With lumber prices climbing, Chicago is sitting at a crossroads between crime and commerce
Wood pallets are good as gold to some crooks
By John Keilman
Tribune staff reporter
Published April 30, 2007
The theft, police say, was an inside job: Two employees of a St. Charles food service company waited until the coast was clear, then helped a confederate make off with a truckload of hot merchandise.
The men weren't after fur coats or flat-panel TVs, but something that not long ago was little more than landfill chum -- a mess of wooden shipping pallets.
Pallets pay
Experts say the spiraling price of lumber has made pallets valuable enough to steal, a sharp contrast to just a few years ago when companies let them pile up in factory yards. By some estimates, nowhere in the country sees more of these timber thefts than the distribution hub that is greater Chicago.
"I would imagine it's more frequent and unreported than it should be," said investigator Patrick Staples of the Northern Illinois Auto Theft Task Force, which last year arrested a man for swiping a trailer full of pallets worth about $2,300. "But if guys do this twice a month, they're making a good living and not getting caught."
A decade ago, companies traditionally threw away their worn-out pallets: One study found that more than 4 million tons went into landfills in 1995, making up 1.4 percent of the waste stream.
But Bruce Scholnick, president of the National Wooden Pallet and Container Association, said the cost of wood went up as sawmills became more efficient. They were able to use more of each log for furniture or building material, leaving fewer lower-grade scraps that are turned into skids. That caused the price of wooden pallets to rise to about $5 apiece -- and criminals took notice.
For decades, wooden pallets have been the favored platform for transporting everything from bananas to bongo drums, their double-deck shape built to accommodate forklifts. With 2 billion in circulation, they account for the largest single use of U.S. hardwood lumber, according to the pallet association.
Brian Cosentino, president of Skid Recycling in Naperville, said that during a three-year period his business lost 100 trailers full of pallets. Thieves slipped into his lot, hitched the trailers to their own trucks and drove away. Chicago police later found the trailers empty and abandoned, their contents presumably sold to unscrupulous pallet dealers, Cosentino said. As a crowning insult, he had to pay a towing company about $1,000 to get a trailer back.
"[The thieves] are pretty clever," he said. "They know what they're doing. If a plant closes at 5:30 in the afternoon, they'll show up at 6 p.m. and grab the pallets."
Enterprising thieves
Tim Hagan, manager of Commercial Pallet on Chicago's West Side, has found that enterprising thieves don't let the lack of a semitrailer truck prevent them from stealing. He said he has caught people sneaking onto his property and heaving 50-pound skids over the fence.
"If they'd work that hard during the day, I'd hire them," he said.
The trade magazine Pallet Enterprise has called Chicago, with its constellation of warehouses and factories, the nation's hotbed for this thievery. But with black-market prices ranging from $1 to $4 per skid, crooks have been at work from coast to coast, and it's not just wood they are after.
Each year, the U.S. Postal Service buys 2 million pallets made of plastic -- a material chosen for durability and compliance with international sanitary regulations -- at a cost of about $22.75 apiece. An indeterminate number of those replace pilfered skids, said postal inspector Amanda McMurrey.
The Postal Service gives pallets to bulk mailers to make deliveries more efficient, but some exploit the service. In February an employee of a mail house near Atlanta was arrested after he allegedly ordered nearly 10,000 excess pallets, then sold them to another company for $1 apiece.
"Wherever there's money to be made, there will be someone there to take advantage of it," McMurrey said.
Low-tech answers
There has been talk in the industry of attaching radio tags to skids, making them easier to track and identify, but for now pallet dealers are relying mostly on low-tech solutions. Some have attached heavy-duty chains to their gates, and others have installed special locks on their trailers, making them harder to hitch to rogue trucks.
St. Charles police say old-fashioned surveillance led to the arrests last month of three men who allegedly tried to steal 160 pallets from Compact Industries, a food services business.
After losing hundreds of skids in earlier thefts, company managers kept an eye on the loading dock and called authorities when they saw two employees loading pallets into an accomplice's semi, police said. Police stopped the truck as it left the company, and three people were charged with felony theft.
The Northern Illinois Auto Theft Task Force, based in Rockford, snooped a little harder to make its bust. When someone made off with a trailer belonging to Northwest Pallet Supply Co. in Belvidere last year, the task force followed a GPS trail to a row of cargo distributors near O'Hare International Airport.
Staples, the investigator, figured out that the thief had used a phony invoice to sell the pallets to one of the cargo companies. The man, who was soon identified though security camera footage and a photo lineup, was convicted of felony theft. He is serving 4 years in prison.
The rash of thefts partly explains why Cosentino, of Skid Recycling, recently got out of the business, becoming a pallet broker instead. But some say the rip-offs have a positive side.
"You don't see [pallets] lying around anywhere," said Brooke Beal of the Solid Waste Agency of Northern Cook County. "I live in the city, and you see people push them down the street in shopping carts. Five, six, seven, 10 years ago, you would see them in the garbage."
As the pallet association's Scholnick noted, the thefts are a reminder of the ravenous demand for his industry's product.
"When a pallet suddenly has that much value, it's good," he said.