Price volatility in the North American pallet industry has left pallet manufacturers, pallet traders and the manufacturing sector as whole struggling to navigate the market.
In September, Fastmarkets launched western softwood GMA Grade A pallet prices in six key delivered markets: Seattle, San Francisco, Los Angeles, Chicago, Dallas-Fort Worth and New York City. This price data and analytics service, the first of its kind in industry, can help any entity dealing with palletized cargo to understand how market shifts will impact their business.
Here, we take a look back on the first three months of price data to understand three key trends in the market and how these impact the price of pallets, an essential component of global supply chains.
The first edition of the pallet newsletter came as the Federal Reserve began its rate-cutting in September 2024, setting the stage for US housing starts to bounce back after July 2024 had the lowest housing starts since June 2020.
Overall, trends that dominated over the summer held as the bulk of unmodified or unenhanced GMA pallets in the Seattle market traded in an $11.00-13.00 per pallet range with premium GMA pallets trading in the $15.00-17.00 range. Over the course of September, market participants continued to report that those ranges remained in place for months.
Producers reported persistently underwhelming production of new softwood GMA A-grade 48×40 pallets with ample availability for prompt delivery. Some sources reported a slight uptick in agricultural sector purchasing and some specialty manufacturers noted a pickup following the rate cut decision. However, the new GMA pallet sector continued to lag. Most producers reported that they did not expect a significant change this calendar year.
In most key delivered markets, mills continued to struggle against ample availability of $5.00-7.00 “good to average” condition used pallets. Market participants reported that used pallet inventories were diminishing, but estimates of these inventories were wide ranging.
In October, the National Retail Federation projected a 3% increase in holiday sales from the year prior, one of the first indications of how busy the 2024 holiday season would be. The October edition of the pallet newsletter analysed how this outlook would impact the market amid an increasingly saturated market for used pallets.
Alongside the forecasted holiday uptick, western softwood US pallet manufacturers continued to face steep competition from alternative species and an oversupplied used pallet market.
Fastmarkets assessed pallets, western softwood, GMA A-grade delivered Seattle at $11.00-17.00 per pallet on October 30. This was unchanged from recent weeks. However, the other major market in the western softwood producing region, San Francisco, was another story.
Fastmarkets assessed pallets, western softwood, GMA A-grade delivered San Francisco at $10.50-16.50 per pallet on October 30. This assessment reflects a -$0.75 decline to the low and high of the previous range.
While local low-grade lumber prices have remained fairly stable for the last month, competition from alternative species and a competitive used market resulted in some manufacturers lowering prices. Good quality used B-grade pallets and excellent quality block pallets were offered from $8-10 in the downtown San Francisco area.
Although most producers did not report changes in their assessments of the market, comparable erosion in asking prices were observed in Chicago, Los Angeles and Dallas-Fort Worth, with comparable B-grade and off-spec pallets available at competitive prices below recent western softwood basic unmodified GMA Grade-A 48×40 pallet rates.
At present, there is ample availability of new western softwood pallets on the market for prompt delivery. Low-grade western softwood producers reported that while agricultural and manufacturing purchases have picked up slightly in the last month, they have encountered resistance from pallet producers who are hemmed in by current market conditions.
Further complicating matters, tightness in the green Fir market pushed more western softwood pallet producers to the dry market. This corresponded with reports from dry low-grade manufacturers who recently noted a slight uptick in sales volumes to the pallet sector.
The most recent edition of the newsletter followed the results of the US presidential election and President-elect Donald Trump’s tariff announcement, including insights into the lessons to be learnt from the fallout of Trump’s 2018 tariff increases.
Overall, western softwood US pallet manufacturers reported a seasonal uptick in demand as holiday retail sales picked up and buyers turned their attention to Q1 2025. Fastmarkets assessed pallets, western softwood, GMA A-grade delivered Seattle at $11.00-17.00 per pallet on November 27, unchanged from the previous month.
While producers benefited from an uptick in sales, recent pushback on prices due to the continued glut of used and lower-quality pallets stymied any significant upward momentum. The other major market in the western softwood producing region, San Francisco, also remained stable this month.
Fastmarkets assessed pallets, western softwood, GMA A-grade delivered San Francisco at $10.50-16.50 per pallet on November 27.
Competition from used and lower-quality pallets remained steep. Good quality used B-grade pallets and excellent quality block pallets were offered from $8-10 in the downtown San Francisco area.
Trading ranges narrowed in New York City and Dallas-Fort Worth as lower-priced Southern Yellow Pine hit the market.
Fastmarkets assessed pallets, western softwood, GMA A-grade delivered New York at $10.50-16.50 per pallet on November 27, a $0.75 decline to the low and a $1.75 decline to the high over the previous month.
Producers in these regions faced steeper competition from alternative grades in addition to lower-priced Southern Yellow Pine. Good quality B-Grade pallets were readily available at significant discounts, capping profits. Multiple producers reported switching to Southern Yellow Pine this month as it became more readily available.
In addition to the seasonal retail holiday spike, buyers reported that they are turning their attention to Q1 of next year. With a new administration and tariffs looming, numerous large pallet buyers decided to make extra purchases to prepare for an uptick as next year’s activity gets underway.
The first three months of pallet price data was influenced by the used pallet market, which has been in a state of oversupply in recent months. Competition from the used pallet market resulted in some manufacturers lowering prices.
The results of the US presidential election have also had a significant impact on market sentiment following President-elect Donald Trump’s announcement of planned tariffs for on imports to the US from certain countries.
Finally, holiday retail sales have continued to pick up over the last three months. The 2024 holiday season is shaping up to be the busiest since 2021, driven by record spending forecasts and a projected 3% increase in holiday sales from the year prior, according to the National Retail Federation.
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