Kitagawa Europe’s Andrew Kennedy assesses the pallet options for UK exporters in a no-deal scenario

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Andrew Kennedy, logistics manager, Kitagawa Europe

Andrew Kennedy, logistics manager of engineering group Kitagawa Europe looks at the options for UK exporters whose pallets must comply with EU standards for third countries in the event of no-deal Brexit

This article is the view of the author and not necessarily of Ready for Brexit

There has been much concern over the recent announcement from the Department for Environment, Food and Rural Affairs (DEFRA) and the UK Government regarding the possible requirement of treated wooden pallets and packaging materials for all UK export shipments to the EU in the event of a no-deal Brexit. In a no-deal scenario, the UK would be classed as a ‘third country’ and, therefore, will need to comply with international standards just as any other third country would when exporting to Europe. While the majority of Brexit headlines have focused on the possibility of trade tariffs and potential shipping delays, the practical topic of the physical packaging has been largely ignored – until now.

So how can this affect your business?

If you use any solid wooden packing materials such as: pallets, crates, wedges and braces, a no-deal Brexit will affect the way you ship your goods.

At the moment, under current EU legislation, there is no restriction on the packing materials used within the Single Market. In a no-deal Brexit scenario, UK exporters will need to comply with the international standard for phytosanitary measures, number 15 or ISPM-15. It is still not clear if the EU would enforce these standards immediately or take a phased approach to reduce any potential strain and delays on the UK part of the supply chain.

ISPM-15 standard

The ISPM-15 standards and procedures were developed by the International Plant Protection Convention (IPPC) and show that the material has been treated against any potential wood-borne pests, such as beetles, termites and larvae. If the EU were to enforce the standards immediately under a no-deal scenario it would mean all wooden pallets and wooden packaging leaving the UK to Europe would need to be:

  • Debarked, displayed as ‘DB’
  • Heat-treated or fumigated, displayed as ‘HT’ and ‘MB’
  • Officially stamped with the ISPM-15 stamp of compliance

Once treated the material is stamped with the official ISPM-15 stamp. This essentially acts as a guarantee for the material allowing it to be transported across international borders confirming it has been treated.

The stamp must consist of at least three codes to be valid:

  • Country code
  • Treatment centre registration number
  • Type of treatment carried out

The treatment can only be carried out at a certified and registered treatment centre.  The format of the stamp is shown below:

Non-compliance

Failure to meet this packing requirement could lead to shipping delays. Shipping companies could refuse to move the shipment, as it would not be allowed into Europe. This could lead to unexpected storage costs or repacking costs for UK companies. In the worst case, the shipment could be returned to the shipper for repacking, which will lead to additional transport costs and further delays.

ISPM-15 exempt shipping materials

The main point of concern in the UK regarding treated pallets is that there may not be enough in the UK at the moment for the current volume of exports to Europe. It is difficult to calculate the exact amount currently in circulation in the UK, but there are other options as there are exemptions from the ISPM-15 standards.

UK companies have the option of using pallets and packing materials that are made entirely out of manufactured/engineered wood created using glue, heat or pressure such as:

  • Plywood or glue laminated material (glulam)
  • Chipboard or MFC (melamine face chipboard)
  • Fibreboards such as MDF (medium density fibreboard)

These materials are not covered by ISPM-15 standards and do not require treatment or any kind of treatment stamp. This will give you the option of pressed board pallets and plywood or fibreboard pallets. You also have the option of corrugated cardboard pallets or other materials such as plastic, resin or metal. At Kitagawa Europe we ship large volumes of palletised goods all across Europe and the rest of the world. We mostly use engineered plywood pallets and re-useable metal containers. The percentage of treated pallets we use for international shipping is only approximately 15%.

So what steps do you need to take?

The first and foremost step is to review your current pallets and packing materials – check the material type and check for any ISPM-15 stamps. Pallets are one of the most re-used packing materials in the world. If you have pallets that show they were treated in a different country they will be accepted, so long as they are in good condition with no missing blocks or broken slats.

If you use a pallet exchange system, such as the well-known EPAL ‘euro pallet’, you will notice these are treated and stamped on the centre block. EPAL pallets are treated as standard and have been since January 2010. These are ideal for international shipping and there are around 450-500 million currently in circulation. If you use a pallet rental company, such as CHEP, you will need to inform them of your change of requirements. This should not be an issue as all pallet rental companies will be aware of ISPM-15 regulations for international shipping.

For many UK companies that have only ever traded within the UK and Europe, this will be the first time that they have needed to review their packing materials. Be sure to add this additional check now to your Brexit checklist and make sure that your stores and warehouse personnel are aware of the regulations to get your company prepared.

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