Pallet Timber in Short Supply22/10/2013 The timber industry is facing an increase in demand from a variety of sources including pallet manufacturers

The nature of the timber market is one where an increase in demand is difficult to meet with an immediate increase in supply. As the economy improves the demand for timber has grown and there is now a timber shortage which is putting upward pressure on prices. The need for more timber is coming from a variety of sectors such as house building, fencing and pallet manufacture.

For instance the rate at which house-builders are increasing their output is now higher than at any time since November 2003 – here's some information on the Construction Index, and this heavy demand for construction materials has led to extended lead times for home grown timber. Indeed there is added demand from the building industry due to a shortage of bricks which is causing builders to turn to timber framed buildings as a building method.

UK pallet manufacturers have therefore turned their attention to the Baltics as an alternative source of timber, but this is not proving to be an easy fix. One long-standing timber agent operating out of the Baltics commented “I have to say supply is as difficult as I have ever known it. It seems like the whole of the UK pallet trade is heading back to the Baltic and it just cannot cope”, while another agent stated “There is no quick fix to supply from the Baltics, because there are a lot less mills about than a few years ago. Also as the UK market slowed, mills were forced to look elsewhere and have developed markets in Europe. Importers are competing for supply from mills in the Baltics, which is creating spiralling price increases”.

As an illustration that the UK is not alone in suffering a shortage of timber, the situation is no better in Ireland, where mills are competing for an ever-decreasing log supply. Irish sawmills export over 70% of their production to the UK, and Irish timber accounts for 7% of total UK timber imports. However, one major sawmill has advised, that they have a requirement for around 40,000 tonnes of timber, but are currently 10,000 tonnes short of this target – this seems to be a recurring theme throughout the country. This again will lead to increased prices being paid for logs with prices of sawn timber rising accordingly.

The future for the pallet industry

The outlook for the pallet industry going forward suggests that these difficult market conditions will remain with us for quite a while with strong demand from world markets – for example, in China demand is expected to rise 50% by 2015. Add to this the effect of Biomass – where Government subsidies encourage power companies to burn wood, thus further distorting the market for timber - see this article on Channel4 news.

So the problem for pallet users is what can be done to reduce the effect of the timber shortage. One thing that can be done is to take good care of the pallets in use and prolong their life by protecting them by using a covered canopy structure, or similar to keep out the elements. Pallets don’t have to be new of course, second hand or recycled pallets can be just as good and provide excellent service. There are also alternative materials other than wood that pallets can be made from such as plastic or cardboard and using pallet collars can expand the storage space of a single pallet.

As a leading pallet provider Whirlowdale can advise on the pallet alternatives that might be considered. Call their experienced sales team for the best advice and the most competitive prices

 

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