CHEP is diversifying its lumber supply, according to Carmelo Alonso-Bernaola, Senior VP, Global Supply Chain for Brambles. He spoke recently at a 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 is 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.”
CHEP is also exploring opportunities for for sawmilling in the U.S. He noted that the U.S. sawmill industry has been set up to produce standard cuts for the building industry, not for packaging. In Europe, however, he said that most sawmills are producing 100% for packaging materials.
“That means in the U.S. there is quite a lot of rework,” Alonso-Bernaola said. “We are right now starting a couple of pilots with a couple of partners in the US to translate the learnings of what we do in Europe into the U.S. to reduce the rework.”
In addition, the company is looking at how to reduce its pallet lumber requirements through increased durability. Two U.S. pallet initiatives to promote durability have been to use clinched nails, as well as nail plates. They have seen the benefit of the clinched nails, but not yet for the plates, which are being introduced on new pallets only. The penetration rate, now at 20%, is still too low. CHEP also plans to use hardwood in Europe, and is changing the nail patterns with the Australian pallet.
The company is also exploring hybrid composite block materials, such as sawdust and plastics to produce more durable blocks, as well as ones which eliminate the issue of flaking, which can be a customer concern.
Brambles Discusses Lumber Supply and Alternative Materials
16 WESTERN PALLET