The last couple of years have been quite turbulent for the logistics industry, with Brexit, the pandemic and subsequent cost-of-living crisis all playing their part. In this post we’re focusing on the implications of this. How has the cost-of-living crisis affected shipping logistics and the demand for pallets? And are there any positives stemming from the current situation? Let’s discuss!
What are the cost-of-living implications for the logistics industry?
The cost-of-living crisis isn’t just affecting individuals and families; it’s also having a profound effect on businesses – particularly those in the logistics industry. Rising fuel and electricity prices, along with increased warehouse and transportation costs, are all contributing to increased shipping and operational costs. This can have a detrimental impact on businesses that cannot pass these costs on to their customers.
In addition to these increased costs, we’re seeing a decrease in consumer spending, which is no surprise; we’re all tightening our belts and cutting back on things we deem to be ‘non-essential’ as we grapple with the current living crisis. This, however, has a knock-on consequence for businesses that ship consumer goods and services who may now find that they have to run their shipping containers at lower capacity.
The current economic climate is also having a significant impact on the supply and demand of wooden pallets. The price of wooden pallets has rocketed – increasing by 30% in Europe just in the last year, making them costly necessities for the logistics industry. Why has the price increased so dramatically? Well, there are a few factors at play.
The pandemic caused major disruption to the global supply chain of wooden pallets, meaning both production and transportation has been a challenge over the last few years. The pandemic also forced more and more businesses to move online, shipping more products out to customers. This increase in demand together with a reduced supply is continuing to push the price of wooden pallets. Combine these factors with the rising timber prices and it’s easy to see why pricing has risen so rapidly.
Together these factors are all contributing to the increased costs that so many businesses are facing. In addition to the increased cost, these factors are making it more difficult for businesses to get hold of the amount of pallets that they require in order to run their business efficiently and at full capacity.
What can be done to help the logistics industry keep costs down?
Taking the time to complete a thorough review of all of your operational costs could help you identify key areas where you could save your business money. In addition, we recommend that you reuse your pallets as much as possible (as long as it’s safe to do so!) and please don’t simply discard any damaged pallets – you may find it’s actually cheaper to get them repaired than it is to buy new ones!
Here at Universal Pallets, we offer a tailored pallet collection service where we’ll repair or recycle your unwanted pallets to suit your specific circumstances and requirements. Find out more about this service via our website or download our pallet collection brochure.
If you do need to purchase more pallet stock, you can help to keep costs down by sourcing refurbished or repaired pallets. Take a look at our online shop where you can quickly and conveniently find the perfect pallet – whether it’s new or reconditioned – for your business’s needs.
Has the cost-of-living crisis brought any benefits to the industry?
Aside from potential job opportunities for any areas in high demand, there aren’t many advantages that the cost-of-living crisis has granted the logistics industry (sorry to be the bearer of bad news!), but we’d love to hear your thoughts on this. Has your business been affected by the challenges listed above and how have you managed to adapt? Have you found any unexpected positives to come from the current situation? Get in touch and let us know!