play an important role. For example, iGPS is working on a program with Costco that involves recycling pharmaceutical bottles into our pallets, which are recyclable and made primarily from post-consumer plastic.
Q: In what ways has the pandemic shaped the supply chain?
While some aspects of the supply chain have flourished, numerous facets of the industry will be slow to recover. Driver shortages and transportation challenges will persist for the foreseeable future. Material shortages are another concern; I recently visited an automobile dealership, and they had only 12 new cars on the lot. It's harder to get finished components to manufacturers right now.
Lumber costs are also a challenge for the wood pallet industry and suppliers who use them. In the spring, lumber prices hit a high of more than $1,600 per thousand board feet, an increase of more than 350% over the prior year. This creates opportunities for plastic pallet makers, but its ripple effects will be felt throughout the industry over several years.