How Supply Chain Crises Affects Pallets

While there has been focus on the number of shipping containers being caught up on the other side of the world due to the crisis around the Red Sea and Suez Canal, the situation is certainly not helping the ongoing shortage of wooden pallets.

Other geopolitical tensions such as the war in Ukraine and disputes between the United States and China, have affected the availability and pricing not only of pallets, but of raw materials needed for their manufacture – primarily timber.

Over the past few years, the production and supply of timber has been subject to natural disasters, increased demand and disruptions in the global supply chain, which has not yet fully recovered from the impact of the COVID-19 pandemic.

While all this has kept wooden pallet prices volatile, there’s now another snag – the shortage of nails. Approximately 90% of nails required for pallets are manufactured from Russian steel. Each pallet requires approximately 80 nails. The war in Ukraine and the subsequent European trade sanctions against Russia, have affected nail supplies and created a shortage. This is noticeably impacting the availability of wooden pallets in Europe.

An alternative is the reusable plastic pallet, which has an average lifetime of 10 years – and does not need nails to hold them together.

Critics are quick to point out that the world ought to be producing less plastic, not more, and a website called Wood Central says, “Pushing, sliding, or dragging plastic over metal surfaces such as the trays of transport trucks or the floor of metal containers will create static electricity. This can be a severe safety issue. So … wood is far more efficient than plastic.”

Effective management of the timber supply chain is crucial for securing a consistent supply of timber and pallets and overcoming the challenges associated with supply chain disruptions and shortages. This is an issue for industry leaders and state governments.

Importers and exporters are encouraged to work with their pallet suppliers to maintain a viable management program, ensuring pallets are where they are needed – when they are needed. Pooling is one option to improve efficiency through the supply chain further. This often means you are renting the pallets, which may enable better budget control.

Both containers and pallets are likely to be in short supply – or, at least not in the right place at the right time – during 2024. Don’t be caught out, talk to your providers of logistics and equipment to plan ahead.

See this related article from our archives: Pallet Shortage: The Next Jolt to the Supply Chain

For correct information about all your imports and export requirements, including associated fees and charges, contact us here at Colless Young. As licensed Customs Brokers and International Freight Forwarders, we take care of your cargo economically and professionally. Based in Brisbane, Colless Young provides a complete range of logistics services, including trucking and warehousing. We handle sea cargo and airfreight, at all major Australian ports and airports.