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The consequences of the sanctions against Russia are becoming increasingly noticeable. The German Association for Wooden Packaging, Pallets and Export Packaging is now warning of disruptions and even a standstill in German pallet production. This could have consequences for all supply chains.
Pallet manufacturers are facing an acute shortage of nails. Some companies are already barely able to meet their demand for pallets and packaging materials. As a result, production at some German pallet manufacturers could come to a standstill in just a few weeksaccording to the Federal Association for Wooden Packaging, Pallets, Export Packaging (HPE). This means that supply chains in Germany are facing a massive disruption.
Pallets are essentially made from sawn timber, pallet blocks and nails. 78 nails are needed for one Euro pallet. According to European suppliers to the HPE industry, around 90 per cent of the loose nails required for pallets are made from Russian steel. As a result of the trade sanctions against Russia, no supplies can be ordered there for the time being - the industry association is of course endeavouring to find solutions at all levels.
"Serious effects"
The pallets manufactured in Germany are produced almost exclusively on (highly) automated production lines. The nails used require steel grades that were previously available almost exclusively from Russia and which, according to the association, cannot be ordered from elsewhere so quickly - especially as there is little to no capacity available for short-term overseas deliveries from the Far East, for example.
"If there is a shortage of nails, the affected companies are threatened with 100 per cent short-time working from one day to the next. The greater the resulting shortfall, the more serious the impact on the movement of goods."
Marcus Kirschner
Managing Director, HPE
In addition to the shortfall in pallets from German production, pallet imports from Russia, Belarus and Ukraine will also be cancelled for the time being. A good 10 million pallets were imported from there in 2021. That was 14.5 per cent of the total volume of German pallet imports. In addition, 9.55 million pallets were imported from Poland and the Baltic states in the previous year, whose manufacturers are heavily dependent on Russian timber imports.
German manufacturers of pallets, crates and cable drums are also already experiencing shortages in various timber products due to a lack of imports from Ukraine, Russia and Belarus. Last year, up to 25 per cent of German imports came from these countries, depending on the timber product range - for example, plywood, which is important for the HPE industry.
Source: HPE
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