- The shortage of wooden pallets in Australia threatens to disrupt the supply chain at a time when Christmas and New Year are approaching.
- Major supermarkets are working together to overcome the pallet shortage crisis under the direction of The Australian Food and Grocery Council (AFGC).
Shortage of pallets in Australia
The CEO of Coles, one of Australia’s leading supermarket groups, has warned of further supply chain challenges: “The shortage of wooden pallets threatens to reduce inventory levels in the distribution system at a time when Christmas and New Year are approaching”.
Pallets are on the list of products in short supply due to disruptions in the supply of raw materials. Without pallets, manufacturers can’t get goods into warehouses, leading to production shutdowns and less merchandise for sale.
Brambles Ltd, one of the world’s largest pallet suppliers, says labor and transportation restrictions and limited access to production sites due to COVID-19, have hampered pallet turnover from some manufacturers and retailers return to locations for pickup, similar to a global disruption of container rotation.
Corona brewer Constellation Brands said the increase in raw material costs in the third quarter of 2021 was mainly due to a lack of pallets, cartons and aluminum.
Efforts to overcome the shortage of pallets
Woolworths Group Ltd and Coles Group Ltd, two of Australia’s leading food groups, are participating in a project to overcome the shortage of wooden pallets. The Australian Food and Grocery Council (AFGC), is running this project to address the shortage of pallets for the peak season soon.
A Woolworths spokesman said the company is working with suppliers to help them access pallets and minimize any impact in the distribution network at a time of high demand like today.
Although major distributors said that they would do their best to avoid empty shelves during the year-end holiday season, without coordination measures among actors in the supply chain, all will not be able to cope with the unusual factors caused by the COVID-19 pandemic.
Pallets shortage crisis causes and its impact on supply chain