1. What’s on the Mind of Today’s Western Pallet Supplier?

2. What is Important to Me?  Changing Export Laws  Who’s the Competition?  Future of the Alder GMA  Pallet is Just a Pallet …..Right?  What’s in store for the Western Pallet Guy  Lumber Price & Availability

3. Exporting Goods with Wood Packaging  Who’s in Charge?  International Plant Protection Convention  Overseen by World Trade Organization

4. What is the Goal?  To stop foreign insects from migrating from one continent to another via wood packaging materials – Pallets, Crates & Dunnage  A paperless regulatory program that meets the rules set-forth by each & every country who have signed on to participate without formal documents

5. How do we Meet the Goal?  Global Agreement – International Standard for Phytosanitary Measures - ISPM 15  Heat-treatment  Softwoods & Hardwoods  Core temperature of 56 degrees Celsius for minimum 30 minutes  Fumigation  Methyl Bromide  Will become illegal except for Export purposes – Bad for the Ozone  New Methods being Explored by many Governments  Could take years  Plus side Fumigation is a part of the Third Party Certification Programs  Paperless Trail

8. Key Word – GOVERNMENT And a lot of them !

10. GOVERNMENT  134 Nations  Layer upon Layers of government authority with varying degrees of understanding  Things as simple as language  Bureaucracies with competing interests  Countries with official & unofficial procedures  Any one level capable of delaying Port entry & added unanticipated costs to shipper

11. What makes this so Delicate?  134 Countries with wide range of Wealth & Technology  Larger Countries leading the way, trying to accommodate those with few resources  No one wishes to break the Treaty because of the long term benefit to protect against pests  Nor does any Country wish to start a Trade War

12. The Delicate US Side of it All  US Homeland Security  Adding multitude of rules is complicating issues  US Trading Partners are asking for delays on Non-National Security regulations – ISPM 15

13. China  Still not Signed on to ISPM 15  Will Except  Hardwoods properly marked “NC-US”  Softwoods – KDHT  All with proper documentation  Will not Except  Fumigation

14. Will this Ever be Resolved?  Doubtful  Though a treaty is in place – No Country will give up their Sovereign right to change Policy to it’s best interest  Another delicate piece of the governmental coin

15. Bigger Part of the Global Supply Chain  Customer ship over seas……so do you!  Complexities are now on our shoulders to serve our customers  What do you do?  Act as if the IPPC program was in effect  Sign up with a Third Party company over seeing Compliance  Must still stay up to date with the change made by Countries you Customers ship to

16. BE PATIENT!!!!!!!!!!!!!!  www.palletcentral.com  www.aphis.usda.gov www.aphis.usda.gov

17. Who’s the Competition – Both to the Pallet Mfg., Recycler & you the Hardwood Supplier  Third Party Pallet Rental  Chep  Peco  Used GMA Pallets

25. Future of the Alder GMA Pallet  Increase need as GMA Pool ages Nation-wide  Re-design to Block pallet with or without Alder  Our question to you…”will you be there for us?”  Limited options – Mid-West Hardwoods, Aspen, South American Eucalyptus  Not without a cost!

26. Pallet is Just a Pallet….right?....don’t think so.  Becoming a crucial part of Exporting  Just can’t put on the boat or plane anymore  Pallet Management Program  Repair  Retrieve  Reuse  Radio Frequency Identification Device – RFID  Wal-Mart

27.  Success will Require more than just being Cheaper than the other guy  Ability to serve both Small & Larger customers JIT  Think Like the Big Guy  Running a Successful Pallet Company will not mean working for a wage  Re-investing more back into the company  Smarter Faster Equipment  More trucks for JIT & traffic  Need for more support staff as customer needs become demanding & complex

28. What’s in Store for the Western Pallet Guy?  ALL of the ABOVE!!!  Consolidation &/or new faces as current owners retire  Aging ownership  Sold or Next Generation  Many Dependent on the Manufacturing Sector  Currently shrinking – Offshore  Those Serving Agriculture Sector  Facing Third Party Pallet Programs & RPC  Chep & Peco  GMA Pool Aging Rapidly  Lumber Prices  Lumber Availability

29.  Growth  Starting to show signs of recovery from 9/11  Future Looks to be Global  New Future Player on the block  China  Former Soviet Union  Brazil  Always Remember that your Customer Signs your Pay Check

30. Thank you !!!!