Pallet shortage causes supply chain disruption - Remedial action and relief in 2023

Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) have received extensive feedback from members raising concerns about the lack of available timber pallets, outlining the adverse effects and increased costs on import, export and domestic supply chain operations.

The cause appears to be largely attributed to importers, still scarred from the supply chain delays from over the last few years, moving away from a 'just-in-time' supply chain to a more conservative 'just-in-case' model with increasing stocks being held onshore.

This has seen much of Australia's warehousing reach capacity with stock sitting on the high demand pallets.

Major suppliers Chep Australia and Loscam have released notices acknowledging that whilst they have significantly increased their pallet pools, they are struggling to meet demand.

Both have outlined their intent to further increase the supply into 2023 (including the use of new international timber suppliers), strategies to engage with major customers on improving de-hire processes and are ensuring they are fully resourced to inspect, condition and promptly re-issue returned pallets.

In line with above, Sky News has reported major retailer Woolworths have been balancing a high volume request for pallets from suppliers to return pallets to them directly while also contributing hundreds of thousands of pallets back into the pool for maintenance and wider availability across the industry every month.

Deployment of the above initiatives and a projected slowing of international trade are anticipated to provide an increase in pallet availability in the first quarter of 2023.

In the interim, many members have reported strategies to adapt utilising alternative products and suppliers (a surge in demand reported by FTA sponsor Ubeeco – refer HERE) and transport operators using line-haul B-Doubles to relocate pallets interstate to peak demand locations.

Importantly, as a part of the FTA / APSA approach to bring awareness of supply chain matters to the broader public, we are again grateful to the executive team at Sky News for providing valuable air- time on this important matter.

Pallet shortage causes supply chain chaos (9 December 2022)
Lack of wooden pallets could lead to shortage of fresh produce (11 December 2022)

Paul Zalai - Director FTA | Secretariat APSA | Director GSF