Despite efforts to find alternatives, wood pallets are still everywhere, comprising 93 percent of the entire world pallet market. They are just as prone to damage as ever, and when they've reached a point when they can no longer be repaired, disposal options are limited. In fact, many landfills are no longer willing to accept them at all.
In response, a growing number of pallet manufacturers are now turning to recycling to provide an environmental solution to the world's wood pallet problem. And for those who rely on wood pallets for shipping and storing their products, this new industry offshoot is providing an added revenue stream. Wood pallet recyclers pay between $1 and $3 for each pallet turned in for recycling.
"When we buy pallets back, we'll pay anywhere from 75 cents to about $3 each, depending on how good the condition they're in and how much business the company does with us," says Pat Sherry, general manager of Nepa Pallet and Container Co., Snohomish, WA, a company which puts out about 750,000 new pallets and 500,000 repaired or reconditioned pallets each year.
"There are literally thousands of factors that go into how much we buy back pallets for," adds Robert Wenner, president of Pallet Service Corp., Maple Grove, MN, a company which recycles roughly 400,000 to 500,000 pallets a year. "It really depends on the retailer, for example, and what kind of pallets he gets into his distribution center in the first place."
If you're still throwing used pallets away, not only are you missing out on some revenue potential, but you're actually wasting money. "It's way too expensive to put pallets into the waste stream," Wenner explains. "You pay your garbage haulers based on the size of your dumpsters, and you would need bigger dumpsters because [pallets] take up a lot of space."
And, it costs nothing to turn over pallets for recycling. Most recyclers will pick up used pallets at your store, plant or distribution center free of charge, though they usually require minimums of 100 pallets before making the trip. "We'll even have a trailer spotted at a customer's distribution center if we know there's a shipment coming in," Wenner says.
Pallet Service Corp. and Nepa are just two U.S. companies involved in pallet recycling. Of the 2,300 wood pallet manufacturers around the country, about two-thirds do some pallet recovery and recycling, and the industry is growing, says Bruce Scholnick, president of the National Wood Pallet and Container Association (NWPCA), based in Alexandria, VA.
"The pallet recycling industry is larger today than it's ever been in the past, mainly because the finished goods are far less expensive than new, and because lumber prices have gone way up these days," says Scholnick.
Recycling Extends Use
SMI Co., Cresco, IA, processes more than 3,000 pallets a week, putting them back into the market to be used again and again. "We utilize the same stringent quality control systems on our recycled pallets as we do on our new pallets. Our recycled pallets offer the same performance as our new pallets, but at a greatly reduced price," says a company spokesperson.
These pallet recyclers take in used wood pallets, repair any damage and resell them, usually for between 20 percent to 50 percent less than new ones. Pricing is generally based on the condition, or grade, of the pallet.
"Everyone is looking to get costs down, and you can pay $9 or $10 for a new pallet or $6 for an almost-new one," says Nepa's Sherry. His company sells brand new 48-inch-by-40-inch GMA pallets for between $8.50 and $10 each. Recycled pallets in great condition sell for between $5.50 and $6; lower-grade recycled pallets sell for $3.50 to $5.
Scott Shaw, president of Premier Pallets Inc., Tampa, FL, maintains the following grade scale for recycled pallets: