--

THE AUTHORS

J O H N T LUCAS recewed his B.S. degree in forestry from West Vlrginia Univers~ty In 1963 and his M F. degree from Duke University in 1964. He joined the Northeastern Forest Experiment Statlon in 1964 and was assoc~ate economist in the Station's secondary manufactured wood products project at the Forest Products Marketing Laboratory, Princeton, W . Va until August 1968. He IS now a stockbroker wlth White, Weld and Company in Hagerstown, Md.

WALTER B. WALLIN received his Ph.D. in wood tech- nology and economics In 1957 from the University of Minnesota where he was an instructor and professor at the School of Forestry from 1952 to 1960. He was research adusor to the government of East Pakistan under the auspices of the U S. Agency for International Development from 1960 to 1965. He IS now a project leader at the Forest Products Marketing Laboratory, Princeton, W. Va.

0 UR STUDY of the Department of Defense market for wooden pallets in 1967 showed:

Fortyseven percent fewer pallets were purchased in 1967 than in 1966. Plywood pallets were purchased for the first time. Nine new pallet specifications were on the DOD list of stand- ard pallet specifications. Two temporary distribution areas were set up.

The purpose of our study was to update and supplement the information in "The Department of Defense market for wooden pallets: 1965".' Unless otherwise noted, all information relates to 1967 and 1968.

QUALITY AND QUANTITY

The list of Department of Defense (DOD) standard pallet specificat~ons includes 26 different pallet specifications. Each one is designated by a Federal Item Identificat~on Number (FIIN). Nine of the pallet specifications were not on the list in the original report, and three that were listed in the origlnal report in 1965 are no longer class~fied as standard.

Of the 26 FIIN's, softwood pallets are designated by 8; and

' Lucas, John T . and K'altel I3 K'allm MARKET FOR ~ ' O O D E U PALLETS 1965 C S 10 pp. S E . Forest Exp. S ta . Upper Darby. Pa

THE DEPARTMENT OF DEFENSE Forest S e ~ v Res Paper NE-117.

1968

hardwood pallets are designated by 18. Eleven of the above FIIN's designate knocked-down pallets (table 1) .'

D O D updated one pallet specification in 1968. Specification MIL-P-15943B is now designated as MIL-P-15943C.

DGSC purchased 47 percent fewer pallets in 196- than in 1966. This decrease can be attributed to these factors:

Hardwood pallets that have been used for the shlpment of goods to Vietnam are belng reused in Vietnam.

0 Many D O D installations budt up large lnventorles of pallets

Many goods that formerly were shipped on pallets are being shipped overseas in skidded plyn-ood containers.

0 D O D is purchasing more goods on pallets. Pallets purchased as part of such a unit load are not recorded by DGSC as pallet purchases. In 1967, 25 of the 26 standard pallets. which are described by

7 different specifications (table I ) , \\.ere purchased by DGSC (table 2) . Six of the pallets (FIIN's 063-90-5. 141-7261. 222- 1044, 223-6529, 599-5326. and 926-1046) constituted tn-o-thirds of the 1.6 milllon wooden pallets purchased by DGSC in 196'. Thirty-four percent of the wooden pallets bought by DGSC were softwood units, and 2- percent were knocked-down units (table

2). D O D has decided that both a post pallet (FIIhT 141-7261)

and a notched-stringer pallet (FIIN 599-5326) ~ 1 1 1 be desq- nated as primary-the post pallet for overseas shipments and a cholce of the post or notched-str~nger pallet for domestic ship- ments. In 1967, 39 percent of the \\-ooden pallets purchased by DGSC were post pallets: and 61 percent \{-ere strlnger pallets, principally n~ith notched-stringers (table 2 ) . Both of the pro- posed primary pallets are \\.ing pallets Serenteen of the 26 FIIN's designate \\-ing pallets. and 82 percent of all pallets purchased by DGSC in 196- n-ere ~v ing pallets (table 2)

Plyn.ood pallets \\.ere purchased by DGSC for the first time in 1967. They \\-ere non-standard pallets that conformed to a Civil Defense purchase descr~ption.

All tables are In Apptndiu

PROCUREMENT A N D CONTRACT PERFORMANCE

As of January 1968. 349 firms u-ere listed on the DGSC u-ood- en pallet mailmg lists. In 196-. DGSC bought wooden pallets from 49 digerent firms (table 3 ) . Five firms supplled 47.8 percent of the pallets. and the largest suppller accounted for 13.9 percent. About one-third of the firms that sold wooden pallets to DGSC were in California and Korth Carolina, nine and seven firms respectively.

Slightly more than three-fourths of all wooden pallets sold to DGSC in 1967 were produced in five states. ATorth Carolina supplied 2 1.5 percent; Arkansas supplied 16.1 percent; Oregon supplied 15.0 percent; Texas supplied 13.3 percent; and Cali- fornia supplied 11.0 percent (table 3) .

All the DGSC \I-ooden pallet purchases in 1967 nere from small business firms (500 or fewer employees). Tn-enty-nine percent of the purchases nere from firms in labor surplus areas, and 61 percent were from firms in non-labor surplus areas.

Eighty-seven percent of the wooden pallets nere purchased f.0.b. origin, and 13 percent Lvere purchased f.0.b. destination (table 4). Although the terms f.0.b. origin and f.0.b. destination were officially replaced, respectively, by f.0.b. origin (Govern- ment Bills of Lading) and f.0.b. origin (freight prepaid to destination by contractor), tlie original terminology will be used so this report can more easily be compared with the 1965 and 1966 reports.

Because f.0.b. origin shipments predominated, the method of shipment for different kinds of pallets in 1967 diflered con- siderably from that in 1965. F.0.b. origin shipments of pallets purchased by DGSC comprised 91.3 percent of the knocked-down pallets, 84.8 percent of tlie assembled pallets. 82.1 percent of the softn-ood pallets. and 88.9 percent of the hardwood pallets (table 4 ) .

Average prices paid for wooden pallets bought f.0.b. origin in 1967 ranged from 51.3 percent lower to 40.1 percent higher than the prices paid in 1966 (table 5 ) . Prices were lower in 1967

than in 1966 for 15 of the 17 kinds of pallets bought f.0.b. origin in both years. And price decreases from 1966 to 1967 were greater than 17 percent for all but five of the pallets.

The percentage range from the low to high f.0.b. origin price (based on the low price) p a ~ d for a specific pallet in 1967 varied from a low of 0 percent to a high of 109.6 perecnt (table 6 ) . In 1966 the high was 171.8 percent. The low range was below 50 percent for 20 of the 23 pallets bought f.0.b. origin in 1967. Wooden pallet prices generally decreased throughout the year, but some items increased slightly in the fourth quarter (table 7).

Two temporary distribution areas were set up in 1967- Umatilla and Navajo (fig. 1 ) . They were established mainly to lighten the work load of the original Tracy area.

Prices for most of the pallets supplied from the Richmond region were generally lower than prices for the same pallets supplied from other regions in 1967. Prices were generally higher for pallets supplied from the Memphis, Navajo, and Tracy regions (table 8 and fig. 1 ) .

Figure 1. - DGSC distribution areas in the United States.

WHERE AND WHEN THE PALLETS ARE NEEDED

In 1967, DGSC received requisitions for 2,607,5 59 wooden pallets from DOD and purchased 1,611,156.

The Armed Forces needed 83.8 percent of the wooden pallets bought by DGSC in 1967. Most of the wooden pallets were needed by the Army (53.6 percent), followed by the Navy (27.3 percent), the Marine Corps (1.6 percent), and the Air Force (1.3 percent). Other sources of demand-the Coast Guard, General Services Administration, and the Military Assistance Program-needed 16.2 percent of the pallets (table 9) .

More pallets were required in January (1 1.4 percent) than in any other month in 1967 (table 10). Monthly pallet demand was more constant in 1967 than in 1965 or 1966. December was the only month in which demand was considerably below the average monthly demand for the year.

More pallets ( 3 1.5 percent) were required by installations in the Richmond region than in any other region. Installations in the Tracy region required the next largest proportion of pallets (26.2 percent) (table 11). As in 1966, most of the knocked-don-n pallets were required by the Tracy and Richmond regions (82.8 percent). But the demand pattern for softwood pallets in 1967 was different from that in 1966. Only 41.4 percent of the soft- wood pallets were required by the Tracy and Richmond regions (table 11).

APPENDIX

Table

Standard DOD wooden pallets . . . . . . . . .

Wooden pallets purchased by DGSC in 1967, by Federal Item Identification Number . . . . . . . . . . . . . . . .

. . . . . Wooden pallets supplied in 1967, by states and firms

Wooden pallets purchased by DGSC in 1967, by type of . . . . . shipment and Federal Item Identification Number

Average f .o.b. origin wooden pallet prices, 1966-1 967, by Federal Item Identification Number . . . . . . . . . . . . . .

F.0.b. origin wooden pallet prices, 1967, by Federal Item Identification Number . . . . . . . . . . . . . . . . . . . . . . . . . . .

Average f.0.b. origin wooden pallet prices, 1967, by quarter . . . . . . . . of the year and Federal Item Identification Number

Average f.0.b. origin wooden pallet prices, 1967, by geo- graphical region of the suppliers and Federal Item Identifi- cation Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of wooden pallets demanded in 1967, by service . . . . . . . . branch and Federal Item Identification Number

Number of wooden pallets demanded in 1967, by month and . . . . . . . . . . . Federal Item Identification Number

Number of wooden pallets demanded in 1967, by location and Federal Item Identification Number . . . . . . .

Page

8

10

11

1 2

13

14

15

16

17

19

2 0

7

Table 1. - Standard DOD wooden pallets

00 - - -. - -- . --

Federal Item Specification or Assembled (A) Type Number and Identification purchase description or knocked- of Entry Sides Dimensions of

Number (FIIN) num bcr down (Kd)z lumber" ( inches) deck supports

NN-P-7 i b

MIL-P-I 501 1 F

MIL-P-1501 1F

MI1,-P-4894

MU,-P-I 5943C

NN-P-7 1 b

NN-P-7 1 17

NN-P-7 1 b

NN-P-7 1 b

MIL-P-I 5943C

MIL-P- 1 501 1 F

NN-P-7117

MIL-P-22562

NN-P-7 I b

Softwood

Softwood

Hard wood

Softwood

Hardwood

Hardwood

Hardwood

Hardwood

Hardwood

Hardwood

Hardwood

Hardwood

Hardwood

Hardwood

3 str~ngers

7 posts

9 posts

3 stringcrs

3 stringers

5 stringers

3 stringers

3 stringcrs

5 stringcrs

3 str1ngcrs

9 posts

3 stringers

3 notchcd stringers

3 strmgers

2-way

4-way

4 -way

2-way

2 -way

'>-way

2-way

2-way

2-way

2-way

4 -way

2-way

Partial -4-way

2-way

noublr. wing

Flush

nou1,lc Wlll'q

I:lush

r)Oul+ wing

Flush

]:lush

Flush

Flush

Doublc Wlll'q

r ) ( ) ~ m wing

1;lush

1>0ul>lc wing

Flush

MIL-P-3938B

NN-P-7 I b MIL-P-43465 (GL)

MIL-P-43465 (GL)

MIL-P-I 501 1 F

MIL-P- 3938B

MIL-P- 3938B

MIL-P-15943C

MIL-P-i 501 I F

NN-P-71 b

MIL-P-15943C

NN-P-7 1 b

Hardwood

Hardwood Softwood

Softwood

Hardwood

Hardwood

Hardwood

Softwood

Softwood

Softwood

Hardwood

Hardwood

4 notched stringers 3 stringers 3 notched stringers 3 notched stringers 9 posts

4 notched stringers 4 notched stringers 3 stringers

9 posts

3 stringers

3 stringers

3 stringers

Partial 4-way 2-way Partial 4-way Partial 4-way 4-way

Partial 4-way Partial 4-way 2-way

-4 -way

2-way

2-way

2-way

Double wing

Flush I ~ o ~ l b l c

wing Double

wing Douhlc

wlng I>oublc

wmg Doublc wing

Double wing

r > O l l ~ ~ c wing

Double wmp

Doublc wing

Double wmg

- - - -- - ' Thc S I X kinds of pallets designated by an asterisk ( * ) beside the FIJN's constituted two-thirds of the number of standard pallets purchased

by DC;.K in 1967. - 2 ?'he knocked-down category refers to parts for pallets that are packaged for shipment to a DOD installiltion, generally overseas. where

fabrication takcs place All but two are shipped in bundles containing parts for 20 pallcbts, FIIN's 222-1053 and 926-3748 require part5 bundled for one pallet only.

Somc DOD specifications and purchase descriptions allow only certam species for pallet construct~on-ln scvcral instances, low-density broad- \3 leaf spccles are classified as "softwoods".

Table 2. - Wooden pallets purchased by DGSC in 7967, by Federal Item Identification Number

(Sumbers in boldface indicate knocked-down pallets)

Federal Item Identification Number of Number (FIIN) pallets2 Percent

-- --

All pallets 1,611,156 100.00

' See table 1 for descriptions of the pallets. ' In addition to the total for this column, DGSC purchased 155,614 non-standard

lumber pallets and 17.550 non-standard plywood pallets t Softwood pallets.

Table 3. - Wooden pallets supplied in 7967, by states and firms

Number of Number of Percent of State firms pallets pallets

North Carolina Arkansas Oregon Texas California Washington Alabama Tennessee Maryland ~ i s s i s s i p ~ i Virginia Colorado Hawaii Pennsylvania Georgia Kentucky

-

Total 49 1,611,156 100.00

Table 4. - Wooden pallets purchased by DGSC in 1967, by type of shipment and Federal Item Identification Number

(Sumbers In boldface md~catr knocked-don-n pallets)

Federal Item Identification Totdl p;lllets Number ( FIIN) F 0.b. orlgin F.o b. destinat~on purchased

ATum ber

370,074 218,213 158,540 157,500 89,561 55,470 71,800 -

28,220 55,260 16,960 22,260 30,720 -

10,420 23,079 20,433 19,700 13,988 1 1,446 10,680

400 6,160 2,393 1,200

All FIIN's 1,394,477 86.55 216,679 13.45 1,611,156

See table 1 for descr~ptlons of the pallets Softwood pallets

Table 5. - Average f.o.6. origin wooden pallet prices, 7 966- 7 967 by Federal Item Identification Number

(Sumbers In boldface mdlcate knocked-down pallets)

Federal Item Identification Number ( FIIN) 966

Change in price 967 1966- 1967

Percent

--

' See table 1 for description of the pallets. ' No pallets were purchased.

All pallets were purchased f 0.b. destination. t Softwood pallets.

Table 6. - F.o.6. origin wooden pallet prices, 7967, by Federal Item Identification Number

(Numbers in boldface indicate knocked-down pallets)

Federal Item Ident~fication Average Number (FIIN) price Price range Price range

Percent of lozr: price

See table 1 for descriptions of the pallets. t Softwood pallets.

Table 7. - Average f.0.b. origin wooden pallet prices, 7967, by quarter of the year and Federal Item Identification Number

(Numbers In boldface lndlcate knocked-down pallets)

Federal Item 1 2 3 4 Identification January- April- July- October- Average

Number ( FI IN) March June September December

' See table 1 for descriptions of the pallets. t Softwood pallets.

Table 8. -Average f.0.b. origin wooden pallet prices, 7967, by geographical region of the suppliers and Federal Item Identification Number

w (Numbers in boldfacc indlcate knocked-down pallets) - - - . - . . - - . - - - - - - - - . -. . . . . - - - . . . . . . - . . - - . - - . . -. -

Fcdcral Item Region2 Idcnt~fication .. .. - . -- - - -. - . -. . - . -. . . . . - - , - ,- . - . - -- -- Average

Number ( FIIN) 1 Richmond Atlanta Memphis Columbus Ogden Tracy Navajo Umatr I la . . .

. . . - - . - . -. . -. .

' See table 1 for descriptions of the pallets. * See fipurc 1 for regional boundaries. t Softwood pallets

Table 9. - Number of wooden pallets demanded in 7967, by service branch and Federal Item Identification Number (Numbers In boldface indlcate knocked-down pallets)

-.--. .- - . - . .- - - -

Federal Ttcm Service branch - . - -. - - - -. - . . . -. . . . . . - . . . . - - - -- , , . - - . . Pcrcen t Identificatron Marine

Number ( FIIN) Army Navy Air I'orce Corps Other2 Total

Toble 9. - Continued

Service branch Federal Item Percent Identification Marine

Total Number (FIIN)' Navy Air Force

t926-3848 55,260 - - - - 55,260 2.12

955-9632 2,050 - - - - 2,050 .08 946-2693

956-2950 1,000 - - - - 1,000 .J4

- 3,393 - - - 3,393 .13

959-0743 450 18,382 2,500 4,538 9,567 35,437 1.36

Total 1,397,023 710,796 34,664 41,261 423,815 2,607,559 100.00

1.58 16.25 100.00 - Percent 53.58 27.26 1.33

See table 1 for descriptions of the pallets. Coast Guard, Military Assistance Propmm, GSA, and others.

t snftwocd pallets.

. .

toa3-so7r

tl4L-7231

111-7261

202.2217

222.1044

222-1046

222-lW

222-1051

222-1013

223.6529

291-8717

542-3294

151-0418

599.1316

,*,-,983

t892.4394 t892.4391

t9263748

t 926-3808

t926W8

9462693 911.9632 916-2910

95P0743

T d c. \o

21,670 31,818 61.363 294 610 884 5 . m 383.466 -

31,116

4w

29,864

1,681

4260 - 72

,,,ma -

7,486 11,720

77.234 -

1,780 - - - - - 50 -

3Lm

5.4M 51,254

14012

1,706

740

1w -

1821

40 1.m

195 8w

43,087

4,860

3 w

-

- - -

2,550

- -

9,476

- MO 17,416 29,842

4.4W 2,331

20,3w 6,331 219 3,075 - - - 2,440 - Mo - 124-

- 140

1.107 198

10 2,910

78,290 46,261

10

13,4M 6,020

-

- 1W - - - - - - - - - - - I M

4,238 2.710

14.70

.30 2681

1.48

3.40 .71

-30

.I9 2 4 9.21

.a ~

.so 2.18

25.49

.a1 3.81

.A8

.07

5.99 2.12

-13

.08

.M 1.36

2%400 293,864 211,762 189.824 161.415 227,748 241,373 227,986 230,372 227,315 230,WS 63.401 2,607.119 lW.W

mxe”f 1144 11.27 8.12 1.28 6.Y 8.73 9.26 874 8.81 8.72 883 2.43 - -

- to63.9075 tl41.7237

M2-2217 222.lCU 222.1w6

212.1091 222.1m3 223-554 m16717 5424294 9554498 5594326 rnt.1983

lW24% tm4395 t916374S t926?%08 19263ul) 946.2693 955.9632 9562990 9594743

Ihl

141.7241

zn.iDuI

6000 11,387 - 383,466 30

%81 1.48 3.40

.30

.19 2 4

9.21 A4 .50

118

25.49 .W UI .L6 .a7

5.99 L I Z .I3 .W ai 1.36

.n

THE FOREST SERVICE of the U. S. Depart- ment of Agriculture is dedicated to the principle of multiple use management of the Nation's forest re- sources for sustained yields of wood, water, forage, wildlife, and recreation. Through forestry research, cooperation with the States and private forest owners, and management of the National Forests and National Grasslands, it strives - as directed by Congress - to provide increasingly greater service to a growing Nation.