A general meeting of the Timber Packaging and Pallet Confederation (TIMCON) saw a record turnout as members and representatives from across the supply chain gathered to share their opinions on the opportunities and challenges facing the sector.
More than 50 delegates attended the meeting in Manchester in March, an indication, said TIMCON president John Dye, of the severity of the timber supply situation the sector finds itself dealing with and its common purpose of finding a way through it.
The meeting featured a packed programme of presentations and a lengthy open forum, which focused on global timber flow and roundwood supply but began with an update on TIMCON’s activities.
Mr Dye reported that TIMCON had been approached by Defra last November and was now being consulted as part of the government’s preparations for leaving the EU.
Negotiations regarding ISPM 15 (the International Standard for Phytosanitary Measures) are crucial because EU countries are currently viewed as a single unit.
Currently, intra-EU movement of pallets doesn’t require ISPM 15 compliance but on Brexit the situation may change.
Discussions are sensitive and confidential, said Mr Dye, but the outcome will be shared as soon as concrete proposals are on the table. And he emphasised that the fact that TIMCON is at the forefront of these discussions is a huge positive.
TIMCON’s voice will also be heard at the Health & Safety Executive, where it has been asked to facilitate a working group to look at pallet machinery standards. A working group convened in April and TIMCON will feedback and seek member’s input in due course.
In the first of the day’s presentations, Willy Bijen, international sales manager at Bes Bollman and KARA provided some insight into how pallets and packaging manufacturers could make the most out of timber and gain competitive advantage by improving energy efficiencies through heat recovery and by capitalising on the Renewable Heat Incentive.
He said that it was possible to save up to 25% on the costs for thermal energy and up to 10% in drying time with heat recovery.
The timber supply issues facing UK pallet and packaging manufacturers are being experienced on a global basis, said John Dye, and this was put into context by Heikki Vidren of Pöyry Consulting who outlined the global softwood trade.
He said that almost 335 million m3 of sawn softwood was shipped around the world in 2016, 15-20% of which was traded between continents. Sawn softwood demand in the main regions has grown by 71 million m3 since 2010, with most of the growth taking place in North America and Asia. In the case of Asia, its rising demand has been met mainly by imports, which have increased by 65% in six years, to 37 million m3.
Prices follow similar trends and turning points globally, said Mr Vidgren, although prices in the UK have been volatile and have risen sharply recently.
Mr Vidgren said that global demand for softwood is expected to grow by 44-89 million m3 until 2022. Most of this would be met by harvesting in the northern hemisphere, he said, but “despite the available supply of logs in coming years, the cost will increase due to dynamics and infrastructural, logistical and harvesting challenges”.
Guy Watt of John Clegg Consulting brought attention back to the domestic market by presenting the findings of the UK Wood Packaging and Pallet Market 2016 – jointly commissioned by TIMCON and the Forestry Commission (FC). The pallets and packaging sector uses around 1.1 million m3, or 30% of the sawn timber produced from British-grown roundwood every year.
About 250 million wooden pallets are in circulation in the UK and more than 40 million new pallets are added to the supply chain per year, plus imports and exports. The number of wooden pallet-based movements of goods in the UK per year is over 1.5 billion.
Figures showed the estimated number of new wood pallets manufactured in the UK in 2016 was 42.5 million – a 5.7% increase on 2015. The estimated number of wood pallets that were repaired was 41.4 million – an increase of 6.2% over 2015.
The volume of timber used in 2016 was down on 2015, falling 4.7% from 705,640m3 to 688,297m3 – changing specifications and greater efficiencies are likely to be the reason.
Andrew Heald, technical director at Confor, also focused on UK domestic timber supply and reported that standing timber prices are at a 20-year high. Several sawmillers and processors are experiencing major challenges in securing sufficient supplies of timber.
That comes as no surprise to industry stakeholders but it’s a different matter for policy makers. Confor members met Fergus Ewing, Scotland’s cabinet secretary for the rural economy and the Forestry Commission in February to drill the message home.
“It’s important for politicians and the FC to see the whites of our eyes,” said Mr Heald, adding that one of the conclusions of the meeting was that “there is a real need for better communications between the end users and the primary processors”.
He said the overall shortfall of timber availability was between 5-10% and that the situation was UK-wide, although most acute in southern Scotland and northern England.
One reason put forward for the shortages is that, in Scotland, the private sector now accounts for around 60% of supply and there remains a belief that owners are holding timber back. For some owners selling timber isn’t their primary motivation for growing trees, while for others it is a matter of poor access to sites. Either way, large volumes of timber are being held beyond economic rotation.
“There is probably more than a million hectares of unmanaged woodland out there,” said Mr Heald.
He added that there is a lack of confidence in timber production forecasts and concern over the accuracy of estimated timber volumes per hectare. There is also a view that timber use isn’t being recorded accurately, particularly when it comes to biomass.
“We urgently need new inventory data and better modelling,” he said. “We also need better data on how much wood is being cut and where it is going.”
