A world-wide shortage of timber that has plagued the construction industry is driving up the price of shipping pallets. In the United States the Produce Marketing Association, which represents the production, packaging, and retail segments of the fresh produce (including greenhouses) and floral industries, reported the surge in new house and renovation construction is consuming most of the wood available from the mills and that the price for lumber s at all all-time high. Source: Timberbiz
The association reported that there is a shortage of all pallets, not just CHEP and PECO pallets. White pallets (lower quality and not always rackable) also are not available.
And The Australian reports that timber shortages have made CHEP pallets, used to transport anything from TVs to potatoes, more expensive after their maker Brambles introduced a surcharge, reaping US$60m ($82.3m).
The company said that it battled higher lumber costs and shortages in the second half – sharing the pain of many Australian renovators and home builders who have been struggling to access structural pine.
“Inflationary pressures accelerated in the second half of the year with higher lumber and transport costs in all regions,” chief executive Graham Chipcase told The Australian.
“Lumber costs were driven by increased demand and supply challenges which impacted pallet availability and resulted in both higher pallet capex costs and increased repair costs.
“The impact was particularly evident in the US and resulted in record levels of lumber inflation and industry-wide pallet shortages in key markets, with manufacturers and retailers also increasing pallet balances across their operations to avoid disruptions to their supply chains.”
The Produce Marketing Association said: “although conversations are occurring within the North American (and global) industry about the current acute pallet shortages we believe that many do not yet realize hte factors impacting the situation and the potential scope fo the issue, including the availability of produce to consumers”.
“If there is not a concerted effort across the supply chain to ensure pallet availability for shipment of produce, there is little doubt that it will be very difficult, if not impossible, for the grower/shipper community to meet buyer, and ultimate consumer, demand for produce,” the group said in a statement.
“Simultaneously, growers and shippers are working hard to remain compliant with pallet requirement specifications where the can, but this is proving challenging. Temporary modifications or exceptions to pallet requirements, as long as they do not jeopardize safety, would prove advantageous until this pallet shortage is resolved.”
