Tuesday, July 28, 2020

The Humble Wooden Pallet Could Prove a Major Brexit Stumbling Block for Logistics Firms

Leaving the EU Means a Serious Change in Phytosanitary Packing Regulations
Shipping News Feature

UK – EUROPE – One of the perennial trip wires stretched across the path of international shipping is the presence of the ISPM15 regulation. This is the International Standard for Phytosanitary Measures that requires all wooden pallets to have been treated to completely eliminate pests, and bear the relevant industry mark to evidence the fact.

Many are the freight forwarders and shippers which, having despatched goods to any of the long list of countries which have agreed to participate in the standard, have received the dreaded news that the goods are unacceptable due to improper packaging. At the very least this will produce costs to repack the goods and destroy the pallet or pallets, or to treat the pallets with a suitable fumigator.

In the worst cases however all too often the goods are simply returned to the sender along with the bill for repatriation and, following the latest communication from the UK Timber Packaging and Pallet Confederation (TIMCON), British exporters are likely to find they need to take steps before the country leaves the EU to ensure the supply chain remains undisturbed.

The comment came from a letter to the Department for Environment, Food and Rural Affairs (DEFRA) last month in which the head of the UK’s Timber Packaging and Pallet Confederation apparently stated that Britain will not have enough wooden pallets that comply with ISPM15 heat treatment regulations, which come into effect on 1st January 2021 for all goods moving between the UK and the EU.

Technically of course this should be a nonsense, the regulation applies to all wooden packaging in the category that emanates from outside the EU. The day that Britain leaves the bloc means that, at a stroke, all the uncertified wooden pallets which are in the country are subject to the phytosanitary regulation, even the ones which originally arrived from the EU, as so many of the europallets currently in use in Britain did.

The latest comments from the TIMCON boss do not however tally well with those he made a year ago this month, in response to a Yahoo news article on the impact of Brexit on the UK food and drinks industry, in which he stated that the story was ‘scaremongering’ and changes to the regulations after Brexit were ‘highly unlikely’.

If the latest comments made by John Dye, the TIMCON president are correct in that DEFRA letter, the situation could be serious for anyone trying to export post Brexit on non ISPM15 certified pallets. However it is an ill wind that blows nobody any good and the statement that the UK will run out of suitable wooden pallets, made by the head of the lobby group for the industry immediately attracted attention.

The managing director of Goplasticpallets.com (the clue is in the name) Jim Hardisty lays claim to being the country’s largest supplier of plastic pallets and palletboxes with a stock of over 135 types available for next day delivery in the UK, and he was quick to offer to plug the gap, saying:

“If your business exports to the EU, switching now from wooden pallets to a reliable alternative, like plastic pallets, that are completely exempt from ISPM15 regulations, could prevent untold disruption to your supply chain. Meeting demand is not an issue for us. As the UK’s leading plastic pallet supplier with sole distributor agreements with Europe’s major manufacturers, we hold the largest stock, plus 96% of our plastic pallets are made from recycled plastic.

“Other alternatives to wooden pallets exist, but none as durable, hygienic and reliable as the plastic pallet. With the impact of Covid-19, it’s not surprising that TIMCON’s heat treatment efforts have been hampered but now is the time for UK exporters to act to avoid falling victim to supply issues.”

Pallet transfer issues have always been a tricky area, whether delivering domestically, or internationally, pallet swapping has always helped ensure that a company retains its optimum level of the ubiquitous wooden constructions thus avoiding the need to charge the consignee for their loss. Plastic pallets work best in a ‘closed loop’ system, not always possible when a variety of one way destinations are involved and meaning a charge for the one off use and loss of the pallet.

Whilst most exporters will give the matter hardly a thought it will be when goods are refused, charges mount up and pallet stocks dwindle that just how serious this could be for some logistics companies and suppliers comes home to roost.