White Exchange Pallets
The White Exchange pallet industry in Poland is highly polarized with limited players in the market. Profit margin is also very low in the industry and industry players are complaining about very tight regulation standards. However, the market is expected to keep growing owing to increasing demand from China and an improving European economy.
Problems with White Exchange
- One of the major problems with regard to White Exchange pallets in Poland is that the Polish pallet market has polarized in the last decade with a limited number of market players.
- Less than half of the white wood pallets made in Poland reach the domestic market and most are exported to Europe.
- The White Exchange pallets industry is a low margin industry but producers are able to compete because supply is low and customers prefer to buy from licensed producers regulated by the European Union EPAL that "conducts verification and certification of production and repairs together with Bureau Veritas.
- Another problem is that individuals can trade pallets that come in possession or of pallets that are written off as sub-standard, leading to a loss of value of over PLN200 million. Industry players are pushing for tighter control and for a more responsible system that would prohibit the trade of pallets by unlicensed individuals.
- A big problem regarding White Exchange pallets in Poland is the cost of doing business, especially the uncertainty and fear of losses associated with doing business in the industry. For instance, companies in the industry face uncertainty on if contractors will return their pallets in good condition or if the pallets will be too badly damaged that they may need to purchase a new set of pallets to meet demand and distribution. This issue can be quite devastating and can easily lead to job losses and even the collapse of some large companies.
- There is also concern that current standards demanded and regulated by EPAL is too high as White Exchange "pallets, despite being a simple logistic carrier, is treated as a super specialized tool whose minor damage or simple repair in accordance with applicable standards may result in its elimination from the market."
- Other challenges facing the pallet industry that has led to an increase in prices include less wood logging due to damp forests in Europe, fewer sawmills focusing on wood pallets, and increased Chinese demand. These factors are expected to contribute to an increased demand for pallet from Poland and Europe in general.
Cost of White Exchange Pallets
- The cost of pallets increased by 13% in 2018. The cost of a pallet in Poland is from 14 PLN (about $3.67) for pallets with dimensions of 100x73x12cm.
Department in Charge of Pallet Budget
- The procurement department is generally in charge of the pallet budget in a company.