At a time when supply chain disruptions are at an all time high, a shortage of wooden pallets is adding more splinters to the strain Down Under.
Small and medium businesses could be faced with delays in the delivery of essential consumer goods over Christmas including groceries and food, Sky News and the Australian have reported.
The Freight and Trade Alliance told Sky the shortage, dubbed “pallet gate”, is reaching a peak at the wrong time of year.
Pallet manufacturers are facing increased demand for pallets in the lead up to Christmas.
CHEP, the world’s biggest pallets manufacturer, has issued a stop and return notice for customers not to hoard wooden pallets and return them asap.
Smart Company reported Australian Food and Grocery Council CEO Tanya Barden raised the concerns of food and grocery suppliers about the pallet shortage with the Australian Competition and Consumer Commission (ACCC) Industry Minister Ed Husic.
Barden told Smart Company more pallets needed to be added to the pool, which is dominated by an 80% market share between Woolworths, Coles, Aldi and Metcash.
Industry insiders have claimed that supermarkets are hoarding pallets.
“I think we are really seeing a market failure at the moment and there is a need for an injection of more pallets into the pool, so there is a question as to whether state or federal governments are able to collaborate to firm up some timber supplies or pallet supplies, and that is part of the discussions we are having,” Barden said.
“There is a market here that is not working effectively.”
Some Australian brewers were faced with slashing production by as much as 50 per cent due to the pallet shortage.
Brauwelt.com reported the issue late last month and the shortage is believed to have been driven by a timber shortage and local covid restrictions within the manufacturing sector. This has meant pallets are locked up in factories and not circulating around the economy.