Frank Shean, president of Valley Pallet Inc. stands next to the pallet repair line April 2 at Valley Pallet. Besides making new pallets, his company also repairs and recycles old pallet.
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Frank Shean, president of Valley Pallet Inc. stands next to the pallet repair line April 2 at Valley Pallet. Besides making new pallets, his company also repairs and recycles old pallet. (RICHARD GREEN/THE SALINAS CALIFORNIAN)

BY ROBERT WALCH • For The Salinas Californian • April 10, 200

Frank Shean spent nearly 20 years in the oil-distribution business before he joined Valley Pallet in 1996. At the time, the company was based in Salinas with a branch in Yuma, Ariz.
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Established nine years earlier, Valley Pallet was a recycler of wooden pallets used primarily in the produce industry. After working for the company for nine years, Shean purchased it in 2004.

Explaining how his business works, Shean said that today Valley Pallet has contracts to handle damaged pallets from major distribution centers operated by retailers such as Target, Home Depot, Pet Smart and Staples.

The damaged pallets are transported to one of the firm's six production facilities, where they are reconditioned. They are then sold to customers who need pallets to warehouse or ship their goods.

Shean said that although the business operates year around, it is definitely sensitive to seasonal swings in volume. Retail customers will build up inventories for the holidays so they will purchase additional pallets in late summer as their distribution centers begin to fill. In the Salinas Valley, fresh produce needs fall off during the late fall and winter, but then the need for pallets begins building in the spring.

Because of this ebb and flow there's a need to adjust the reconditioning and the production of pallets to meet these surges in demand. To address this situation and the increase in its client base, Valley Pallet expanded its production to also include the manufacture of new pallets to compliment its recycling program.

"In the early days, we were mainly an ag supplier, but when we began serving clients in other sectors like retailing, building products, and general manufacturing, it was necessary to produce a wider range of pallets," Shean said.
Since the company acquired a fleet of trailer trucks to transport the pallets, Valley Pallet also branched out into logistics and transportation services to maximize the use of its equipment. During the year their trucks will haul a range of goods from grapes and corrugated boxes to ag equipment.
When damaged pallets are beyond the point where they can be repaired, they are torn down. Some components are salvaged for use in reconditioning other damaged pallets. What remains is ground up for use in cogeneration plants, turned into mulch for landscaping or sold to pressboard manufacturers.

"We produce about 30 tons of ground-up material each day," Shean explained. "Even the nails from the old pallets are recycled."

Although there are some companies that manufacture plastic and even steel pallets, wood is still the most common material used because the initial manufacturing cost is so low. Reconditioned wooden pallets are the most cost efficient.

Shean also pointed out that wooden pallets are constructed from what he called the "less desirable part" of harvested trees.

"After cutting the tree up for lumber, the material that remains is either used to make pallets or turned into wood chips," he said. "We aren't cutting trees down just to make pallets. This is a by-product of the lumber industry."

Addressing the issue of rental pallets, Shean said that companies that elect to rent a pallet may initially spend less money than purchasing it outright, but if the pallet is lost they will be billed for its replacement. Even with tracking devices, loss does occur. Also, after their use, the rental pallets must be returned to the owner and that can sometimes be a headache.

Current innovations in pallet construction center on new composite materials that weigh less but still provide strength and durability.

Since Valley Pallets has a wide range of clients, Shean said that although there has been a decreased demand in the last couple of years, it has not been felt equally across the board. For example, there was a considerable drop in demand for pallets from the building supply sector but pallet usage for fresh produce has not declined as much.
"Thanks to our diversification we have been able to withstand the downturn better than some of our competition," he said. Looking to the future, the president of Valley Pallet believes that when the economy does begin to turn around, his may be one of the firms to see it first because the demand for pallets will begin to climb.