Shipping pallets being targeted for theft

Police say the theft was an inside job: Two employees of a St. Charles, Ill., food services 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.

A few years ago, companies let pallets pile up in factory yards, but now, experts say, the rising price of lumber has made them valuable enough to steal.

“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. “But if guys do this twice a month, they’re making a good living and not getting caught.”

A decade ago, most companies threw away their worn-out pallets: One study found that more than 4 million tons went into landfills in 1995, making up 1.4% of the waste stream.

Bruce Scholnick, president of the National Wooden Pallet and Container Assn., said the cost of wood went up as sawmills became more efficient. They were able to use a greater portion of each log for furniture or building materials, leaving less of the 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 a wide variety of goods, 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 over three years, his business lost 100 trailers full of pallets. Thieves slipped into his lot, hitched the trailers to their own trucks and drove away. Police later found the trailers abandoned, their contents presumably sold to unscrupulous pallet dealers, Cosentino said.

Tim Hagan, manager of Commercial Pallet on Chicago’s West Side, has found that enterprising scrappers don’t let the lack of a truck prevent them from stealing. He said he had caught people sneaking onto his property and heaving the 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’re after.

Each year, the U.S. Postal Service buys 2 million pallets made of plastic -- a material chosen for its durability and compliance with international sanitary regulations -- at 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 on suspicion that he ordered nearly 10,000 excess pallets, then sold them to a recycler for $1 apiece.

There has been talk within 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 suspected of trying to steal 160 pallets from a food services business. After the loss of hundreds of skids in thefts, company managers were keeping an eye on the loading dock and called authorities when they saw two employees loading pallets into a tractor-trailer, police said. Officers stopped the truck as it left the company, and the three men were charged with felony theft.

The Northern Illinois Auto Theft Task Force snooped a little harder to make its bust. When someone made off with a trailer belonging to Northwest Pallet Supply 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’s serving four 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 see a positive side to the thefts.

“You don’t see them 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.”

Scholnick of the pallet association says 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.