Wood Container and Pallet Manufacturers NAICS 321920

Oct 4, 2025 - Fresh Round of Tariffs on Lumber, Wood

• A new round of tariffs taking effect in mid-October could pressure margins for manufacturers of wood containers and pallets. Beginning on October 14, 2025, the US will add 10% tariffs on lumber and timber, according to Supply Chain Dive. The wood tariffs stem from a Section 232 investigation lasting several months, which was delivered to President Trump in July. The investigation found that the volumes of wood imports and trade actions by foreign governments related to wood threaten national security. The Trump administration has also used Section 232 tariffs to increase steel and aluminum import duties.
• US manufacturing activity improved slightly in September 2025, but remained in contraction territory, according to the Institute for Supply Management (ISM). The ISM’s Purchasing Managers Index (PMI) rose 0.4% to 49.1% in September from a reading of 48.7% in August. A reading above 50% indicates manufacturing expansion. September's New Orders Index decreased by 2.5 percentage points to 48.9%. The September Production Index rose 3.2 percentage points to 51%. Several respondents to the September ISM survey said their businesses faced tariff-related purchasing and supply chain challenges. Of the 18 manufacturing industries tracked by the ISM, five reported growth in September: petroleum and coal products; primary metals; textile mills; fabricated metal products; and miscellaneous manufacturing. Industries reporting contractions in September included wood products; apparel, leather, and allied products; plastic and rubber products; paper products; furniture and related products; chemical products; electrical equipment, appliances, and components; transportation equipment; nonmetallic mineral products; machinery; and computer and electronic products.

• US manufacturers’ shipments of durable goods, a demand indicator for wood containers and pallets, decreased 0.2% in August from the previous month, and were up 2.6% compared to August 2024. New orders for durable goods, a signal of future wood container and pallet demand, increased 2.9% in August from July and rose 5.4% over August 2024. Excluding aircraft, core capital goods orders increased 0.6% in August following a downwardly revised jump of 0.8% in July. Economists polled by Reuters had expected a 1% decline in core goods shipments in August. Reuters suggests the rise in the value of orders in August was likely due to higher tariff-related costs rather than an increase in goods volume.
• Logistics trends and increased automation could lead to less pallet demand by the warehousing industry, according to Pallet Enterprises. Industry insiders have noticed some distribution centers still use pallets for inbound and outbound shipments but have reduced or eliminated pallet use in warehouse management as the industry relies more on automated systems. Increasingly, warehouses are using more automated storage and retrieval systems (AS/RS) that leverage shuttles, load-carrying robots, vertical-lift modules, and robotic pickers. Rather than full pallets, AS/AR systems rely on smaller containers, such as totes, bins, and cartons. However, smart pallets that integrate with warehouse management systems - including sensor-equipped racks, real-time inventory tracking, and dynamic slotting - represent an industry opportunity.