Wood Price Rises - Is it worth switching to plastic pallets?
The prices of wooden pallets such as the euro pallet are up to three times higher compared to 2020. Until recently, a euro pallet on Rotomshop.co.uk cost 10 to 15 pounds on a structural basis. Nowadays it can go up to more than 30 pounds each with some providers. In addition, the availability is not always optimal. Knowledge is key in a turbulent market. We are therefore happy to inform you about the trends, expectations and alternatives of wooden pallets and Euro pallets.
Pallet prices and specifically Euro pallet prices have a major impact on all industries as they are necessary for the logistics of almost every company, this applies to the transportation of food, pharmaceuticals and retail goods. The higher the pallet prices, the higher the surcharge on the total transport price. Current price increases affect the prices of all goods, the costs of which are ultimately borne by the customer. This customer will look for potential alternatives and so logically ends up with plastic pallets.
What are the market trends of Euro pallets and other wooden pallets?
Wooden pallets have risen in price in particular due to the enormous demand for wood in the US and China. Unfortunately, this also applies to the range of wooden pallets on Rotomshop.co.uk. In the US, a national building program has started and the houses there are mostly built of wood. As a developing country, China in turn has an increasing demand for wood as a construction material. The rising demand in these two dominant markets causes more and more timber containers to be shipped to these countries, which automatically drives up prices.
The construction of the pallet includes another element whose price has increased, namely the metal of the nails. These prices have also increased by almost 100% due to increased steel prices. As of October 2021, the increase in pallet prices appears to be stabilising. Nevertheless, it is not expected that a (rapid) fall in prices is in the offing. The relatively high price of euro pallets and other wooden pallets will therefore continue for a while.
What are the prices of wooden pallets versus plastic pallets?
Plastic pallets have been an excellent alternative to wooden pallets for many years. At Rotomshop we offer a very diverse range of plastic pallets. Due to hygiene regulations, some companies and industries even use standard plastic pallets, such as the H1 Hygiene pallets. The so-called virgin HDPE plastic from which these pallets are made is easy to clean. In some chains of the food industry and pharmaceutical sector, it is even mandatory to use such plastic pallets. However, most logistics managers usually opted for wooden pallets from a cost perspective.
It is distressing to note that plastic pallets have also risen in price by 20% to 30%. This is partly due to increased demand due to the shortage in the timber market, and partly because raw material prices have also risen. On the other hand, wooden pallets have risen in price by 200% to even 300% and that the supply of plastic pallets has increased in recent years in both numbers and diversity. There is therefore always a suitable answer for your application when it comes to plastic pallets.
Does this mean that wooden pallets cost the same as plastic pallets?
The simple answer is no, not necessarily. However, the underlying reason is quite complex because the price is related to the application and therefore to the choice of the right plastic pallet or wooden pallet. This means that for the export sector, for example, a different choice can be made than for heavy industry. We would like to explain this with a practical example:
A relatively light, nestable plastic pallet with dimensions 1200x800x150 mm will cost you around £7.50 (excl. VAT). Far below the price of the euro pallet, even when the euro pallet was still at the old price level. But, do you want a very sturdy pallet of the same size, made for heavier applications and with an extra-long life? Then the price is quickly above 40 pounds, more than the euro pallet or other sturdy wooden pallets. The question is whether the advantages of plastic pallets compared to wooden pallets also apply to you and whether the switch is worth it. It completely depends on your transport and storage needs.
The fact is that the prices of plastic pallets are closer to the price of wooden pallets and Euro pallets than ever. Based on this, it may be wise to evaluate your preferred means of transport. We are happy to help you make the wisest choice for your situation. This way we can apply our expertise and you get the most out of your logistics process. Together we make the best of current market conditions.
Questions about this blog regarding wood prices, wooden pallets and plastic pallets? Or do you have questions about other load carriers from Rotomshop.co.uk? If so, contact us via [email protected] or 01777 322100.