Pallet, Packaging Sectors Face Uneven Recovery as Trucking Costs Rise
The shipping pallet and packaging sector remains uncertain as U.S. trucking rates show only a fragile recovery, despite cautious optimism among companies for the second half of 2026.
Because more than 90% of global goods move on pallets, demand for wood pallets, repair activity and rental rates are widely viewed as reliable real-time indicators of freight demand and overall economic activity.
Brent McClendon, president and CEO of Woodpack Global — an international trade association representing pallet manufacturers in 43 countries — said demand remains uneven as diesel prices rise and trucking capacity tightens.
“When you’re connected to 90% of the goods that move, some sectors are strong while others are not,” McClendon said.
He noted that companies supplying military-related industries are performing well, while other sectors remain sluggish.
“January and February looked stronger, but March and April were weaker. It’s that ‘fits and starts’ pattern — that uncertainty — that has everyone uncomfortable,” he said.
Meanwhile, Pennsylvania-based pallet manufacturer TMF Corp. told the Journal of Commerce that production has slowed as customers increasingly reuse pallets to reduce transportation and raw material costs.
TMF’s weekly pallet production has declined to about 15,000 units from a peak of 20,000, reflecting softer demand and more cautious spending by customers.
While pallet reuse helps shippers lower short-term costs, it has also tightened pallet availability and could lead to restocking later this year if freight demand improves.
Some recovery signs are beginning to emerge.
Packaging Corp. of America President Thomas Hassfurther said during a recent earnings call that volumes have started rebounding after a weak first quarter, traditionally the slowest period of the year.
“The first quarter is by far the weakest in terms of volume, and then it accelerates through the year,” Hassfurther said. “The good news is it has returned in the second quarter as forecast, giving us flexibility to improve operational efficiency.”
Still, freight market data suggests current trucking rate increases are being driven more by tightening capacity and higher fuel costs than by a major surge in demand.
DAT Freight & Analytics reported that trucking rates continued rising through April as diesel prices increased and truck availability tightened. In some regions, diesel prices are more than $2 per gallon higher than a year ago.
Excluding fuel surcharges, national dry-van spot rates rose 25% year over year to $2.00 per mile, while refrigerated rates climbed 22% to $2.36 per mile. Flatbed rates increased 27% from a year ago to $2.69 per mile, nearing record highs due to strong construction, energy and industrial demand.
Industry participants also said stricter enforcement of English-language requirements and crackdowns on non-domiciled commercial drivers have further reduced truckload capacity after a prolonged freight downturn.
Packaging Corp. of America said it plans to implement price increases in 2026 to offset rising raw material and transportation costs.
“Containerboard prices are up a net $50 per ton since the beginning of the year, and we are working with customers to implement increases,” Hassfurther said.
