The packaging and pallet sector is battling major ongoing pressure as the result of Covid, Brexit and other factors, according to the Timber Packaging and Pallet Confederation (TIMCON).
Delegates at the organisation’s GM, which was held in person in Manchester at the end of October 2021, heard how industry-specific and wider general influences were impacting heavily on the supply and demand of wood and products such as pallets and packaging.
TIMCON President John Dye said while the annual increase in demand related to Christmas has started, there remains a shortage of used pallets in the UK – with recycling and biomass diverting some stocks away from the market – coupled with strong demand for reconditioned pallets in the EU market. Brexit continues to have an impact on the business with additional administrative, time and cost burdens for goods crossing between the UK and the EU.
In general, several interlinked crises in related industries were deepening the issues, he added. These include the ongoing global imbalance of container locations around the world, which has pushed the price of shipping to new highs; the difficulty in logistics, haulage and related industries in recruiting and retaining staff; and continued pressure on supplies due to a post-lockdown rebound in demand for timber in several markets, including China and the US.
Dye said: “While the pallet and packaging industry is fully operational, ongoing challenges for logistics-focused industries in general and our sector specifically, is placing intense pressure on our members. We are continuing to monitor the situation and communicating with other industries and the government to ensure keep the supply chain updated.”
TIMCON recently wrote to MPs including Business Secretary Kwasi Kwarteng, asking for urgent assistance to address staff shortages; and to reinstate both the mothballed Renewable Heat Initiative to allow the industry to invest in kilns and the subsidy for red diesel. The organisation has also engaged fully with the recent Extended Producer Responsibility (EPR) and Packaging Waste Regulations (PWR) consultation processes.
Also at the meeting, TIMCON launched its annual UK Wood Pallets & Packaging Market survey for 2020, which it publishes jointly with the Forestry Commission. The latest study showed a 1.5% growth in reuse of wooden pallets, to a total of 49 million; while, despite the pandemic, production of new pallets remained similar to the previous year, at a total of 44.9m.
“Who would have ever imagined that in a year that saw our supply chains being decimated and the main customer of our products, the construction sector, shutting down for four to five months, the wooden pallet and packaging sector has actually ended up manufacturing the same quantity of pallets as 2019,” said Dye. “After this incredibly difficult time this is a really positive outcome. And we are pleased to see further growth in the recovery, repair and reuse of pallets; this is part of a welcome trend that further still improves our sector’s unrivalled environmental credentials.”
TIMCON gave the meeting an update on projects including the production of a document on safe pallet stacking heights, further engagement with government, and its communications activity.
It also reported on extremely high membership retention (98%) and the addition of seven new members during the past year, which Dye said is evidence of the industry’s desire for strong representation in the face of multiple challenges in the market.