January WPA Meeting Roundup

WPA Meeting Roundup

By Chaille Brindley

A large group of pallet and lumber industry members gathered in Palm Desert, California for the annual Western Pallet Association meeting. Literally, one of the hot topics at the meeting was the current problems in California with suspicious pallet fires. Arson is suspected to be the cause in many instances. Commercial Lumber & Pallet (CLP) was recently a victim, and Kathleen Dietrich, the WPA president, spoke about her experience at CLP. She said that the situation could have been much worse. But fire safety procedures and a rapid response from the fire department made all of the difference.

None of CLP’s buildings were damaged in the incident. One of the reasons is that CLP has started putting stacks of lumber between stacks of pallets. This forms a fire break of sorts because lumber takes longer to get going than pallets do. Also, the company has created significant spacing between pallet stacks and structures.

A security guard spotted the arsonist and quickly called fire authorities to respond. Lighting around the perimeter, security cameras and security guards are all steps that companies in California are taking after a rash of suspicious fires over the last few years.

Other problems facing pallet companies in California are recent incidents of fraudulent orders and thieves steeling trailers full of pallets. In a few cases, security guards were overpowered and tied up because the assailants had fire arms. Security has become a major consideration for many pallet companies in California.

Another issue being discussed at the meeting was the impact of rising softwood lumber
prices. The main driver is speculation over what will happen if duties are placed on Canadian lumber sometime later this year. Several panelists agreed that the market seems to be trending upward. Other lumber brokers said in private that the big gains may have already happened until anything new breaks with the softwood lumber dispute or increases in Asian purchases. The general thought is that prices are likely to go up depending on what happens with duties.

Canadian and some U.S. industry leaders have raised concerns with U.S. officials about how previous NAFTA exempted categories could disrupt markets that are not central to the softwood dispute. Now, everyone is in a waiting game to see what will happen. U.S. officials could decide to exclude pallet kits, stringers and other previously NAFTA exempted items. If companies have the ability to do so, they may want to consider building some extra inventory to be able to withstand whatever the outcome is on Canadian duties, which could range anywhere from 20-50%.

Patrick Atagi of the National Wooden Pallet & Container Association (NWPCA) spoke on efforts by the associations to fight corrugated pallet initiatives aimed at wooden pallets. Specifically, he pointed to success in beating a bill in Oregon aimed at giving preferential purchase authority to corrugated pallets for state procurement. The bill was sold to legislators as good for the environment, especially climate change mitigation.
You can see the latest video from Blue Ox Pallet at https://goo.gl/KetZRk.

Atagi’s primary goal was to encourage the industry to realize its power if everyone works together. He also highlighted some of the ways to use new materials from the Nature’s Packaging initiative. If you haven’t checked out the website, you need to do it and download the logos and messaging to use in your marketing. You can find more at www.naturespackaging.com.

Ashley Delgado, a lobbyist working with the NWPCA on behalf of pallet and lumber issues, spoke on the latest developments in Washington as the Trump administration prepares to take office. Her basic premise is that we should expect the unexpected with Trump. Some key positions have yet to be nominated, especially the Secretary of Agriculture who will oversee the Forest Service, the Animal Plant Health Inspection Service and other key forest related agencies.

Key areas that will impact the pallet and lumber industries are Obamacare repeal, tax reform, and regulatory roll backs. Daniel Mitchell, a senior fellow at the CATO Institute, covered the economics of minimum wage laws. He suggested that Trump is a wildcard on minimum wage even though his pick to head up the Department of Labor (Andrew Puzder) has been very solid on the issue. Trump has been all over the map on the issue from supporting a $10 per hour federal minimum wage, to no change at all to allowing the states to decide. As Mitchell commented, the states are driving the issue now. Look for continued pressure on the local level for higher wages even if the federal government does nothing.

I spoke at the convention on Moments of Change, looking at key decisions that made success possible for a number of pallet and lumber companies. The key take away is that labor challenges are continuing. You need to get good people and resource them. Smart companies also need to look at automation and machinery to reduce the labor burden. While building and moving plans are necessary in many cases, you need to expect that it will cost 10-25% more than at first expected.
And finally James Ruder of L&R Pallet and Ryan Sterns of Atlas Pallets in Nampa, Idaho shared on how they have used innovative human resources approaches to handle labor challenges. Ruder has turned to Burmese refugees to help solve his labor problem. And he has developed a whole new approach to managing his people. You can read more online at https://goo.gl/SytyaZ.
The WPA meeting continues to be a great place to network, share ideas and hear from top speakers. Due to its smaller size and the WPA’s reputation for friendliness, the WPA meeting is a desirable place to come during the winter if you want to meet other pallet people.

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