Pallets and Wooden Packaging Materials are the Actual Basis of the Global Economy

While Corona is no longer at the center of public debates, the global economy is increasingly struggling with the consequences of worldwide lockdowns. The international computer chip shortage illustrates how dependent various industries are on a previously overlooked sub-sector. However, very few are aware of the actual basis of the global economy: pallets and wooden packaging materials. Without them, the supply of the population with the most basic goods would be at risk.

(Bad Honnef) Experts currently predict that the chip industry will experience its weakest sales year since reunification. Production is stalled, prices are rising, and assembly lines are at a standstill. The semiconductor crisis has severe repercussions for the automotive industry and the car market. One could speak of the first signs of an organ failure of the economy.

However, when considering the entire economy, pallets are necessary to keep the entire organism alive. Just as red blood cells supply the body with oxygen, pallets, wooden boxes, and export packaging transport all essential goods around the globe via roads, shipping, and air routes. If the wooden packaging materials fail, the economic organism collapses.

“Pallets, transport boxes, and export packaging are indispensable in global logistics,” explains Marcus Kirschner, Managing Director of the Federal Association of Wooden Packaging Materials, Pallets, Export Packaging (HPE). “Our more than 430 companies ensure smooth national and international goods traffic through their pallets, boxes, and cable drums. Without them, vegetables, milk, baby food, medicines, or vaccines, as well as components for water, electricity, and internet supply, would not find their way.”

Economic Tachometer

In 2020, nearly 110.4 million pallets were produced in Germany. This immense demand is no surprise. A manufactured product almost always needs to be transported. Therefore, the state of the German economy can primarily be gauged by pallet production. Currently, however, the pallet and wooden packaging industry is still grappling with high material prices and supply bottlenecks in addition to the economic consequences of the Corona restrictions.

“Reliable delivery times are of enormous importance for smooth production processes,” emphasizes Kirschner. “The situation in the wood market and the price developments of important assortments are a real stress test for the companies and represent a threatening supply and sales crisis. This immediately impacts liquidity as well as production and delivery capabilities.”

Domestic Wood Supply Essential for the Industry

Since most of the wood used in the industry comes from regional forests, reliable regional supply chains are extremely important. “The global economy is picking up again, and the worldwide demand for wood will increase. It is now crucial to increase public investment activity and create future-oriented economic incentives to permanently concentrate the system-relevant supply chains in Germany,” concludes Kirschner. “In this way, the wooden packaging industry will be able to continue to transport all goods of global demand to supermarkets, factories, and companies, ensuring the basic supply of the population.”

About HPE

The Federal Association of Wooden Packaging Materials, Pallets, Export Packaging (HPE) e.V. celebrated its 150th anniversary in 2019. It is a professional association with more than 430 predominantly owner-managed companies from all areas of the wooden packaging industry, representing about 80% of the industry turnover of around 2.3 billion euros. The members of HPE are providers of pallets, packaging materials, cable drums, crates, and wooden baskets, as well as service providers in the fields of packaging, container loading, and logistics. The estimated wood demand of the industry, including small businesses with fewer than 20 employees, is around six million cubic meters.

Photo: © Hapack/HPE / Image caption: Without pallets and wooden packaging materials, nothing moves in global logistics