Pallets Across the Pond
Markets in Transition
By Rick LeBlanc
Date Posted: 11/8/2004
Last summer I was warmly welcomed into a few pallet operations in
First of all, I’m not a big fan of doctors. Fortunately, the initial fear that overwhelmed me when the manager of a large plant insisted that I go in to meet the company M.D. subsided when I discovered it had nothing to do with getting probed in the Southern Hemisphere by the company medical doctor. I found out I was really going in to see the company’s big cheese, its managing director.
And when the managing director of a smaller
Then there is the clothing thing. I normally feel underdressed in
One last thing. When they get a twinkle in their eye and ever so fondly refer to their Lauries, it is not about women at all. That’s just what they call their trucks - lorries, to be precise. Having barely survived driving in two-way traffic on the curbless, single lane roads of
Seriously, aside from the predominance of block pallets, there are a lot of similarities between
One interesting thing that the British have done this year is to send out press releases to alert customers about the urgent need to raise prices in order to ensure pallet availability.
According to Chris Donnelly, managing director of Ferguson Packaging, customers tend to treat recycled pallets the way they treat tea bags -- as a totally generic commodity. Whatever brand they find in the company kitchen, they use. In such an environment, where the customer perceives no difference between one supplier’s product and the next, it is hard to raise prices. And due to the reluctance of customers to sign contracts, he considers investing in automation is too risky. In spite of pallet price cuts by larger companies, however, Chris reported that he is winning back some accounts based on superior service.
In addition to rising prices for lumber and nails, ISPM 15 is a hot button issue there as it is here, and there are some concerns about adequate dry kiln capacity as implementation dates grow closer.
Gordon, who is a frequent representative at international meetings on behalf of the Canadian association, is a keen observer of international trends. He has had numerous dealings with the British over the years. He recently returned from the FEFPEB meeting in
CHEP pretty much dominates the pallet market in the British grocery industry, Gordon noted. Generally, business is good for British pallet companies, but margin pressures are forcing them to raise prices. When that happens, they lose some customers and gain others. There are some very good high-volume accounts in the British pallet market, Gordon noted.
My overall impression from the people I met is that British companies are facing many of the same challenges that we see in
That augers well for the future of the pallet industry internationally as pallet companies continue to educate customers on the need for price increases to ensure supply.
And as my mother often used to say to me, at least before she gave up, it is better to be overdressed than underdressed.
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