Pallet shortages threaten fresh produce supply
The United Fresh Produce Association (UFPA) is voicing concerns that pallet shortages, have the potential to affect the availability of produce to consumers. In a May 19 release, UFPA noted numerous issues impacting pallet availability, including:
• Efforts of wholesalers, distributors and retailers to ensure sufficient inventory of non-perishables given previous pandemic-related impacts;
• The availability of lumber to repair and build new pallets;
• The escalating price of lumber when it is available;
• Non-perishable inventory dwell time increase;
• Lack of available trucks to relocate pallets.
The lack of pallets is adding stress to a supply chain already facing significant challenges which include a lack of available trucks and shipping containers, ongoing labor challenges, fluctuating fuel costs, pandemic-related challenges and a pending shortage of resin used to make reusable containers and pallets. The UFPA expects the pallet shortage to continue for months, perhaps for the rest of 2021, at a time when many North American produce items are just beginning seasonal harvests and shipments.
According to the UFPA, the shortage of lumber and wood products has increased the cost of raw lumber 200% to 350%, which is increasing the cost of wood pallets increase incrementally.
For example, over the past few weeks, pallet costs have increased more than 400%, and the pallets often are not available.
One farmer was told by a pallet supplier that it is not taking any new customers due to an inability to fill even existing customer demand.
Companies are forced to bring pallets from other regions, causing extra transportation costs.
Pallets are being held in-house due to delayed and canceled orders from pallet services, leading to higher storage charges and increased congestion within operations.
UFPA urged sections of the produce supply chain to work together and balance organizational goals relative to overall availability of goods with availability of food. Otherwise, “it will be very difficult, if not impossible, for the grower/shipper community to meet buyer, and ultimately consumer, demand for produce,” the organization said.
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, could help until this pallet shortage is resolved.