You’ve probably heard that the cost of lumber has remained spiked throughout the COVID-19 pandemic, driven by a very strong home construction market and historic demand from homeowners and do-it-yourselfers doing a lot more lumber-involved projects over the past year.
But while end-users are paying much more for lumber used in remodeling and gardening, one food manufacturing association is sounding the alarm on the impacts that the lumber market is having on supply chain operations.
The United Fresh Produce Association — which connects everyone from growers, processors, distributors, retailers, and more involved in produce supply — issued a letter on May 19th stating that its industry is facing a critical shortage of wooden pallets. Worse yet, the group says many stakeholders in the industry don’t yet realize the scale of the problem.
UNFA says the scarcity of lumber and wood products has launched the cost of raw lumber by 200-350% and is making the cost of wood pallets increase incrementally. The association noted that, in one example, pallet costs have increased more than 400% since the pandemic began, while some in the supply chain are struggling to find available pallets at all.
In another example, the group said a pallet supplier told one of the association’s farmer members that it wasn’t taking any new customers because it couldn’t even fill existing customer demand.
Meanwhile, UNFA says, some companies in the produce supply chain that have pallets are holding them in-house due to delayed and canceled orders from pallet services, leading to higher storage charges and increased congestion. A shortage of resin is also hurting the market’s ability to make reusable containers and pallets.
Because of all this, UNFA says, produce companies are being forced to bring in pallets from other jurisdictions, which incurs border and transportation costs.
The association said that it currently expects the pallet shortage to 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.
The group added that the pallet issue is adding to numerous other major challenges the produce industry is facing, including a lack of available trucks and shipping containers, ongoing labor challenges, fluctuating fuel costs, and pandemic-related safety challenges.
UNFA said it hopes its warning letter to the industry can serve as a catalyst to spread awareness of the issue to all of its stakeholders.
