Shortage of shipping pallets could be the next big supply chain issue

Ed Crump Image
Friday, May 28, 2021
Shortage of shipping pallets could disrupt supply chain
Brace yourselves, the latest shortage doesn't just affect one type of product, it affects many of them.

RALEIGH, N.C. (WTVD) -- After nearly 15 months of living through a pandemic, we're getting use to the fact that sometimes there are shortages in the supply chain.

Probably the most notorious was the toilet paper shortage early in the pandemic. But brace yourselves, the latest shortage doesn't just affect one type of product, it affects many of them.

There's now a shortage of wooden shipping pallets--the wooden platforms products are stacked on for shipping.

A large percentage of the things in your home are shipped on pallets; things spanning from electronics to food.

"The pallet, surprisingly, is the secret lifeblood of logistics and distribution," Tim Kraft told ABC11.

Kraft is a supply chain expert and professor at North Carolina State University. He knows the crucial role pallets play in shipping.

"Any industry that ships a product, a component, raw material, they need pallets. And so this could touch a lot of different industries."

That includes the giant big box and grocery stores all the way down to businesses like mom and pop hardware stores.

"A lot of these, they'll use reclaimed wood to make some of the pallets," said Jeff Hastings the owner of Burke Brothers Hardware in West Raleigh, where the vast majority of products arrive on pallets.

"Now it seems like the pallets are sort of that next domino to fall in the supply chain," Hastings said adding, "So not only are some materials short but now with the pallet shortage being what it is, there's one more thing that makes it difficult to get product from point A to point B."

The pallet showed up on the shipping scene about 100 years ago and attempts to replace it have mostly proven unsuccessful.

Its simple design allows products to be stacked on top and allows a forklift to slide right into the wooden frame and lift it.

But now, with a shortage of lumber, the lowly and once cheap pallet has become expensive and hard to find.

Hastings said some companies are stamping their name and the cost on each pallet.

He noted that it's not just the cost of the pallets but also the cost of delays from the lack of pallets that will end up trickling down from the manufacturers.

"We suffer for it. The consumer ends up suffering for it," Hastings said.

So once again a pandemic shortage could hit your wallet hard.

This time it may be extra hard because the lack of pallets will effect so many different consumer products especially the products we need most.

"This increased cost of packaging and transportation gets passed on to the consumer, particularly in industries like grocery for example that rely heavily on pallets and have tight margins to begin with," Kraft said. "There is the threat that consumers will start to see this cost."