1 00:00:10,720 --> 00:00:14,080 Speaker 1: Hello, and welcome to another episode of the All Thoughts podcast. 2 00:00:14,160 --> 00:00:17,360 Speaker 1: I'm Tracy Allaway and I'm Joe. Wasn't all Joe? I 3 00:00:17,400 --> 00:00:20,640 Speaker 1: feel like if we've learned one thing over the past 4 00:00:20,720 --> 00:00:25,680 Speaker 1: year or two, it's that supply chains rule everything around us. Yes, 5 00:00:26,000 --> 00:00:31,040 Speaker 1: that's exactly right, everything. I mean, you can't talk. There 6 00:00:31,120 --> 00:00:32,920 Speaker 1: is something I've been thinking about a lot, actually, which 7 00:00:32,960 --> 00:00:36,600 Speaker 1: is that you really can't talk about a good, any 8 00:00:36,680 --> 00:00:40,479 Speaker 1: sort of good, whether it's a washing machine or a 9 00:00:40,520 --> 00:00:42,720 Speaker 1: piece of lumber for a house or something like that, 10 00:00:43,159 --> 00:00:47,879 Speaker 1: without talking about the system that brings it and to something. 11 00:00:47,960 --> 00:00:51,479 Speaker 1: Even to talk about like goods and services as distinct 12 00:00:51,600 --> 00:00:55,320 Speaker 1: categories of economic spending or whatever is kind of a 13 00:00:55,320 --> 00:00:58,640 Speaker 1: fallacy because in the end, there is nothing without the 14 00:00:58,680 --> 00:01:01,280 Speaker 1: services that brought the good to you, or brought the 15 00:01:01,320 --> 00:01:03,440 Speaker 1: good to the factory, or brought the sort of like 16 00:01:04,200 --> 00:01:06,640 Speaker 1: the parts to the factory. It's all intertwined. I agree 17 00:01:06,640 --> 00:01:08,960 Speaker 1: with that. So one of the things that we're realizing 18 00:01:09,280 --> 00:01:13,120 Speaker 1: right now is that supply chains also play a very 19 00:01:13,240 --> 00:01:16,880 Speaker 1: very big role in military conflicts. And you know, to 20 00:01:16,959 --> 00:01:19,000 Speaker 1: some extent, I guess that would be expected because in 21 00:01:19,000 --> 00:01:22,560 Speaker 1: a military conflict, essentially you're moving lots of goods and 22 00:01:22,680 --> 00:01:26,560 Speaker 1: people from one area into another area. But in another sense, 23 00:01:27,000 --> 00:01:30,520 Speaker 1: it's kind of surprising when you read headlines along the 24 00:01:30,560 --> 00:01:37,120 Speaker 1: lines of shortage of palettes is hampering Russia's invasion of Ukraine. Right. 25 00:01:37,240 --> 00:01:39,640 Speaker 1: There have been a lot of people talking about how 26 00:01:39,720 --> 00:01:44,759 Speaker 1: like wars are very big exercises in supply chains and 27 00:01:44,920 --> 00:01:48,760 Speaker 1: logistics planning, and I guess it stands to reason, but 28 00:01:48,880 --> 00:01:51,760 Speaker 1: it's not something that had occurred to me up until 29 00:01:51,960 --> 00:01:55,840 Speaker 1: very recently that a lot of the supply chain stresses 30 00:01:56,200 --> 00:01:59,680 Speaker 1: that we're seeing across the economy would also affect the 31 00:02:00,000 --> 00:02:03,600 Speaker 1: ability of nations to conduct war, which of course needs 32 00:02:03,600 --> 00:02:06,080 Speaker 1: a lot of metal and other goods and food and 33 00:02:06,200 --> 00:02:08,480 Speaker 1: energy and oil and the same thing everyone else needs. 34 00:02:08,600 --> 00:02:11,160 Speaker 1: And there was a there was a Twitter thread by 35 00:02:11,320 --> 00:02:15,120 Speaker 1: uh talking about palettes, and of course we've talked about paletts. 36 00:02:15,240 --> 00:02:17,480 Speaker 1: We have indeed, so I'm pleased to say we are 37 00:02:17,520 --> 00:02:21,840 Speaker 1: going to be continuing our conversation about palettes in today's episode, 38 00:02:21,880 --> 00:02:25,680 Speaker 1: but we are going to be focusing on military applications 39 00:02:25,720 --> 00:02:29,480 Speaker 1: of palettes, which there are a bunch. Apparently we are 40 00:02:29,520 --> 00:02:33,320 Speaker 1: bringing back martial White. He is, of course, a professor 41 00:02:33,360 --> 00:02:37,519 Speaker 1: emeritus at Virginia Tech and UH, you know, considered America's 42 00:02:37,639 --> 00:02:41,520 Speaker 1: leading expert on wooden palettes. So Mark, thanks so much 43 00:02:41,520 --> 00:02:44,120 Speaker 1: for coming back on the show. Tracy, Joe, thank you 44 00:02:44,200 --> 00:02:48,400 Speaker 1: very much for having me back. Thanks for coming on. Yeah, absolutely, 45 00:02:48,480 --> 00:02:52,040 Speaker 1: So maybe just to begin, can you explain what exactly 46 00:02:52,639 --> 00:02:56,640 Speaker 1: what role do palettes play in UH, in the military 47 00:02:56,680 --> 00:03:00,359 Speaker 1: and offense slash defense. You know, I work with corporate 48 00:03:00,400 --> 00:03:03,640 Speaker 1: world in supply chain efficiency design and the role of 49 00:03:03,680 --> 00:03:08,320 Speaker 1: the palette, which of course is the interface between all 50 00:03:08,400 --> 00:03:12,400 Speaker 1: of the materials, handling equipment and the product being shipped. 51 00:03:12,400 --> 00:03:15,280 Speaker 1: So it's the component is critical and thus I've devoted 52 00:03:15,280 --> 00:03:17,959 Speaker 1: an entire career to it. But there's a there's a 53 00:03:18,080 --> 00:03:22,840 Speaker 1: difference in the goals and objectives of military supply chains 54 00:03:22,919 --> 00:03:27,480 Speaker 1: and corporate commerce supply chains. In the corporate world, we're 55 00:03:27,520 --> 00:03:33,120 Speaker 1: continually focused on reducing cost, keeping it as lean as possible, 56 00:03:33,200 --> 00:03:36,760 Speaker 1: but still versatile and reliable, so that's cost reduction. The 57 00:03:36,800 --> 00:03:40,800 Speaker 1: military is very different. Number one priority is what they 58 00:03:40,800 --> 00:03:46,400 Speaker 1: call preparedness, That is, making sure the soldiers are prepared 59 00:03:46,440 --> 00:03:49,760 Speaker 1: on the battlefield and therefore getting them what they need 60 00:03:49,880 --> 00:03:54,320 Speaker 1: when they need and cost and I appreciate this is 61 00:03:54,320 --> 00:03:57,200 Speaker 1: a secondary issue in the military supply chain. So when 62 00:03:57,240 --> 00:04:02,600 Speaker 1: you look at designs and efficiencies, there are significant differences 63 00:04:02,640 --> 00:04:09,000 Speaker 1: between military and corporate karmas supply chains. Um. And then 64 00:04:09,080 --> 00:04:11,880 Speaker 1: then then if I might just continue by saying that 65 00:04:12,160 --> 00:04:17,920 Speaker 1: the way we make either supply chain more efficient is 66 00:04:18,040 --> 00:04:22,880 Speaker 1: we delay as much as possible downstream the handling of 67 00:04:23,040 --> 00:04:28,560 Speaker 1: each In the case of the military, individual boxes of munitions, 68 00:04:28,600 --> 00:04:32,599 Speaker 1: what you want to do is unitize as far down 69 00:04:32,640 --> 00:04:35,520 Speaker 1: the supply chain as you can. Quite frankly, as the 70 00:04:35,560 --> 00:04:42,520 Speaker 1: military says, onto the integrated battlefield. You want palitized products 71 00:04:42,560 --> 00:04:46,560 Speaker 1: all the way down. That's how you gain efficiency. Ironically, 72 00:04:46,920 --> 00:04:49,359 Speaker 1: it's the same in the military world is in the 73 00:04:49,440 --> 00:04:54,320 Speaker 1: commerce world, and those we design, but we will have 74 00:04:54,600 --> 00:04:59,120 Speaker 1: very specialized equipment to do this in the military. I'm 75 00:04:59,160 --> 00:05:02,400 Speaker 1: not an expert on Russian supply chains, but I've worked 76 00:05:02,480 --> 00:05:05,960 Speaker 1: with our military, both the Department of Army and the 77 00:05:05,960 --> 00:05:10,400 Speaker 1: Department of Navy in supply in in in designing components 78 00:05:10,440 --> 00:05:14,000 Speaker 1: of the supply chains. So that's how I respond in 79 00:05:14,040 --> 00:05:18,640 Speaker 1: a general sense to the differences between military and commerce, 80 00:05:19,000 --> 00:05:23,480 Speaker 1: but also the similarities. And in one more comment, you 81 00:05:23,600 --> 00:05:28,600 Speaker 1: both are absolutely correct. Supply chains win wars and and 82 00:05:28,680 --> 00:05:31,960 Speaker 1: I think it's Dwight Eisenhower who made that quote back 83 00:05:32,000 --> 00:05:35,440 Speaker 1: at the end of World War Two. You know, it's 84 00:05:35,480 --> 00:05:39,039 Speaker 1: really interesting, uh this point, and I hadn't really connected 85 00:05:39,080 --> 00:05:44,159 Speaker 1: it that fundamentally, Uh, military supply chain strategy is going 86 00:05:44,240 --> 00:05:46,400 Speaker 1: to be a little different and less focused on cost. 87 00:05:46,800 --> 00:05:49,719 Speaker 1: And of course sometimes that's infamous. I recall in the 88 00:05:49,800 --> 00:05:54,880 Speaker 1: nine eighties, who was the huge scandal of the Pentagon 89 00:05:55,120 --> 00:06:00,440 Speaker 1: purchasing nine ashtrays for airplanes and that seemed to excessive 90 00:06:00,440 --> 00:06:02,479 Speaker 1: to everyone, and it probably was, but there was like 91 00:06:02,520 --> 00:06:04,680 Speaker 1: some argument that, you know, you couldn't just have a 92 00:06:04,720 --> 00:06:09,359 Speaker 1: typical glass ashtray on an airplane because you know, in 93 00:06:09,400 --> 00:06:11,880 Speaker 1: a dangerous situation it could shatter and create all kinds 94 00:06:11,920 --> 00:06:15,480 Speaker 1: of problems. Still seemed excessive. But it does seem as 95 00:06:15,520 --> 00:06:20,880 Speaker 1: though military procurement military goals are clearly not about cost 96 00:06:21,440 --> 00:06:26,400 Speaker 1: for the vendors into the military supply chain, for the 97 00:06:26,440 --> 00:06:29,520 Speaker 1: experts and consultants. How does that sort of like change 98 00:06:29,560 --> 00:06:33,360 Speaker 1: the thinking in terms of what the military needs it? 99 00:06:33,680 --> 00:06:36,200 Speaker 1: You know, it does dramatically now. It don't get me wrong. 100 00:06:36,480 --> 00:06:40,839 Speaker 1: The military is focused on cost, but it is part 101 00:06:40,880 --> 00:06:43,160 Speaker 1: of the priority, but it's not the highest priority. As 102 00:06:43,200 --> 00:06:46,880 Speaker 1: I mentioned. Okay, so in our world of pallets, there 103 00:06:46,920 --> 00:06:53,159 Speaker 1: are standard munition palletts, the ten palette that's been around 104 00:06:53,160 --> 00:06:56,520 Speaker 1: for a long long time. It's a wood palette. UM. 105 00:06:57,080 --> 00:07:00,599 Speaker 1: Something a little bit different though. Uh. We had a 106 00:07:00,600 --> 00:07:03,919 Speaker 1: research project with the Department of Army here at Virginia 107 00:07:04,000 --> 00:07:09,440 Speaker 1: Tech years ago to quote harden the would pallet. And 108 00:07:09,520 --> 00:07:13,080 Speaker 1: what we mean by hardening it is to make it 109 00:07:13,240 --> 00:07:19,280 Speaker 1: so you could decontaminate it from chemical or biological weapons. 110 00:07:19,720 --> 00:07:26,520 Speaker 1: Uh in this theater um of war or um radioactive 111 00:07:26,560 --> 00:07:32,240 Speaker 1: fallout and dust um in into that end. Um, we 112 00:07:32,360 --> 00:07:35,640 Speaker 1: developed a procedure of treating with pallet so that they 113 00:07:35,640 --> 00:07:40,680 Speaker 1: could be easily decontaminated of these weapons on the future. 114 00:07:40,680 --> 00:07:44,400 Speaker 1: And you have to understand a a chemical weapon is 115 00:07:44,480 --> 00:07:48,480 Speaker 1: delivered as an aerosoul through the air and um and 116 00:07:48,680 --> 00:07:52,280 Speaker 1: generally it is designed to soak into tissue. I mean, 117 00:07:52,280 --> 00:07:56,480 Speaker 1: these are very very the weapons. By the way, we 118 00:07:56,600 --> 00:07:59,000 Speaker 1: in the news we heard a little bit about concern 119 00:07:59,680 --> 00:08:02,760 Speaker 1: of these weapons use of mass destruction in this theater. 120 00:08:03,640 --> 00:08:08,280 Speaker 1: I certainly hope it never happens. But that's give you 121 00:08:08,320 --> 00:08:12,760 Speaker 1: one difference here, and that is a performance level of 122 00:08:12,760 --> 00:08:16,080 Speaker 1: a palt is very different that can be decontaminated. Obviously 123 00:08:16,120 --> 00:08:20,080 Speaker 1: in commerce, that's not necessary in the corporate world, So 124 00:08:20,400 --> 00:08:25,480 Speaker 1: there are differences. Uh the chemical agent resistant coding which 125 00:08:25,560 --> 00:08:28,760 Speaker 1: you see on all the military vehicles, that's the purpose 126 00:08:28,840 --> 00:08:31,360 Speaker 1: of that coding. It could not work on wood pallets. 127 00:08:31,440 --> 00:08:35,320 Speaker 1: We had to get a different, different treatment. But that 128 00:08:35,480 --> 00:08:40,600 Speaker 1: coding is used on almost everything, so that should these 129 00:08:40,640 --> 00:08:44,240 Speaker 1: weapons be used, the area around these soldiers can be 130 00:08:44,320 --> 00:08:50,040 Speaker 1: easily decontaminated. So there are some very significant performance differences. 131 00:08:50,480 --> 00:08:53,320 Speaker 1: Can you go into that a little bit more so? Obviously, 132 00:08:53,480 --> 00:08:58,400 Speaker 1: palets matter for a military conflict, and the US Army 133 00:08:58,440 --> 00:09:01,679 Speaker 1: seems to be actively thinking about this because they're investing 134 00:09:02,360 --> 00:09:06,920 Speaker 1: in particular coadings that will protect pallets from chemical or 135 00:09:07,040 --> 00:09:10,600 Speaker 1: um I guess, nuclear fallout, that sort of thing. What 136 00:09:10,679 --> 00:09:13,480 Speaker 1: are we actually seeing in Russia in terms of its 137 00:09:13,760 --> 00:09:19,160 Speaker 1: pallet capabilities and how do they differ from uh an 138 00:09:19,280 --> 00:09:22,480 Speaker 1: army like the the U. S Army And what does 139 00:09:22,520 --> 00:09:28,440 Speaker 1: it mean for um, the Russian armies efficiency. Yeah, again, 140 00:09:28,480 --> 00:09:32,280 Speaker 1: I'm going to have to be careful here. She claiming 141 00:09:32,320 --> 00:09:35,840 Speaker 1: to have an expertise in the supply chain, the military 142 00:09:35,840 --> 00:09:39,120 Speaker 1: supply chain of the Russians. I I really don't know, 143 00:09:39,559 --> 00:09:43,560 Speaker 1: I saw the images on roads that we've all seen 144 00:09:43,640 --> 00:09:47,520 Speaker 1: of these stalled vehicles right on these roads in the 145 00:09:47,679 --> 00:09:51,200 Speaker 1: Ukraine or outside the Ukraine leading into the Ukraine. It 146 00:09:51,240 --> 00:09:57,800 Speaker 1: indicates to me clearly to anyone that's a failed supply chain. UM. 147 00:09:57,840 --> 00:10:01,600 Speaker 1: For one reason or another, fuel weren't delivered in in 148 00:10:01,760 --> 00:10:05,559 Speaker 1: so these vehicles are stalled. Clearly, those vehicles were intended 149 00:10:05,600 --> 00:10:08,800 Speaker 1: to be part of the supply chain, the transport stores 150 00:10:09,240 --> 00:10:13,040 Speaker 1: and munitions. I mean that's what the military moves. Munitions. 151 00:10:13,080 --> 00:10:16,079 Speaker 1: I think you understand what those are. But stores are 152 00:10:16,160 --> 00:10:20,720 Speaker 1: everything else, clothes, shoes, food, those are what's called stores, 153 00:10:20,960 --> 00:10:24,679 Speaker 1: and that looks to be a clear failure. Now I 154 00:10:24,760 --> 00:10:27,880 Speaker 1: don't know. I didn't get close ups on the vehicles. 155 00:10:28,440 --> 00:10:32,559 Speaker 1: I did read the article that you you cite regarding 156 00:10:32,840 --> 00:10:39,000 Speaker 1: Pallette use. Listen, would pallette used in Russia in commerce 157 00:10:39,600 --> 00:10:43,240 Speaker 1: are similar to what we use here. There's nothing different. 158 00:10:43,559 --> 00:10:47,959 Speaker 1: Perhaps they're metric and dimensions but compared to US customer units, 159 00:10:48,000 --> 00:10:52,320 Speaker 1: but but they're the same. Availability of palettes could be 160 00:10:52,400 --> 00:10:55,959 Speaker 1: a problem in this Russian supply chain. I cannot comment 161 00:10:56,080 --> 00:10:59,480 Speaker 1: as to why that is, Okay, I find it strange. 162 00:11:00,080 --> 00:11:03,680 Speaker 1: Maybe lack of planning, UM but but but to take 163 00:11:04,440 --> 00:11:06,080 Speaker 1: and I don't want to bend your ear too much 164 00:11:06,160 --> 00:11:09,439 Speaker 1: for for the listeners, but take take the U. S. 165 00:11:09,520 --> 00:11:13,240 Speaker 1: Military that they have specialized equipment, the tense. The M 166 00:11:13,280 --> 00:11:18,560 Speaker 1: ten seventy five is a vehicle that literally takes palletized 167 00:11:18,640 --> 00:11:22,360 Speaker 1: loads all the way to the soldier on the on 168 00:11:22,360 --> 00:11:25,240 Speaker 1: on the battlefield. It's a rough terrain vehicle. It's uh. 169 00:11:25,559 --> 00:11:28,800 Speaker 1: You can find it described on the internet. These are 170 00:11:28,840 --> 00:11:33,800 Speaker 1: extremely efficient ways to deliver munition and stores all the 171 00:11:33,840 --> 00:11:38,200 Speaker 1: way downstream. Again, the key is to stay as far 172 00:11:38,240 --> 00:11:42,959 Speaker 1: away from handling each little box independently, which we saw 173 00:11:43,120 --> 00:11:45,839 Speaker 1: in some of those articles you you cited that the 174 00:11:45,920 --> 00:11:50,240 Speaker 1: Russians are having to do. It indicates clearly some inefficiencies 175 00:11:50,280 --> 00:11:52,959 Speaker 1: and their supply chains and movement. Can you actually explain 176 00:11:53,000 --> 00:11:55,720 Speaker 1: that a little bit for their and for listeners. There's 177 00:11:55,720 --> 00:11:58,360 Speaker 1: actually a Wikipedia page on the M ten seventy five 178 00:11:58,400 --> 00:12:02,120 Speaker 1: and other palletized loads system trucks for the United States Army, 179 00:12:02,480 --> 00:12:04,320 Speaker 1: So you can pull that up while you're listening. But 180 00:12:05,040 --> 00:12:08,480 Speaker 1: can you just expand on that last point, what do 181 00:12:08,520 --> 00:12:12,880 Speaker 1: you mean by like, uh, you just clarify, build out 182 00:12:12,920 --> 00:12:16,719 Speaker 1: what you're seeing and what's a bad way of handling 183 00:12:17,040 --> 00:12:19,960 Speaker 1: munitions and stores. If you have ninety boxes on a 184 00:12:20,000 --> 00:12:23,040 Speaker 1: palette and they're consolidated on a pallette, one could assume 185 00:12:24,640 --> 00:12:27,920 Speaker 1: set aside cost of handling equipment, but one can assume 186 00:12:28,000 --> 00:12:32,600 Speaker 1: it's nine times more efficient than handling each individual box, right, 187 00:12:33,160 --> 00:12:37,040 Speaker 1: And so eventually at some point you have to handle 188 00:12:37,080 --> 00:12:40,280 Speaker 1: that munition. But now here's another story. And I just 189 00:12:41,280 --> 00:12:44,360 Speaker 1: enjoyed so much working in the military and and learned 190 00:12:44,400 --> 00:12:48,640 Speaker 1: a lot from them about logistics. You know, the D 191 00:12:48,840 --> 00:12:52,480 Speaker 1: twenty millimeter shell in the tank rearmed tank. If you 192 00:12:52,640 --> 00:12:58,840 Speaker 1: do it manually, loading boxes to the tank and then 193 00:12:58,920 --> 00:13:02,080 Speaker 1: loading and rearming the tank could take thirty forty minutes. 194 00:13:03,040 --> 00:13:06,960 Speaker 1: The system of tubes and resupply is automatic. You can 195 00:13:07,000 --> 00:13:13,360 Speaker 1: resupply millimire tank in five minutes. That's how efficient these 196 00:13:13,440 --> 00:13:17,480 Speaker 1: processes and devices are that the military use. Now take 197 00:13:17,520 --> 00:13:21,080 Speaker 1: the Navy, Okay, the Navy has this whole group of 198 00:13:21,080 --> 00:13:26,200 Speaker 1: what they call Lewis and Clark over the water resupply vessels. 199 00:13:26,320 --> 00:13:31,080 Speaker 1: These are warehouses on the water um handling unit loads, 200 00:13:31,200 --> 00:13:35,439 Speaker 1: palletized loads. If you walked into the Lowis and Clark, 201 00:13:35,960 --> 00:13:39,319 Speaker 1: the holds the stowage holds in there looks like a warehouse, 202 00:13:39,559 --> 00:13:44,599 Speaker 1: highly automated a s RS automatic stacking retrieval systems, robots 203 00:13:45,160 --> 00:13:51,240 Speaker 1: inside these vessels. The efficiencies are remarkable and thens Eisenhower sent, 204 00:13:52,000 --> 00:13:55,880 Speaker 1: you know, supply chains, win wars. He take Dwight Eisenhower 205 00:13:56,120 --> 00:13:59,840 Speaker 1: president in the fifties. What did he do? He put 206 00:14:00,080 --> 00:14:05,839 Speaker 1: the interstate highway system. He thinks logistics. He thought and 207 00:14:06,080 --> 00:14:10,720 Speaker 1: understood how important the interstate highway system was going to 208 00:14:10,760 --> 00:14:15,080 Speaker 1: be too. Commerce in this country. Um goes way back 209 00:14:15,120 --> 00:14:34,000 Speaker 1: a little bit of a history list. So the last 210 00:14:34,000 --> 00:14:35,480 Speaker 1: time we had you on Mark, I think it was 211 00:14:35,520 --> 00:14:39,200 Speaker 1: in December to talk about the general shortage of palettes 212 00:14:39,480 --> 00:14:42,560 Speaker 1: and the fact that prices had gone up quite a lot. 213 00:14:42,800 --> 00:14:45,960 Speaker 1: I think they were. They used to be something like 214 00:14:46,440 --> 00:14:49,520 Speaker 1: nine or twelve dollars per wooden palette, and back in 215 00:14:49,520 --> 00:14:52,960 Speaker 1: December they've gotten up to something like fifteen dollars per palette. 216 00:14:53,920 --> 00:15:00,280 Speaker 1: There's another supply chain strain that emanates from the the 217 00:15:00,400 --> 00:15:04,920 Speaker 1: Russian invasion of Ukraine, and that is the apparently Ukraine 218 00:15:04,920 --> 00:15:08,600 Speaker 1: exports a lot of the wood used to make wooden pallets. 219 00:15:08,680 --> 00:15:11,840 Speaker 1: And so for instance, before we started the show, I 220 00:15:11,880 --> 00:15:16,440 Speaker 1: saw the the European Federation of Wooden Pallette and packaging manufacturers. 221 00:15:16,520 --> 00:15:19,960 Speaker 1: They basically warned that the conflict in Ukraine is expected 222 00:15:20,000 --> 00:15:22,920 Speaker 1: to cause significant pressures on the supply of wood and 223 00:15:23,000 --> 00:15:27,480 Speaker 1: therefore palets and packaging. Is that something that's on your radar? Yeah, 224 00:15:27,560 --> 00:15:32,320 Speaker 1: you know that is really fascinating. This is something I learned. Um, 225 00:15:32,400 --> 00:15:35,400 Speaker 1: the the eastern part of the Ukraine is a wood 226 00:15:35,440 --> 00:15:39,480 Speaker 1: bread basket. I was I was astounded to learn from 227 00:15:39,800 --> 00:15:42,720 Speaker 1: for example, a client I have in the Czech Republic 228 00:15:43,280 --> 00:15:46,760 Speaker 1: where they said, Mark and this is not the military now, 229 00:15:47,200 --> 00:15:50,160 Speaker 1: they said, you've got to realize we have lost that 230 00:15:50,600 --> 00:15:55,480 Speaker 1: entire source of wood and it was critical to Europe 231 00:15:55,880 --> 00:16:01,040 Speaker 1: that supply of wood. So your point is well made. Um, 232 00:16:01,080 --> 00:16:05,680 Speaker 1: I don't expect the Russian supply chain to depend on 233 00:16:06,040 --> 00:16:11,200 Speaker 1: indigenous collecting of palettes. Maybe they are okay there, but yes, 234 00:16:11,880 --> 00:16:16,040 Speaker 1: uh so goes would supplies, so goes the palette supply 235 00:16:16,600 --> 00:16:19,840 Speaker 1: is that is that a global fungible market is the 236 00:16:20,040 --> 00:16:23,960 Speaker 1: if if if Europe is facing a palette shortage, because 237 00:16:24,000 --> 00:16:27,040 Speaker 1: European countries get a lot of their wood from uh 238 00:16:27,280 --> 00:16:31,840 Speaker 1: Ukrainian timber, well that theoretically, if it becomes acute enough 239 00:16:31,880 --> 00:16:35,360 Speaker 1: spill over into either availability or price in the United States, 240 00:16:35,760 --> 00:16:39,440 Speaker 1: I don't think so. We are a woodbread basket. Clearly 241 00:16:40,400 --> 00:16:43,160 Speaker 1: we have had historically. The last time I was on 242 00:16:43,520 --> 00:16:47,120 Speaker 1: you know, you asked why the prices supply and demand? 243 00:16:48,000 --> 00:16:52,920 Speaker 1: But these the lumber industry that feeds the wood pallet 244 00:16:53,000 --> 00:16:58,720 Speaker 1: industry is rubber band. Uh. They can come back online 245 00:16:59,240 --> 00:17:03,800 Speaker 1: relative quickly and with housing demands still fairly high, we 246 00:17:03,840 --> 00:17:07,000 Speaker 1: have a lot of woods available here. I don't believe 247 00:17:07,040 --> 00:17:10,440 Speaker 1: that's the case. The other thing, when would supplies become 248 00:17:10,520 --> 00:17:13,200 Speaker 1: critical in a region or a country, and this is 249 00:17:13,240 --> 00:17:17,480 Speaker 1: true of the US over the years in the past decades, 250 00:17:17,800 --> 00:17:20,199 Speaker 1: Where do they do? They go elsewhere in the world 251 00:17:20,320 --> 00:17:24,400 Speaker 1: in import um Does that increase the price of the pallet? 252 00:17:24,520 --> 00:17:28,840 Speaker 1: Short does? Sure it does, But it is remarkable how 253 00:17:28,960 --> 00:17:36,320 Speaker 1: resilient long term, long term wood supplies are to a 254 00:17:36,400 --> 00:17:40,360 Speaker 1: huge consuming sector like the wood pallet sector. Will there 255 00:17:40,440 --> 00:17:44,119 Speaker 1: be interim times in which there is some impact on 256 00:17:44,160 --> 00:17:48,879 Speaker 1: supply and demand, yes, but we're seeing the prices of 257 00:17:48,920 --> 00:17:52,119 Speaker 1: pallets stabilized now in this country, and one of the 258 00:17:52,160 --> 00:17:57,280 Speaker 1: reasons is the clear adaptation of the raw material side 259 00:17:57,280 --> 00:18:02,120 Speaker 1: of that supply chain. So yes, short term, my friends, 260 00:18:02,160 --> 00:18:06,280 Speaker 1: for example, in the Czech Republican Melnick that company told me, Yeah, 261 00:18:06,320 --> 00:18:10,160 Speaker 1: it's it's hurting them short term. They're a Veneer company, 262 00:18:10,280 --> 00:18:16,119 Speaker 1: so they're buying very high quality logs. But long term, actually, 263 00:18:16,200 --> 00:18:18,600 Speaker 1: one of the reasons I'm working with him is to 264 00:18:18,720 --> 00:18:22,280 Speaker 1: bring those logs in from the US. Sorry, can you 265 00:18:22,320 --> 00:18:24,560 Speaker 1: go into prices in a little bit more details? So 266 00:18:24,800 --> 00:18:28,000 Speaker 1: I mentioned back in December, I think prices were at 267 00:18:28,080 --> 00:18:30,720 Speaker 1: almost fifteen dollars of palette something like that. You say 268 00:18:30,720 --> 00:18:34,679 Speaker 1: they're stabilizing at what level and how how low do 269 00:18:34,720 --> 00:18:37,320 Speaker 1: you think they might go or how long might might 270 00:18:37,359 --> 00:18:41,640 Speaker 1: it take to normalize? Yeah, supply and demand is it's 271 00:18:41,640 --> 00:18:45,400 Speaker 1: still tight. It is still tight. So when I said stabilized, 272 00:18:45,440 --> 00:18:50,000 Speaker 1: they've moderated at that level. Will they come back in 273 00:18:50,200 --> 00:18:54,800 Speaker 1: price very slowly? Will we recover let's say the ten 274 00:18:54,800 --> 00:18:59,840 Speaker 1: dollars to fifteen dollars. No, that's not going to happen. Uh, 275 00:19:00,040 --> 00:19:04,680 Speaker 1: that is more the nature of the market. Okay, Um, 276 00:19:04,840 --> 00:19:08,160 Speaker 1: it just like oil prices, the price of battle goes down, 277 00:19:08,160 --> 00:19:10,080 Speaker 1: maybe it takes a little while to reach the pump. 278 00:19:10,400 --> 00:19:13,840 Speaker 1: It's the same in the pallet sector. Okay, there will 279 00:19:13,880 --> 00:19:16,719 Speaker 1: be a lag. So when I say that the prices 280 00:19:16,720 --> 00:19:20,640 Speaker 1: are moderated or stabilized. Excuse me, that is correct? How 281 00:19:20,720 --> 00:19:24,040 Speaker 1: much have they come down only a little? How much 282 00:19:24,160 --> 00:19:28,359 Speaker 1: will they come down a little bit more than a little? Okay? 283 00:19:43,040 --> 00:19:48,000 Speaker 1: Other than prices, is there anything that this whole period 284 00:19:48,080 --> 00:19:53,479 Speaker 1: of intense stress on either pallette companies or users of 285 00:19:53,680 --> 00:19:57,359 Speaker 1: palettes are going to that will lead to fundamental change, 286 00:19:57,440 --> 00:20:00,360 Speaker 1: either in terms of construction techniques to be become more 287 00:20:00,359 --> 00:20:04,200 Speaker 1: efficient or usage techniques. Are there any productivity gains that 288 00:20:04,240 --> 00:20:06,040 Speaker 1: we're going to see come out of this in your 289 00:20:06,160 --> 00:20:10,199 Speaker 1: view that will pay off lasting dividends even after this 290 00:20:10,280 --> 00:20:14,560 Speaker 1: sort of like intense supply chain imbalance that we're seeing. Yeah, 291 00:20:14,560 --> 00:20:18,880 Speaker 1: I think we see a migration towards more reusable I 292 00:20:18,920 --> 00:20:23,359 Speaker 1: think it makes sense. And to make reusable even in 293 00:20:23,359 --> 00:20:26,840 Speaker 1: the world of pallets work, we have to manage them. 294 00:20:27,080 --> 00:20:31,040 Speaker 1: That becomes a key. Okay, So we're going to see 295 00:20:31,080 --> 00:20:36,520 Speaker 1: that continued expansion of reusables. In the case of wood pallets, 296 00:20:36,560 --> 00:20:40,840 Speaker 1: like the rental palate they check and pay Cove been 297 00:20:40,880 --> 00:20:44,159 Speaker 1: having trouble keeping up with the number of issues. Okay, 298 00:20:44,200 --> 00:20:47,639 Speaker 1: that's fine, but those pallets are reused. And of course 299 00:20:47,680 --> 00:20:50,439 Speaker 1: in the plastics and the non would we continue to 300 00:20:50,520 --> 00:20:54,359 Speaker 1: see that growth. Okay, So yes, I think we'll see 301 00:20:54,359 --> 00:20:59,600 Speaker 1: a trend towards more reusable slowly in this world, and 302 00:20:59,600 --> 00:21:04,320 Speaker 1: that us enhanced efficiencies. Okay, if you can manage them 303 00:21:04,359 --> 00:21:07,520 Speaker 1: and not lose them in this big country, in this 304 00:21:07,560 --> 00:21:11,120 Speaker 1: big country, that's a challenge, but I think that's one 305 00:21:11,160 --> 00:21:15,600 Speaker 1: of the things we are going to see occur. Well, Mark, 306 00:21:15,640 --> 00:21:17,520 Speaker 1: we're going to have to leave it there, But thank 307 00:21:17,520 --> 00:21:19,800 Speaker 1: you so much for coming back on all thoughts. Really 308 00:21:19,840 --> 00:21:25,200 Speaker 1: appreciate your your insights into military applications of palets. Thank you, 309 00:21:26,080 --> 00:21:43,960 Speaker 1: Racy Gerald. It's been my pleasure. So Joe, that was 310 00:21:44,000 --> 00:21:47,040 Speaker 1: a fun catch up with Professor White. It is amazing 311 00:21:47,080 --> 00:21:50,000 Speaker 1: how all these supply chains just operate in the background, 312 00:21:50,080 --> 00:21:52,800 Speaker 1: sort of hidden, and you never really think about them 313 00:21:52,880 --> 00:21:56,199 Speaker 1: until something actually happens, and then suddenly they come to 314 00:21:56,240 --> 00:22:00,440 Speaker 1: the forefront absolutely and it's interesting, like, look, we don't 315 00:22:00,480 --> 00:22:06,680 Speaker 1: really have tremendous visibility into many aspects of the current war, 316 00:22:06,840 --> 00:22:10,000 Speaker 1: let alone the specifics of Russian pallets supply. I mean, 317 00:22:10,040 --> 00:22:12,760 Speaker 1: I think a lot of people are just speculating, but 318 00:22:13,160 --> 00:22:15,879 Speaker 1: based on some of the images and the broader issues, 319 00:22:15,920 --> 00:22:18,320 Speaker 1: it stands to reason that this is like a source 320 00:22:18,359 --> 00:22:21,960 Speaker 1: of stress, uh for the military as it is for 321 00:22:22,040 --> 00:22:25,680 Speaker 1: many others. And thinking about like some of these principles 322 00:22:25,680 --> 00:22:30,840 Speaker 1: at play about unitizing military goods palletizing them and whether 323 00:22:30,920 --> 00:22:33,760 Speaker 1: that's being done effectively and how important that is to 324 00:22:33,920 --> 00:22:37,399 Speaker 1: the sort of execution of a war is uh, is 325 00:22:37,440 --> 00:22:39,439 Speaker 1: really interesting. Yeah. I mean, look, it wouldn't be the 326 00:22:39,440 --> 00:22:42,760 Speaker 1: first time that a battle is one or lost based 327 00:22:42,800 --> 00:22:45,000 Speaker 1: on supply chain issues. And you do see some of 328 00:22:45,000 --> 00:22:49,320 Speaker 1: these photos of Russian soldiers bringing out boxes from tanks 329 00:22:49,359 --> 00:22:53,080 Speaker 1: and trucks and things like that, and it does seem 330 00:22:53,119 --> 00:22:56,320 Speaker 1: like there, I don't want to say just organized, but 331 00:22:57,160 --> 00:23:00,000 Speaker 1: pallets do seem to be missing from some of those images. 332 00:23:00,160 --> 00:23:03,720 Speaker 1: It seems it seems extremely inefficient. It's also just interesting, 333 00:23:03,880 --> 00:23:07,800 Speaker 1: like think hearing Mark talk about this sort of the 334 00:23:07,840 --> 00:23:12,000 Speaker 1: differences in working with the military verses, both in terms 335 00:23:12,000 --> 00:23:14,199 Speaker 1: of you know, just the priorities are different. It's not 336 00:23:14,280 --> 00:23:17,439 Speaker 1: always about finding the absolute cheapest and their issues of 337 00:23:17,480 --> 00:23:23,119 Speaker 1: sustainability and durability and being able to weather different kinds 338 00:23:23,160 --> 00:23:28,120 Speaker 1: of environmental conditions than a commercial palette. So very interesting 339 00:23:28,160 --> 00:23:30,479 Speaker 1: to uh get a little bit of taste, It's not 340 00:23:30,560 --> 00:23:32,240 Speaker 1: our normal thing, but to get a little bit of 341 00:23:32,280 --> 00:23:35,119 Speaker 1: taste for how the supply chain story fits within the 342 00:23:35,160 --> 00:23:39,080 Speaker 1: military context. Yeah. Also wild too to hear about the U. S. 343 00:23:39,200 --> 00:23:43,239 Speaker 1: Army developing a coding for military power to protect from 344 00:23:43,320 --> 00:23:46,679 Speaker 1: chemical warfare. Absolutely. This has been another episode of the 345 00:23:46,680 --> 00:23:49,399 Speaker 1: All Thoughts podcast. I'm Tracy Alloway. You can follow me 346 00:23:49,560 --> 00:23:52,320 Speaker 1: on Twitter at Tracy Alloway and I'm Joe wi Isn't All. 347 00:23:52,400 --> 00:23:54,960 Speaker 1: You can follow me on Twitter at the Stalwart. A 348 00:23:55,040 --> 00:23:58,359 Speaker 1: big thanks to our producers, Colin Tipton and Magnus Henriksson. 349 00:23:58,880 --> 00:24:02,520 Speaker 1: Follow the Bloomberry head of podcast Francisco Levi at Francisco Today, 350 00:24:02,680 --> 00:24:05,520 Speaker 1: and check out all of our podcasts at Bloomberg onto 351 00:24:05,560 --> 00:24:08,080 Speaker 1: the handle at podcasts. Thanks for listening.