NOVEMBER 2022
FEFPEB: Supply Chain Cost Pressures Remain Despite Drop in Raw Material Prices
Supply chains across Europe have been warned that remaining high prices of inputs other than raw materials are expected to keep costs of essential products such as pallets and packaging high for the foreseeable future.
According to some European industry indices, the costs of raw materials used to make packaging – pallet wood and steel (for nails) – fell during quarter 3 of 2022. However, the high cost of energy and fuel are pushing upward rates for logistics and heat treating and kiln drying timber. Meanwhile, other higher-priced inputs, including labor, are now making up a considerably larger proportion of the price of goods such as pallets and packaging than they were previously. This has pushed the actual price of these items up significantly.
According to the European Road Freight Rates Benchmark Report, the cost of diesel usually accounts for one-third of total operating transport costs – but may now account for 50 percent of costs.
“Having reached all-time highs, raw material costs have eased slightly in recent months,” stated Fons Ceelaert, Secretary General of the European
Fons Ceelaert
Federation of Wooden Pallet and Packaging Manufacturers (FEFPEB). “However, national associations across Europe are reporting that ongoing highs in the cost of energy, transport and labour are still impacting heavily on the prices paid by manufacturers and repairers.
“Pallet and packaging businesses across Europe are working closely with their customers to minimize the impact of these continuing pressures. In the meantime, FEFPEB will continue to monitor this situation and keep the market informed about the latest developments.”