Palletics

I was hopeless at the subject of Economics.

The law of suppy and demand, the influence exerted on price by demand, economics in a free market or a central state control one were all equally confusing and baffling. My golden rule for coping with any economics question was to think of an answer in my mind and then reverse it when asked to commit to a seminar discussion or to paper in an exam.

A prime example of a product that behaves in a strange way in terms of economics in the big wide world is the wooden pallet, an inexpensive and low grade assembly that is used to shift cargo using a fork lift truck from ship to shore, on road and rail and to the point of delivery in our High Streets or out of town retail parks.

First used in any volume in the mid 1930's the pallet is made from the cheapest part of a commercially grown tree.

If the outer rings of a softwood tree can be regarded, in a food analogy, as the filet mignon at prime price for fancy uses then the heartwood destined for pallets is the hamburger.

It is still critical to any sawmill supply business as there is a good level of income from volume sales.
This is another cornerstone of economics as is the maxim of a famous chain of stores of stack them high and sell them low.

However, the availability of the lumber from which pallets are made is subject to other pressures in the market.

The construction industry is a main consumer of softwood for roof trusses, floor joists and boards, skirtings, architraves, staircases and all other manner of fixtures and fittings. If there is a period of boom in the house-building industry in particular then shortages of timber can be experienced and as a consequence, (there is that factor of scarcity of supply), the price of timber goes up and that humble, easily assembled product of the pallet becomes out-priced that being, of course, if any timber can be sourced for that purpose in the first place.

There could be a switch to hardwood if necessary but a house boom inspired rush for softwood is inevitably the pre-cursor for an upsurge in demand for hardwood which is used for products such as flooring and furniture which purchasers of a new house require as well.

So, booming industry results in a shortage of pallets.

This was certainly the case due to the huge demand from China and India for raw materials under the full steam ahead of their respective massive growth and productivity.

I recall seeing large billboards and even newspaper advertisements appealing for pallets, any second hand pallets, and many companies will have made a good living out of that business model. There were also, on motorway corridors, large and fascinating structures assembled from pallets awaiting despatch to ports, freight depots, railway marshalling points, distribution centres and all points in between.

As with most economic systems there is always a boom and bust cycle. I did learn that much from my hours in the lecture theatre at Polythechnic (pre-Uni status) and from personal experience I have been in a business sector that has been bouncing along in a deep recessionary trough for the last 8 years after, in hindsight, what was a pretty sustained overheated market boom in the pre-ceeding period.

In broad summary, the humble pallet can be taken to be a key indicator of the state of trade in the global economy.

Presently I am a bit concerned about a slump in world markets. This is not down to my avid following of stock markets, financial indices or media reports (although I was shocked and angry at the recent job losses in the UK Steel Industry) but from the apparent glut of pallets readily available for DIY and craft projects.

A surplus pallet can be recycled to form just about everything according to the innovative website of designrulz.com which I recently stumbled across in my broader research.

There is no shortage of clever, practical ideas from shoe rack to garden furniture set, decking to bike storage unit, porch swing to stair-casing, pet bed to stools and chairs, bin store to screen fencing, home cinema seating to wine bottle rack and many others.

This sphere of demand produces yet more confusion to my understanding of economics. I might just purchase a second hand pallet and reduce it to matchwood and see if that helps alleviate my stress and anxiety over the whole thing. Palletical intrigue indeed.