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Western Magazine for WPA Members October 2020
MagazinePallet
PECO Sale AnnouncedWPA Annual Meeting InformationPallet Foundation News
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4 WESTERN PALLET
Housing and Fuel Update
The latest information from the U.S.Census and the Energy InformationAdministration.
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North American SoftwoodPrices
Prices listed as of August 19, 2020,courtesy of NRCAN.
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2021 WPA Annual Meeting
Information Find out more about the upcoming2021 WPA Annual Meeting.
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Do you have news stories to share?Contact Rick LeBlancEmail: [email protected]
W P A M A G A Z I N E
PresidentVice-PresidentSecretary/TreasurerPast PresidentExecutive VP
Beatrice VasquezScott GutierrezRalph RupertAnnie MonteyDave Sweitzer
WPA EXECUTIVE
DIRECTORS
Caroline Beach-SkinnerSukhi BrarJorge ErozaBaxter GladdenSteve MazzaJay Van Loon ASSOCIATE DIRECTORS
Ryan GreenwoodTod KintzDerek SampsonJason Saunders Please direct inquiries about the WPA toDavid Sweitzer, Executive Vice-PresidentP.O. Box 1095, Camas, WA 98607Ph. 360 335-0208Email:[email protected]:www.westernpallet.org
www.westernpallet.org
Environmental Product
Declaration An update on the EPD project forwood pallets.
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Other Features 20 Pallet Foundation Announces New Website and Logo 21 PECO Pallet, Inc. to be Acquired by Alinda Capital Partners and USS 23 Lumber Prices Continue to Free Fall 25 Wood Products Company Cited after Fatal Incident 26 Transparent Wood Could Be the Window of the Future 28 European Softwood Lumber Exports Continue to Expand 29 Other News 30 Social Media 32 Advertising Sponsors 32 Membership Drive 33 Upcoming Events
Cover StoryFind Your Plus!
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North American Softwood Prices
Weekly softwood lumber ptices to October 21, 2020 are shown below, sourced at http://www.nrcan.gc.ca/forests/industry/13309. Softwood Prices
WPA Welcomes New Member The Western Pallet Association is pleased to introduce the following new
OCTOBER 2020
Bill HenniganNarrow Gate ResourcesPO Box 342Rawlings, MD. 21557Ph: (706)513-0535Web: www.narrowgateresources.comEmail: [email protected] Sponsor: Beatrice Vasquez, Oxnard Pallet and Jay Van Loon, J&B Pallet
OCTOBER 2020
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OCTOBER 2020
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Housing and Fuel Snapshot
Diesel Fuel: dollars per gallon,as of October 19, 2020.. Source: https://www.eia.gov/petroleum/gasdiesel/
OCTOBER 2020
Membership DriveThis year's membership drive isalready in motion.
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OCTOBER 2020
The wood pallet industry is dedicated toenvironmental sustainability and now hasthe science to prove it. We finally have thedata to back up what we’ve known allalong - that wood packaging is a leader inenvironmental stewardship. With theNWPCA’s recent release of theenvironmental product declaration forwood pallets, the sustainability of palletshas been independently, third partycertified. This environmental product declaration ismuch more than just another valuable toolin our toolkit. Environmental productdeclarations (EPDs) are fast becoming theworldwide standard for comparingmaterials and products for theirenvironmental impact. To develop usableEPDs for the wooden pallet, the PalletFoundation funded a research projectwith the USDA Forest Products Lab. Thereport is the accumulation of over twoyears of data collection and numbercrunching from USDA researchers. It is thefirst of its kind for a product in thedistribution packaging space. The first step and foundation of any EPDis a life cycle assessment (LCA). The LCAfor our industry began with a survey,quantifying the environmental andenergy costs for 20% of the annual
production of wood pallets (by volume) inthe country. The LCA shows us the impactsof a wooden pallet’s product stages ofgathering, transporting andmanufacturing raw materials, the use andrepair of the pallet, and its end of lifeusage. According to the research conducted bythe U.S. Forest Service ProductsLaboratory and certified by UnderwritersLaboratory (UL), “When considering its lifecycle, wooden pallets can have a potentialnet carbon positive impact. Through theunique properties of wood, carbon offsetsmay be achieved by the reuse of palletmaterials and substituting wood fuel frompallet waste (ex: unusable pallets) fornatural gas.” This means that the use ofpallets, believed by many to be harmful tothe environment, can actually benefit theenvironment in the long term. AlbertoUggetti, vice president and generalmanager of UL’s environment andsustainability division, further explainsthat “the reusable nature of woodenpallets makes them a more circular,sustainable form of reusable packaging,and with this EPD, manufacturers will beable to communicate the impacts of theirproducts with more transparency andconfidence.” (Cont'd on Page 18)
The Pallet Foundation Project Focus: Environmental Product
Declaration
Grace Johnson, NWPCA Manager, Policy and Public Relations
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(Cont'd from Page 17)This type of report is invaluable tomembers of our industry as it helpspurchasers better understand ourproduct’s sustainable qualities andenvironmental repercussions, allowingthem to make a more informed productselection. As competition heats up forcompanies at all levels to meetsustainability goals within their supplychain and beyond, choosing woodenpallets is a simple, yet impactful piece of
the puzzle. Working hand-in-hand witheco-friendly warehouses, green logisticsand other emissions-reducingtechnologies, wooden pallets move theneedle when it comes to making thesupply chain both more sustainable andefficient. The full wooden pallet EPD,including its methodology and data, alongwith the corresponding LCA can be foundat www.palletcentral.com/epd.
I’m proud to be back in the Pallet businessOnly this time with French Oak!
Representing LERNER PROJECT wines— the lead board of wines!
Already serving many WPA members with unmatched wines and customer service.
Jeff Calavan, Private Client Specialist • 541 525-3724 or [email protected]
www.lernerproject.com
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Pallet Foundation: New Logo andWebsite Embody Vision and Mission
The Pallet Foundation has announced arebranding that includes a new logo andwebsite. The website design allows usersto quickly find the latest research projectsresults, from the landmark LandfillAvoidance Study and Economic ImpactStudy to the upcoming release of theEnvironmental Product Declaration forWood Pallets. “The timing was right. With theEnvironmental Product Declaration, wedecided to update our brand to clearlyshare our vision, demonstrate ourunwavering commitment to the woodenpackaging industry, reinforce theenvironmental attributes of woodenpallets, and advance safety throughout thesupply chain,” commented Bob Wenner,Chair of the Pallet Foundation. “The new logo and colors, connect thesustainability element to the product thattruly moves the world — the woodenpallet. Color is an essential feature thatdefines a brand image. We chose warmcolors that connect the product with theenvironment,” commented BrentMcClendon, Pallet Foundation Secretary. “It was important for us to makeinformation regarding our projects easilyaccessible for our current and prospectivedonors. Our goal with the website is toprovide our visitors with a user-friendlyexperience to learn about the work of thePallet Foundation, and to browse
information based on their own choice,”added McClendon. “Our projects page isonly a sampling of our work these past fewdecades, and further demonstrate ourcommitment to advance this industry.” The projects page also explores eachundertaking of the Pallet Foundation andits critical role in the wood packagingindustry. The new website also includesfundraising activities under the Eventspage and donor recognition. “We are better positioned to advance theindustry because of the tremendoussupport of our donors,” added Bob Wenner,Chairman of the Pallet Foundation. “We arevery excited about the new projects to beannounced in the following weeks.” The Pallet Foundation stays focused onresearch, education, environment, andtechnology advancements remain as aforerunner. The new website is accessibleat www.PalletFoundation.org. The Pallet Foundation is proudly supportedby the Western Pallet Association.
OCTOBER 2020
PECO Pallet, Inc. to be Acquired byAlinda Capital Partners and USS
PECO Pallet, Inc., one of North America’slargest providers of pooled rental palletsand services to the foodservice, groceryand consumer products industries, hasannounced that a definitive agreementhas been reached for PECO to be acquiredby U.S.-based Alinda Capital Partners andUSS, a leading pension fund for the HigherEducation sector in the United Kingdom. The transaction is expected to be
concluded within the next two weeks.Details of the transaction were notdisclosed. Alinda is a global independent investmentfirm focused on mid-marketinfrastructure assets that provideessential services. Alinda has holdings in(Cont'd on Page 22 )
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infrastructure businesses in 38 of the 50United States, as well as in Canada, theUnited Kingdom, and continental Europe.Alinda-owned businesses serve over 100million customers annually. USS is the largest private pension fund inthe United Kingdom with £75 billionunder management (as of August 2020).It has over 400,000 individual membersworking at more than 340 highereducation institutions. It also investsextensively in infrastructure such asports, utilities, and green energy. “Alinda and USS are among the world’smost successful investors ininfrastructure businesses which providethe foundation for economic growth,”said Joe Dagnese, president and chiefexecutive officer of privately-held PECOPallet. “They support our strategy ofgrowing with customers that value thequality and service PECO delivers.” “We are pleased to be associated withPECO,” said Alinda Chairman Chris Beale.“We believe that PECO is a robustbusiness led by an exceptionalmanagement team.” “PECO is an excellent fit with USS’sinvestment philosophy of acquiringresilient businesses with a track record of
sustainable growth and cashflowgeneration to help USS deliver a securefinancial future for our members. We lookforward to working with the managementteam and continuing our successfulpartnership with Alinda,” said MichaelPowell, Head of Private Markets Group forUSS. Dagnese noted that PECO’s currentmanagement and operations team willcontinue to lead the organization underits new ownership. He added that theacquisition will benefit PECO’semployees, suppliers, partners,distributors, and customers throughaccess to Alinda’s and USS’s resources andtheir proven strategies of helpingessential infrastructure businesses growprofitably in their markets. Alinda and USShave significant experience intransportation and logistics, includinginfrastructure to handle and store freightand supply chain operations. PECO currently operates a North Americanpallet pool network encompassing morethan 80 facilities and 21 million pallets.The company builds, services, delivers,and manages the distribution of its red,high-quality block pallets for America’stop consumer products, grocery, andother food-related enterprises to shipgoods.
Cont'd from Page 21)
OCTOBER 2020
Lumber Prices Continue to Freefall John Greene, Forest2Market October 22, 2020
Last week, southern yellow pine (SYP)lumber prices continued a precipitousdrop for the fifth week in a row, markingthe single largest weekly change—in bothdollars and as a percentage—of 2020.Forest2Market’s composite SYP lumberprice for the week ending October 16(week 42) was $569/MBF, a 17.5%decrease (and $121 drop) from theprevious week’s price of $690/MBF.Other price trends observed throughout
what has become the most chaotic year inrecent history include: - 1Q2020 Average Price: $360/MBF - 2Q2020 Average Price: $456/MBF - 3Q2020 Average Price: $761/MBF - YTD Average Price: $527/MBF Data and commentary from our BritishColumbia-based business partner,(Cont'd on Page 24)
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Madison’s Lumber Reporter, details asimilar scenario for benchmark dimensionsoftwood lumber products in westernregions. While prices for these productssurged in tandem with SYP, there are signsthat demand is slowing and prices areflattening. Madison’s recently wrote that “Pricescontinued to crash down in the Eastern S-P-F market last week. A large contingentof buyers participated, but the focus wason Less-Than-Truckload orders from thedistribution network at wildly varying –but resoundingly lower – numbers.Overall sales volumes were strong butindividual orders remained small ascustomers refused to take long positionsin a falling market. Prompt wood becamemore common with each passing day assawmills began to run into order files ona number of items, while production ofbread and butter items were booked ataround two weeks.” Market View“This pullback mostly reflects theunsustainable speculative peak thatlumber futures experienced. While theseries is volatile, the price surge that thefutures saw was beyond anything we haveseen before,” said Evercore ISI analystStephen Kim in a note to clients. As we wrote earlier this year, thecombination of strong (and surprising)lumber demand and pinched supplies
from manufacturers resulted in atremendous gap in the market, and thesupply chain is just now beginning torebalance. While we are more than fivemonths removed from the onset of thelockdowns, the finished lumber sector isnow facing a new challenge as productionin the PNW has been impacted bydevastating wildfires, which have claimeddozens of lives and inflicted significantdamage to communities, homes andbusinesses, and timber resources in theregion. The damage has been so substantial to theaccessible timber resource in many partsof the PNW that regional producers willlikely be working through salvaged logsfor the foreseeable future, which poses anumber of potential headaches in itself. As lumber producers across the continentcontinue to react to market signals and arebetter able to match production to currentdemand trends, the log supply issue in thePNW is likely to impact productioncapacity in the near term. As such, the USSouth will have to fill any gaps that resultfrom capacity limitations. However, we’realso nearing the end of the traditionalbuilding season, which could lead to adampening in demand and provide a bitof relief to manufacturers during a yearmarked by record levels of volatility.
(Cont'd from Page 23)
This article first appeared atForest2Market, reprinted here withpermission.
OCTOBER 2020
U.S. OSHA has cited Southern WoodComponents LLC – based in Moultrie,Georgia – for exposing employees tohazardous energy and caught-by hazardsafter an employee fatality. The woodproduct manufacturer faces more than$55,000 in penalties. An employee suffered fatal injury whentheir clothing became caught on the shaftof a conveyor. OSHA cited the companyfor failing to ensure that energy controlprocedures contained specific steps tolimit the release of hazardous energy,provide lockout/tagout devices formachines and equipment, and trainemployees to recognize hazardousenergy sources. OSHA also cited the company for allowingemployees to operate powered industrialtrucks without training, and for failing to
conduct an inspection of the lockoutprogram at least annually, provideappropriate machine guarding and reducecompressed air to a safe level beforeallowing employees to use it for cleaning. "Workers who perform service andmaintenance on machines and equipmentmust be trained on how to lockout anddisable machinery to preventunintentional startup," said OSHASavannah Area Office Director MargoWestmoreland. "Fatalities can beprevented if employers comply withOSHA standards, as required by law." Southern Wood provides packagingcomponents, customized pallets, cut-to-size lumber, truss components, and more.
Wood Products Company Cited afterFatal Incident
U.S. OSHA Cites Wood Products Manufacturer for Exposing Employees To Electricaland Mechanical Hazards After Fatality
Southern WoodComponents LLC, asshown on Google Maps
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Transparent Wood Could Be theWindow of the Future
Could looking through trees be the viewto a greener future? Trees replacing theclear pane glass in your windows is not awork of science fiction. It’s happeningnow. Forest Products Laboratory (FPL)researcher Junyong Zhu in co-
collaboration with colleagues from theUniversity of Maryland and University ofColorado, have developed a transparentwood material that may be the window oftomorrow. Researchers found thattransparent wood has the potential tooutperform glass currently used inconstruction in nearly every way.
OCTOBER 2020
Their findings were published in theJournal of Advanced Functional Materialsin their paper, “A Clear, Strong, andThermally Insulated Transparent Woodfor Energy Efficient Windows.” While glass is the most common materialused in window construction it comes witha costly economic and ecological price. Heat easily transfers through glass,especially single pane, and amounts tohigher energy bills when it escapes duringcold weather and pours in when it’s warm.Glass production in construction alsocomes with a heavy carbon footprint.Manufacturing emissions areapproximately 25,000 metric tons peryear. Now, transparent wood is emerging as oneof the most promising materials of thefuture. Transparent wood is created when woodfrom the fast-growing, low-density balsatree is treated to a room temperature,oxidizing bath that bleaches it of nearlyall visibility. The wood is then penetrated
with a synthetic polymer called polyvinylalcohol (PVA), creating a product that isvirtually transparent. The natural cellulose in its wood structureand energy-absorbing polymer filler intransparent wood means that it is far moredurable and lighter than glass. It canwithstand much stronger impacts thanglass and, unlike glass, it bends or splintersinstead of shattering. Switching to transparent wood couldprove to be cost efficient as well. It isapproximately five times more thermallyefficient than glass, cutting energy costs.It is made from a sustainable, renewableresource with low carbon emissions. It’salso compatible with existing industrialprocessing equipment, making thetransition into manufacturing an easyprospect. With all of these potential benefits forconsumers, manufacturing and theenvironment, the case for transparentwood couldn’t be…clearer.
Posted by Diane Banegas (ret) and posted by Robert Westover, Office ofCommunication, USDA Forest Service
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European Softwood Lumber ExportsContinue to Expand
European lumber exporters have expanded their sales overseas from 30% to 45%over the past ten years, with Asia receiving a fifth of total exports in 2020
Sawmills in several European countrieshave long been exporting large volumesof softwood lumber outside theirdomestic markets. Historically, most ofthe shipments were to neighboringcountries on the continent, and only about20% were shipped overseas to the MiddleEast/Northern Africa (MENA), the US, andJapan. In 2020, this share had grown to45%, with shipments to China havingexpanded the most. A combination of stagnant wood demandin Europe, readily available log supply inNorthern and Central Europe, and a lackof forest resources available to supplydomestic lumber manufacturers in majorwood-consuming regions worldwide hascreated opportunities for sawmills inEurope to increase production and exportoutside Europe. The four largest producers and exportersof softwood lumber in Europe areSweden, Finland, Germany, and Austria.Together they produced just over 56% ofEurope’s total lumber production in 2019,and the international shipments by these“Top 4” accounted for about two-thirdsof continent’s total export volume. Overthe past decade, this group has increasedexports by about 20% to an estimated 36million m3 in 2020, according to the WoodResource Quarterly. Practically all of theexpanded sales have been to overseas
markets, predominantly China and the US,but also to several smaller markets in Asia,including India, South Korea, Taiwan,Vietnam, and Australia. In 2020, over 65% of Finland’s lumberexports have gone to markets outsideEurope. However, Finland remains theonly country in the “Top 4” that has notyet expanded into the massive US lumbermarket (see chart). Sweden and Germanyhave shipped about 45% of their lumberexports overseas. Austrian sawmills stillpredominantly sell to neighboringcountries, with Italy, Germany, andSlovenia accounting almost 70% of theirtotal export volumes during the first sixmonths of this year. China and the US, where about 50% of theworld’s traded softwood lumber islanding, have become important marketsfor European lumber producers the pastdecade. With both countries lacking theforest resources to meet future increasesin demand for forest products, it is highlylikely that European wood manufacturerswill continue to expand their presence inthese two enormous markets in comingdecade. For insights on the latest internationalforest product market trends, please goto www.WoodPrices.com
OCTOBER 2020
Other News
Lean Operations, People-First Culture and Industry NetworkingHelps California Pallet Company Overcome COVID-19 Surge Overcoming COVID-19: California pallet company weathers pandemic thanks tostrong industry relationships. It has grown through lean operational practices andappropriate automation, such as a new repair line from Smetco and a new PalletHawg dismantler from Wood-Mizer.
IPP Expands Pallet Repair Coverage in UK Pallet rental provider IPP has established a new service center to serve as theplatform for further growth in the UK south east.
FEFPEB Highlights International Squeeze on Wood Sector The European Federation of Wooden Pallet & Packaging Manufacturers (FEFPEB)has warned that tighter supplies of wood in some international markets isexpected to increase prices into and beyond the final quarter of 2020.
Loadhog Lid Eliminated 108 Million Yards of Stretch Wrap in2019 Last year Loadhog estimated that three million pallets of stretch wrap wereeliminated by customers utilizing the Pallet Lid. Based on a recent business casethis is equivalent to 108 million yards of stretch wrap, almost enough to wraparound the earth three times.
Oxford Pallets to Use $2M in Ontario Funds to Invest inRobotics Oxford Pallet & Recyclers Ltd. will receive $2 million from the Ontario govermentto expand its operations and invest in robotic and vision technology to boost
Social Media Roundup What's new in social? Click on images to check.
To share yourcompany's socialpost, email to [email protected]
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OCTOBER 2020
Western Pallet Advertising Sponsors
Advance LumberGo Fast ManufacturingLerner ProjectNorth American Forest ProductsNorthwest HardwoodsPallet Connect
PRSSmith Sawmill ServiceTimber Products InspectionViking Engineering & DevelopmentWeaver Wood, LLC
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The Membership Drive Is On!
It's time to renew your WPA membership for 2020-2021. Watch yourmail for an exciting updates about the Association and your invoice.You can renew by sending the invoice back by mail or email or evenfaster - renew online! WPA welcomed 39 new members last year! This year's membershipdrive is now underway, and as always, the competition will be intense. In addition to valuable cash prizes, the winner now also receives themembership plaque, presented at the Annual Meeting. With the highlysuccessful 2020 Annual Meeting now in the books, it is time to worktoward 2021. (Be sure to save the date - January 15-19, 2021)
Upcoming Events 11/8/2020 - 11/11/2020 PACK EXPO Connects (Digital)www.packexpointernational.com 11/17/2020 PDS Basics: Fasteners | 11:00 AM - 12:00 PM ET (VirtualPresentation) Register at https://www.palletcentral.com/page/pdsonline 1/15/2021 - 1/19/2021 WPA Annual Meeting, Rancho Mirage, Californiawww.westernpallet.org 3/3/2021 - 3/5/2021, NWPCA Annual Leadership Conference & Expo, Orlando,Florida www.palletcentral.com
OCTOBER 2020
In case you missed them...(Click on back issues to read or download)