In Europe, the wood prices have doubled recently. During the lockdowns more people started DIY renovations and retailers moved their sales to e-commerce. Online sales increased substantially with more need for pallets, to deliver all these goods.

Thus the need for wood increased. This would normally not be a problem, since there are plenty of renewable and sustainable forests in Europe. The major issue is the lack of lumber production capacity. Limited personnel and production delays caused a squeeze in the market. Additionally, a jump in US import tariffs for wood from Canada, imposed by US president Trump added to further US demand for European wood. Moreover, logistics companies are holding on to the pallets they have, exacerbating the situation.

The need for wood remains high, continuing the shortage and price increases, likely to last until the end of 2021. A solution needs to be found. Consumers are depending on containers, trucks and pallets for their deliveries. The question will be how their demand can be met and at what cost to keep the supply chain moving.

There are industry calls and suggestions for active re-use of existing pallets, use of recycled wood material, plastic or cardboard as raw materials.

We know what you're up against. Want to talk about sourcing and production in these difficult times? Get in touch. 

(reference: article in Warehouse Totaal - Netherlands)