Brambles Discusses Lumber Supply and Alternative Materials
CHEP is diversifying its lumber supply, according to Carmelo Alonso-Bernaola, Senior VP, Global Supply Chain for Brambles. He spoke recently Brambles presentation in London. While the company has traditionally sourced lumber in regions where lumber was needed, he said that the practice left them heavily exposed to any market fluctuations within those regions.
“So, the first action we're putting in place if diversifying the supply of our lumber needs in the different regions,” he said. “For example, in the U.S. we are today procuring significant volumes from Latin America. With inflation in the U.S. we are divesting more volumes towards Latin America and importing into the US market.”
In Europe, the company is exploring Russia as a lumber source. Alonso-
Bernaola stressed that the initiative is still in the early stages as no tall lumber coming from Russia is yet certified. Another challenge is sawmilling quality. However, they “partnering with local players there to develop them as a way to create alternatives for the European Market.”
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FEBRUARY 2019
He added that the company is already experiencing some disruptions as customers prepare for Brexit by building inventory. The company has spent $11 million to provide additional pallets. Roughly 10 percent of the company’s European business relate to cross-border flows between the UK and Europe.
Above, a slide from the Brambles presentation. The company was successful in recovering 75 percent of inflation related to transportation and lumber increases through indexation and surcharges.