Pallet availability and the resulting costs related to demand exceeding supply, have now been added to the list of casualties since Russia went to war against Ukraine on February 24.
Prior to the invasion, pallet production and distribution were already in short supply, adding to existing Covid-related supply-chain concerns by creating more challenges in packing, handling, and the storing of goods.
According to a French trade association representing 120 companies, La Chaîne Logistique du Froid, pallets are becoming more and more difficult to find.
It listed raw materials required for pallet production, especially wood, as the main reason for the worsening shortage.
As a direct consequence of the situation, the per-pallet price has spiked from €7 to €29 (R487.66).
The most important reason for the steep increase in price is believed to be the situation in Ukraine, a major producer of industrial wood and exporter of pallets.
It is no longer able to provide the 15 million pallets per annum for supply-chain use all over the world because of the havoc Russia has unleashed.
It’s also not just because of the war in Ukraine that the pallet industry is nosediving.
The sanctions that have been implemented against Russia and its associate in the offensive against Ukraine, Belarus, have contributed to the situation as the three countries together are responsible for 25% of global pallet use.
Because of the shortage, the price of recycled pallets has also gone up in Europe, from €4-5 to €10 (R167.61).
La Chaîne Logistique du Froid executive, Valérie Lasserre, told Stuart Todd of the Loadstar: “Without pallets, supply processes cannot be carried out successfully. It is urgent to sit down around the table to find a better balance between supply and demand.”
