A no-deal Brexit scenario could have a significant impact upon supply chains between the UK and the EU for a variety of reasons, not least due to a simple regulation, named ISPM15, designed to standardise the safety of the wooden pallets that companies use to move goods.
The “International Standard for Phytosanitary Measures No 15” requires all wooden packaging materials, including pallets, crates and boxes, to be heat-treated to prevent the spread of wooden-borne pests and fungi across international borders.
Currently, pallets and other wooden packaging materials can travel throughout Europe without meeting the ISPM15 international standards, but those moving outside the EU either to or from, so called, non-EU “third party countries”, must be heat-treated and certified.
With the UK transition period ending at midnight on 31 December 2020, and with no EU trade deal currently in place, this will mean the UK becomes a third party country as per World Trade Organisation rules, and all freight going into the EU from the UK will need to be on heat-treated pallets and vice versa.
The latest Government guidance states:
“From 1 January 2021 all WPM (wooden packaging material) moving between the UK and the EU must meet IPSM15 international standards by undergoing heat treatment and marking. All WPM may be subject to official checks either upon or after entry to the EU.
Checks on WPM will continue to be carried out in the UK on a risk-targeted basis only. The plant health risk from WPM imported from the EU is not expected to change from 1 January 2021.”
It is clear the demand for certified wooden pallets has increased, and will continue to increase dramatically, and that demand will most likely outstrip supply. With many other Brexit and COVID-19 issues to consider in 2020, we expect this may have “gone under the radar” for a lot of businesses that import or export goods to and from the EU.
Mitigating the risk
Below are some quick tips to help businesses with control of their supply chain movement to get ready and try to mitigate the risk:
- Create a register of the pallets you currently use and/or exchange when transporting goods.
- Determine your level of risk i.e. how many non IPSM15 regulated/compliant pallets you currently use within your supply chains.
- Allocate funds to purchase IPSM15 heat-treated pallets in the event of a no-deal Brexit.
- Consider alternatives – plastic pallets could be a viable alternative, as they are exempt from IPSM15 and increased demand has made them more cost effective in recent years.
For those businesses reliant on third party supply chains the above are issues you should be raising with your suppliers as soon as possible.
This article was co-written by Calum Lavery, Trainee Solicitor.