“Pallets move the world” is more than just a slogan. It has become a reality, especially as supply chains become more complex and more global.
Everything is put under a microscope from quality to environmental performance to profitability. And pallets are no different.
One area where the pallet industry is becoming more global is the regulatory front. Increasingly, countries and regions are looking at ways to reduce the environmental footprint of supply chains. This includes pallets and transport packing. A recent example is the EU’s Packaging and Packaging Waste Regulation (PPWR).
Officials in the European Union (EU) have targeted packaging waste as a key issue to reduce the environmental impact of its citizens. Their aim is to reduce packaging waste, encourage more reuse and boost the utilization of recycled materials. Instead of taking on various segments of packaging and the supply chain in small chunks, the EU has developed new regulations that will affect everything from food packaging to take-home containers at restaurants to wood pallets. The PPWR sets specific targets to reduce plastic packaging and to encourage more reusable and recycled packaging.
Since pallets travel globally, one of the big questions has been, “Will the EU require compliance for all imports and exports?” Initially, the draft legislation would have required global shipments to comply. A major focus of the legislation is to eliminate lots of single-use packaging, especially plastics. But the EU regulators wanted legislation that covers the reuse issue with a wide variety of products. And they wanted to use the purchasing power of the EU to affect global decisions.
What became clear though is that the PPWR could also cause a lot of global disruption if various sectors couldn’t adapt. Thanks to trade advocacy conducted by Woodpack Global/formerly the National Wooden Pallet & Container Association (NWPCA), EU officials in have decided to exempt imports and exports from the PPWR and have added special exclusions for custom-designed wood packaging products. The major driver for this change is that EU officials do not want the PPWR to disrupt the flow of goods and supply chains coming from other regions of the world. Other concerns include mandates that could have unforeseen consequences. For example, it would be difficult, if not impossible, for packaging providers for other countries to provide the reuse data mandated by the PPWR.
I recently sat down with Jason Ortega, senior vice president of Woodpack Global. He said, “The operative phrase is ‘within the territory of the Union.’ That distinction is where Woodpack Global focused its lobbying efforts — and where they secured a meaningful win for the North American pallet industry.”
The final regulations recently released by EU officials carves out import and export shipments from the reuse targets. Pallets used exclusively for international trade, products entering or leaving the EU, are not subject to the reuse or reporting mandates.
Critically, the Commission clarified that distribution centers and logistics hubs through which a shipment passes en route to its final destination do not count as the “first warehouse” for purposes of triggering the targets.
To put it in plain terms: a container arriving at a European port that gets broken apart and reloaded onto trucks headed to different retailers is still in transit until each load reaches its actual destination. The reuse clock doesn’t start ticking at the port. It starts when the goods arrive at the facility that ordered them and are unpacked for onward distribution within the EU supply chain.
What about transit through the EU to other regions? If a shipment enters the EU but its final destination is outside the EU, the reuse targets do not apply. Both the origin and destination must be within the EU for the mandate to activate.
The final regulations also exempts transport packaging custom-designed to fit the specific requirements of large-scale machinery, equipment or commodities. This is a second significant win that Ortega’s team pushed for, and one with real relevance for industries where one-size-fits-all platforms simply don’t work. Operators seeking to use this exemption will need to provide technical documentation proving the packaging was custom-designed for that specific product. This could include analysis using the new Crate Design System™ offered by Woodpack Global.
Even with these exemptions, Ortega expects ripple effects throughout the supply chain. Companies operating across multiple jurisdictions may design their packaging systems to maximize compliance across as many countries as possible. Others may opt for pallet rental or expendable packaging depending on the supply chain.
While the global supply chain did dodge a regulatory bullet, the situation shows how interconnected global networks are. One change in one region can affect pallet procurement around the globe. That’s why it is important that pallet companies stay aware of global regulations and work to inform officials of the impact of the industry.
