The cost to the company for the manufacturing and transportation of the goods is a vital factor that will help determine the selling price to maintain the desired profit level. And when it comes to transportation, the price of the pallets matters the most apart from the shipping charges. Many people may have the misconception that the wooden pallet cost won’t vary as the pallet is ultimately a pallet. But the truth is something different.
Various factors influence pallet pricing. Unless you understand the role of each factor in controlling the price of these objects, you cannot buy the appropriate one for your business or apprehend the expenditure in advance:
- Lumber pricing:
One of the most important elements that can influence the wooden pallet cost is the current price of the lumber. When the industry faces a shortage of lumber, the demand will be high, which will drive up the price of lumber. So basically, it will be an issue of demand and supply.
- Since last summer, the supply is low due to the pandemic, and the mills are still struggling. A surge in the DIY market, pest infestation, lack of labour, and some other factors caused the shooting up of the pricing.
- As the new pellet cost depends mostly on the cost of raw materials, the increase in the lumber price will immediately increase pellet pricing considerably.
- Quantity of lumber use:
When the cost of the raw materials becomes the crucial factor controlling the wooden pallet cost, it makes sense to say that the amount of lumber that goes into use for making the pallet will also affect the pricing.
- If you are ordering the smaller pallets, then the amount of lumber use will be below, keeping the total cost low.
- The super-sized pallets will use more lumber, and obviously, the price will be higher.
- Type of the lumber:
The wooden pallet cost also depends on the nature of wood that the manufacturer is using for the preparation of the pallet.
- If you need to transport a very heavy load, then hardwood is the material that you have to prefer for the pallet. It will be expensive.
- Southern Yellow Pine is a more popular material, which is less expensive. But natural disasters can even make the price of SYP higher than hardwood.
- Size of boards:
If you are customizing the pallets, then the dimension of the board will be different from the standard dimensions. The wooden pallet cost also depends on the board sizes, which again depends on the load size, design, weight capacity, and method of transportation.
- The dimensional lumber has its demand and supply challenges in addition to the present condition of the market. With the new construction homes, there is an increasing deficiency of the other dimensions.
- Mills are busy making a variety of sizes of lumber. Once they are sensing the demand, they are quoting higher prices too.
As you can now understand, there are many factors governing pallet pricing, you have to monitor the market situation and buy at the right time.