Pallets are in short supply

Businesses are being warned to brace for rising pallet costs as global demand rises.

Pallet supplier Chep recently reported a 3% increase in global demand for pallets in the last financial period.

The company notes "sustained high levels of pallet demand from existing customers in North America and inventory stockpiling in the US".

In many markets, the US among them, the shortage is exacerbated by limited production capacity to add more pallets to the supply chain.

Brent J. McClendon, president and CEO of the National Wooden Pallet & Container Association Pallets, has been quoted as saying US sawmills are working hard to increase capacity. Many sawmills closed or reduced operations during the earlier days of the pandemic.

Supply Chain Dive cites a warning from the Institute for Supply Management that lumber and wood pallets are increasing in price due to product scarcity.

It also quotes the United Fresh Produce Association which expects wood pallet shortages to continue for months, "perhaps for the balance of 2021".

Bloomberg, meanwhile, confirms that pallet prices have hit record highs in the US and in European markets, including the UK and Germany.

The market may stay hot through the peak construction season and as COVID-19 vaccines help revive restaurants and event venues, adding to inflationary pressures rippling across supply chains, according to the agency.