In addition to our obvious humanitarian concerns regarding the current conflict in Ukraine, Scott Pallets continue to monitor the evolving situation and how this may impact the sourcing and availability of timber. UK or Baltic pallet timber remains the choice for the pallet and packaging industry. However, the UK is still heavily reliant upon imports, accounting for around 70% of timber demand.
The imposition of several financial, trade, shipping and immigration sanctions has been enacted to encourage Russia, and connected entities, to cease actions that destabilise Ukraine.
Firstly, our current timber inventory remains at a very satisfactory level due to the supply chain we have in place, so we have no immediate concern in terms of timber availability or any impact upon customer service.
Scott Pallets has minimal exposure to timber sourcing from Russia and nearby Belarus. However, depending on the duration of sanctions, we do expect countries in mainland Europe and Scandinavia which have a more significant exposure to Russian sourcing to redirect their buying efforts to other competing sources. This switch may well have implications for both capacity and price.
Similarly, our shipping logistics are not serviced by any Russian-owned vessels, so there will be no direct impact of associated sanctions.
This remains a grave and developing situation, and we would expect to provide further updates in due course. We anticipate price pressure will come to bear on timber, associated transport and energy costs, and inflationary pressures.
Still, we continue to be vigilant and proactive to maintain ongoing pallet availability. As always, we respectfully ask all customers to fully engage with their account manager to ensure we have the best available forecast information to allow for forward planning – only by doing this can we mutually support each other for business continuity in these challenging times.
