Produce industry associations alert customers and other trade groups regarding the current pallet disruption and availability concerns.
The produce industry has been vocal in warning participants of the current pallet availability situation, with statements issued by the Produce Marketing Association and the National Watermelon Association.
According to reports, the Produce Marketing Association sent this message recently to its members, outlining the present tight availability for pallets:
“There is currently a shortage of all types of pallets available for rent or sale in the U.S. This is not unique to just the produce and floral industry.
PMA’s VP of Supply Chain and Sustainability, Ed Treacy has spoken to executives from CHEP USA and PECO Pallets and they both have reported their companies are facing challenges in supplying pallets to their customers.
Here is the situation:
- There is a lumber shortage in the US due to COVID shutting down the limber mills for weeks.
- The surge in new house and renovation construction is consuming most of the wood available from the mills.
- The price for lumber is at an all-time high.
- Distributors, wholesale and retail inventories are very high for nonperishable product to protect them from further supply chain disruption. That product is on pallets in their warehouses and distribution centers.
- There is a shortage of all pallets, not just CHEP and PECO. White pallets (lower quality and not always rack-able) are not available as well.
- Both CHEP and PECO Pallets reported that they are doing everything in their power to deal with this crisis.
All PMA members should plan on this situation not being resolved in the near term. Secure any pallet you can and inform your customers that they may receive their shipment on a non-preferred pallet until this situation is resolved.”
Meanwhile, the National Watermelon Association (WMA)has also cautioned its members. “All indications are that the wood (lumber) situation will continue (most likely) through this entire year, and potentially beyond,” it stated. “That is a frightening indication, no doubt. There are numerous reasons why, and most of them are out of our hands to resolve. The major cause of the void is lumber prices that are being paid by home builders and construction. Lumber futures have skyrocketed to prices that are 6-10 times higher than the norm of the 2015-2019 era.
“Let’s be frank about this: this situation is, in fact, a crisis. The magnitude of the issue is potentially different from region to region, but it is coming to your area if it has not already, so please get ready ….. This is not an issue to be unprepared for.
“Across the years we’ve seen you surf through labor issues, audits, raids, food safety outbreaks, cost variations, increased competition, trade pressures, trucking issues, and so many more ….. and every time you were resilient and got through it. But this issue …. this crisis …. is something that is not easily solvable. We don’t own a timber forest or a sawmill to manufacture pallets for you, nor can we go backward to the days of trailers lined with beds of hay for direct-store delivery, or the age of railcars. The fact is we need pallets with bins filled with fresh watermelons on trucks to get watermelons to market – – there are no if’s, and’s or but’s about it.”
The WMA encouraged the cooperation of retailers in releasing empty pallets as soon as possible back to pallet providers to facilitate reuse, and also to accommodate their inbound pallet requirements during the current situation.
“Retailers and wholesalers can help to diminish the severity of this issue by releasing pallets back into the pooling systems as soon as they are emptied (rather than holding them or sending them internally to packaged goods suppliers),” the WMA commented. “Perishable products like F&V crops should take precedence – – crops cannot wait! And, the retailers that have specific pallet requirements can be lenient by providing ‘waivers’ during this crisis. In fact, one of my counterparts has arranged for the CEOs of both United Fresh and PMA to contact one major club store operator to apprise them of this issue and suggest a waiver of their pallet requirement at least until November 1st. We’ll see what happens soon.”
During normal conditions, pallets are easy to take for granted, but we are currently in uncharted territory as pallet users are increasingly forced to explore alternative solutions. Going forward, we will be looking at some options for moving forward – including communication with supply chain partners, as mentioned above. Do you have an innovative solution you can share?