Pallet Shortage Impacts Produce Industry Supply Chain

The escalating price of lumber is front page news when it comes to home building and renovation.  But limited supply and skyrocketing lumber prices is impacting a host of industries, including the fresh fruit and vegetable industry.

With lumber prices many times higher than a year ago, wood pallets are more expensive and harder to find, adding cost along the fresh produce supply chain.

CHEP, one of the largest pallet companies in the world, addressed the prices on its website, explaining, “You are now paying 10 to 20% more to buy exchangeable wooden pallets than you were last year. What is more, you sometimes have to wait weeks for them to be delivered. What’s going on? Why has the price of wooden load carriers suddenly skyrocketed?”

The reasons include higher prices for pallet wood, less logging, fewer sawmills, higher demand from China, and more.

CHEP also sent a letter to supply chain partners explaining some of their actions to improve the problem, including growing the pallet pool, realigning staff for better support and increasing investment repairs.

Both the Produce Marketing Association and the United Fresh Produce Association have sent alerts to their members about the pallet shortage, warning members that the situation will likely continue for many months.

The United Fresh Produce Association’s alert noted, “The lack of pallets is adding stress to a supply chain that is already facing significant challenges which include a lack of available trucks and shipping containers, ongoing labor challenges, fluctuating fuel costs, pandemic-related challenges and a pending shortage of resin used to make reusable containers and pallets.

“At this time expectations are that the pallet shortage will continue for months, perhaps for the balance of 2021 – all at a time when many North American produce items are just beginning seasonal harvests and shipments.”

Source: Blue Book Services, Inc.