Pallet buyers tend to treat price movements as noise, or as evidence that their supplier is chancing it. Neither is usually true. Four inputs explain nearly everything, and understanding them turns a quote from a mystery into something you can plan around.
Input one: hardwood lumber, with a lag
New pallet prices track hardwood cant and board prices fairly directly. Recycled prices track them too, but with a lag and a damping factor: when new pallets get expensive, demand shifts to recycled, core prices firm up, and everything we buy costs more. When new pallets get cheap, the floor under recycled softens.
The lag is typically four to eight weeks in our market. If you watch hardwood indices, you can see a recycled price move coming before your supplier emails you about it.
Input two: core availability
This is the input nobody outside the industry sees. Recycled pallets are made of returned pallets, and returns are a function of somebody else's shipping volume. A slow quarter in regional distribution means fewer cores arriving at yards, which means graded stock gets scarce even though end demand has not changed.
It is why a recycled quote can rise in a week when demand is flat. The constraint is upstream supply of used wood, not downstream appetite.
Input three: diesel and distance
Pallets are heavy and low-value, so freight is a large fraction of delivered cost. A fifty-cent move in diesel is visible on a trailer-load quote. This is also why a yard forty miles away beats a yard three hundred miles away on nearly identical wood — and why we tell distant enquiries, honestly, to buy closer to home.
Input four: the weather
Rain downgrades wood. A wet fortnight in a region where most yards store outdoors removes graded stock from the market, because wet decks have to dry before they can be sold as dry decks. Our covered bays exist primarily for quality, but they also make our pricing less jumpy than yards that store in the open.
- Autumn is the firmest market: harvest, holiday distribution and construction all compete for the same wood.
- Mid-summer is usually the softest, which makes July a good month to build stock for a Q4 programme.
- Core prices and graded prices do not move in lockstep; one is supply, the other demand.
- Fixed-price quarters exist precisely because this is annoying. Ask for one.
When a price genuinely does not make sense
Three red flags. A quote materially below the regional market usually means a grade that will disappoint on arrival. A quote that moves between confirmation and delivery means the supplier never had the stock. And a quote that cannot be broken down into wood, handling and freight means somebody does not want you to see the freight.
Ask for the breakdown. Any yard that grades honestly will give it to you, because the breakdown is the argument for buying from them.
Written at the Meeks Blvd yard, St. Louis, and published on April 11, 2023. Markets and specifications move; if a figure here no longer matches what you are seeing, tell us and we will update it. Our model constants live on the Carbon Ledger.
How this was written
Drafted at the grading line from our own weighbridge records, line notes and customer correspondence. Figures quoted as ours are measured; figures quoted from the wider industry are labelled as estimates. Nothing here was written to rank for a search term, and we correct articles rather than quietly deleting them.
- Author
- Yard desk
- Published
- April 11, 2023
- Category
- Economics
- Reviewed
- Annually, with the model constants
- Corrections to
- sales@repalletshop.com
What to do with this
- Check the figures against your own invoices before acting on them.
- Ask us for the underlying scale tickets if you need audit evidence.
- Send the article to whoever owns your pallet spec — most of this is their decision.
- Disagree in writing. Several of these pieces exist because a customer corrected us.
How to cite
Yard desk, “Why pallet prices move — and when they stop making sense”, Repallet Shop, April 11, 2023. repalletshop.com/blog/why-pallet-prices-move