Picture: 123RF/ANEK SUWANNAPHOOM
Picture: 123RF/ANEK SUWANNAPHOOM

London — They have played an unglamorous but essential role in business for almost a century. Now a shortage of wooden pallets is threatening to derail Britain’s cross-border trade with the EU after Brexit.

From January, wooden pallets moving goods between the UK and EU will need to comply with ISPM-15, an international rule that requires them to be baked to 56ºC for at least 30 minutes to prevent the spread of pests and diseases.

In a letter to the British department for environment, food and rural affairs last month, the head of the UK’s Timber Packaging and Pallet Confederation warned that Britain would not have enough that comply with the rule — and the coronavirus has hampered efforts to plug the shortfall.

“It is even more unlikely that the January 1, 2021, compliance date will be met,” John Dye, the lobby group’s president, wrote in the June 7 letter. “There has been a lot of progress made by our pragmatic industry, but there is still a lot more to come along.”

The shortage adds to a growing list of obstacles that businesses engaged in cross-border trade will face after Britain’s final parting with the EU at year-end. Firms are already grappling with how to produce customs declarations for the first time in three decades, while they also face the prospect of their truck movements being policed by an as yet untested government IT system.

According to Dye, as many as 100-million pallets move between the UK and EU each year. So far, they have not needed to comply with ISPM-15 because movements between EU member states are exempt, something that will come to an end when the post-Brexit transition period ends on December 31.

Pallet makers in the UK and EU have been trying to ramp up production, but their efforts have been hit by the pandemic, Dye said. Installations of new kilns to heat-treat pallets were badly delayed by the virus, he said.

“It has slowed things up,” Dye said by telephone. “We were disappointed the government didn’t ask for an extension to cover the six months we lost,” he said, referring to the UK’s decision not to extend the transition period.

Asked whether the UK government believes it will have an adequate supply of ISPM-15 compliant pallets ready for January 1, the department for environment, food and rural affairs did not give a direct answer.

“Treatment capacity for wooden pallets has increased,” the department said in a statement. “We are working closely with industry to help ensure a sufficient stock of compliant pallets in time for January.”

The ISPM-15 requirement will apply to goods moving in both directions. In a 206-page document outlining its plans for the border after Brexit released last week, the British government said imports may be subject to checks for compliance with the standard.

Dye, who is also the technical & industry affairs director at Scott Pallets, said he hopes the EU will not enforce the rule strictly because the bloc, too, has a shortage of compliant pallets. But he still tells customers that they cannot be certain the EU will go easy on the UK.

“They might be stopped,” he said of the pallets. “It’s frustrating when politicians are playing with people’s businesses.”

Bloomberg

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