May 20, 2021 By Canadian Produce Marketing Association (edited)
There is an acute pallet shortage affecting the fresh produce industry.
According to the Canadian Produce Marketing Association (CPMA), a multitude of issues are impacting pallet availability, including the availability of lumber to repair and build new pallets; the escalating price of lumber; lack of available trucks to relocate pallets, and diverted resources towards ensuring inventory of certain non-perishables related to the pandemic.
Based on data gathered by the CPMA, the shortage of lumber and wood products has increased the cost of raw lumber by 200 to 350 per cent, affecting the cost of pallets.
In one example, it was noted that over the past few weeks, pallet costs had increased by more than 400 per cent, but often the pallets were not even available. One farmer was told by one pallet supplier that they are not taking any new customers due to an inability to fill existing demand. Companies are forced to bring pallets from other jurisdictions, incurring border and transportation costs. Due to delayed and cancelled orders from pallet services, pallets are being held in-house, leading to higher storage charges and increased congestion within operations.
At this time, expectations are that the pallet shortage will continue for months, perhaps for the rest of 2021 – all at a time when many North American produce items are just beginning seasonal harvests and shipments.
Working together, the supply chain must balance organizational goals relative to overall availability of goods with availability of food, states the CPMA.
“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 ultimately consumer, demand for produce,” says the CPMA.
Simultaneously, growers and shippers are working hard to remain compliant with pallet requirement specifications where they 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,” states the press release.
This adds to existing challenges within the supply chain, including a lack of available trucks and shipping containers, ongoing labour challenges, fluctuating fuel costs, pandemic-related challenges and a pending shortage of resin used to make reusable containers and pallets.
“All partners in the supply chain should have regular conversations with their pallet suppliers to understand the situation and pallet inventories/availability,” states the CPMA. “We welcome the opportunity to work collaboratively with all parties within the supply chain to mitigate the impacts of the current shortages and will reach out to stakeholders to identify a path forward that provides solutions to this increasingly disruptive threat and enables the continued flow of goods.”
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