THE WASHINGTON-STATE WOOD PALLET INDUSTRY

A survey of all pallet manufacturers in the state of Washington was conducted in February 1990. This work examined the structure of Washington's pallet industry in terms of its size, raw material use, investment strategies and the relative importance of factors that impact their competitive position, including capital expenditures and distribution channels. In 1989, the pallet industry in Washington consisted of 28 firms that produced about $26.9 million worth of pallets, used approximately 128.9 million board feet (MMBF) of lumber, and employed about 580 workers. Based on 24 competitive factors affecting pallet manufacturers' current operations, those emerging as most important were on-time delivery service, competitive pricing, and efficient operation of equipment. From 1988 to 1989, about $2.14 million was spent by Washington pallet manufacturers to upgrade plant and equipment; over the next 2 years (1990 and 1991), $2.25 million is expected to be invested in capital improvements. Two major elements differentiate the pallet industry in Washington from that of the Eastern United States. First, softwoods make up nearly 90 percent of the raw materials used in the manufacture of Washington's pallets, as compared to the hardwood-based pallet industry in the Eastern United States. Second, Washington's relatively small population of 4.65 million in 1988 is geographically restricted, thereby separating major markets. This research furnishes a unique western perspective on the U.S. pallet industry and provides comparisons and contrasts to previous studies that have described the pallet industry in the state of Pennsylvania and on a national level.