Wood Prices are Up! What Does That Mean for Your Packaging Products?

Posted by Conitex Sonoco Team on July 24,2018

This year, we’ve seen the price of wood and wood materials climb month-over-month leading to even higher price jumps in wooden boxes, wooden pallets, wooden crates and more. This has been bad news for manufacturers and distributors who depend on these wood packaging products to store, protect and ship their goods.

Some are even calling it a lumber crisis.

A Look at the Wood Used for Packaging Products

Wooden packaging products for manufacturers and distributors are made from hardwoods and softwoods. The difference lies in its source and physical properties.

  • Softwood is the wood we get from firs, cedars, pines and other coniferous trees. Most timber is softwood. This wood is used to make a wide range of building components like windows and doors and medium-density fiberboard (MDF).
  • Hardwood is the wood we get from oaks, maples, walnuts and other flowering trees. This wood is denser and typically more expensive. Hardwood is used to make high-quality furniture, decks, flooring, and other products that need to last a long time.

Packaging companies typically use low-grade hardwood to make pallets because it is strong and economical - but it’s also a hot commodity for these reasons which results in more competition and price fluctuations based on market swings. Packaging companies that make pallets will switch to softwood when the prices are trending higher in an effort to keep their product cost the same.

Needless to say, this model makes wood prices inherently unpredictable overall.


Why are Wood Prices so High Right Now?

A large part of this dramatic price increase is due to a shortage of lumber. As the shortage continues, lumber prices continue to increase. In 2017, wildfires in Canada proved to be one of the harshest damaging events seen in years.

Trade disputes between the United States and Canada didn’t help either. Increased US tariffs on Canadian softwood lumber made it more expensive to get material in the United States, thus restricting packing manufacturers’ supplies.

Let’s not neglect the ever decreasing transportation availability of lumber with fewer truckers. “Loads far outnumber vehicles as freight volumes near records; ‘like trying to get a cab at LaGuardia’” according to the Wall Street Journal.


Combat the Rising Price of Wood - Switch to Corrugated Paper

If you are looking for a cheaper, reliable alternative to wood, consider corrugated paper. We know what you’re thinking, “isn’t paper made from wood?” Yes! But paper is made from recycled bits of wood for a cleaner, more engineered material to make your packaging products.

Packaging product engineers are always looking for a better, cheaper product that is simpler or faster to make. In the past 30 years, cardboard, or corrugated paper started replacing wood in various packaging applications.

In short, aside from the reliability in cost, paper packaging products are lighter, more customizable and more easily recyclable.

Consider substituting your wooden crates for cardboard boxes, or substituting your wooden pallets for paper pallets.

Just by switching to corrugated paper pallets from wooden pallets, Ikea saves $193 million a year in transportation costs according to Change the Pallet. As if the cost wasn’t enough, Ikea also projected to reduce 20 percent of its CO2 emissions per cubic meter of products transported over five years, beefing up their sustainability efforts significantly.  

Our corrugated paper packaging products, pallets specifically, are mostly made from recycled fiber content and are easily and 100% recyclable. They are suitable for baling along with boxes and other corrugated packaging products. Overall, switching to paper can reduce disposal costs and can generate revenues upon proper disposal.

To learn more about the benefits of corrugated paper pallets over wooden pallets, check out our material comparison blog here and feel free to reach out if you have any questions!

Tags: Pallets

Conitex Sonoco Team
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