PSCI™ methodology.

This document specifies the methodology, composition, calculation, source licensing, and governance of the Pallet Solutions Cost Index™ (PSCI), a weekly composite of cost-input variables that drive pallet pricing. The PSPI demand-pressure index methodology lives in the appendix at the end of this document.

PSCI is a reference index. It is not an investment product, not a contract, and not a financial benchmark regulated by IOSCO. Pallet Solutions is the publisher; the underlying federal data is in the public domain. Any party may construct an equivalent index using the same public sources - we disclose the formula and the source licensing so any user may reproduce or audit our calculation.

Production code paths fetch directly from BLS, EIA, and Census public APIs (api.bls.gov, api.eia.gov, api.census.gov). FRED is research-only and never appears in production calculations or citations.

Pallet Solutions describes PSCI as “the only publicly-available pallet cost-input intelligence published at the individual region level.” That claim depends on four qualifiers, all of which must hold for the claim to be defensible. We list each qualifier and the comparison it survives:

Procurement audiences and competitors will examine our sources. We make our licensing posture explicit upfront.

Public-domain federal data

All five PSCI components are sourced directly from US federal agencies (BLS, EIA). These are public-domain datasets. Pallet Solutions ingests, transforms, and republishes these data in derivative composite form with full source attribution. No license fees apply. No third-party permission is required. Citation includes the agency name and series identifier on every published value.

Licensed third-party sources (cite-and-link only)

Several authoritative industry sources are referenced by name in this methodology - DAT, Cass, ATA, ISM, Random Lengths, Fastmarkets RISI, CBRE, JLL, Cushman, Bloomberg. Pallet Solutions does not ingest, store, redistribute, or recreate the data series of any of these sources. Where we mention them, we link to their free public-facing pages and identify them as the source for buyers seeking that specific data.

PSCI measures the weighted movement of cost inputs that determine pallet manufacturer prices. A 1% increase in PSCI corresponds to approximately 1% upward pressure on pallet prices, holding other variables constant.

Each component is normalized to a base period (January 2024 = 100). Weekly component values are computed by:

• For monthly series (BLS), the most recent published value is held constant for all weeks in the month following the release date.
• For weekly series (EIA diesel), the released value is used for the corresponding week.
• Component normalization: ComponentIndex_t = (ComponentValue_t / ComponentValue_base) × 100

PSCI is calculated as the weighted geometric mean of normalized components:

PSCI publishes values at the individual region level for six US regions. The base formula and weights (40-20-20-15-5) are constant across regions; in the current method, only the diesel input is localized to the region's PADD - every other input is national. Per-region wages and a California / Pacific Northwest split are on the roadmap (see note below).

Market Pulse publishes each region's read individually - free for buyers. The Tuesday Read publication and PSCI headline value remain national.

• Released every Tuesday at 10:00 AM Eastern, reflecting the prior week's data.
• Published values are final at release; restatement only for source-data revisions per §09.
• The Tuesday Read (free, national) and Market Pulse regional editions (free, per-region) both publish from the same canonical data/psci_latest.json snapshot. No parallel pipelines.

When a BLS or EIA component does not publish a fresh observation by its scheduled cadence, PSCI applies the following protocol rather than suppressing the index outright. This rule formalizes practice first applied on May 19, 2026 when BLS had not yet released the April observation for CES4349300008 (Warehouse Worker Earnings, 15% weight).

A component's most recent observation may be carried forward into the current week's PSCI calculation IF both:

• The component's observation age is at or below its calibrated maximum (typically ≤90 days for monthly BLS series, ≤14 days for EIA weekly diesel)
• The total weight of all carried-forward components does not exceed 30% of the index

Restatements of previously-published values appear as separate publications, not silent corrections, with the following format:

The AI Forecast Layer is an optional forecasting overlay applied to PSCI cost inputs. It produces probabilistic 30-day forward projections with confidence intervals. The Forecast Layer is not a separate index, and the underlying PSCI is unaffected by this overlay. It is published alongside PSCI as a procurement timing signal, not as a substitute for vendor quotes and not as a price prediction.

As of v1.5 (June 11, 2026), the projection is published per region as well as nationally. Method:the four shared national components (wood pallet, lumber, wages, OCC - old corrugated containers) are forecast once; each region's PADD (Petroleum Administration for Defense District) diesel series is forecast separately, with its pump price normalized to that PADD's own January 2024 = 100; the per-region projection is composed by the published weights (0.40 / 0.20 / 0.20 / 0.15 / 0.05, geometric). The band is composed comonotonically - the per-component 80% bounds composed by the same geometric weighting. This mirrors the national pipeline exactly, with one substitution per region.

Model: TimesFM 2.5 via BigQuery AI.FORECAST, 30-day horizon, nominal 80% interval. Refreshed weekly, Tuesdays, after federal data drops.

How the method was chosen:a composite-direct approach - forecasting each region's composite series in one pass - was tested first in a rolling-origin backtest, failed calibration, and was discarded. The shipped method is the one that backtested closest to its nominal setting. That sequence - test, discard, ship what passed - is the audit-defensibility argument for this section.

Regime split (component-wise regional): 83.3% coverage in the windows before the early-2026 cost run-up, 63.3% during it - calibrated overall, softer when the market turns fast. That behavior is disclosed on every surface that renders the regional band.

We label the regional band with its measured coverage, not its nominal setting. The national pipeline backtested at its nominal 80% and is labeled accordingly.

Full backtest - every cut point, forecast, band, and actual: regional-forecast-backtest.md. Live out-of-sample tracking continues weekly and the coverage figure will be updated as windows accumulate.

If a procurement team is going to defend a sourcing decision against an internal challenge, they should be able to cite this section.

PSCI weights and composition (unchanged through v1.5) were chosen from input-cost shares for NAICS 321920 (wood pallet manufacturing) as documented in BLS PPI methodology and published industry-cost-structure analyses. The weights are reasoned approximations, not the output of a regression analysis against observed pallet pricing.

As Pallet Solutions accumulates buyer-side transaction data through OMS managed-programs operations, future methodology versions may publish empirical correlation between PSCI and observed pallet pricing across managed corridors, weight refinements informed by observed price elasticity, and regional sub-indices for buyers with concentrated regional footprints. We call this approach operator-grounded forecasting -forecasts published by entities that operate within the system being forecasted, using proprietary ground truth to validate model output.

• PSCI: every Tuesday, 10:00 AM ET. The Tuesday Read sends after federal data drops.
• PSPI: second Friday of each month, 10:00 AM ET (see appendix).
• BLS PPI release: typically 11th-14th of each month.
• EIA weekly diesel: Mondays, 5:00 PM ET.