Pallets Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Market Overview

The pallets market is expected to register a CAGR of 5.2% during the forecast period (2021 - 2026). As supply chains become steadily global and customers demand greater transparency as to how products and materials move through them. So by embedding RFID chips directly into pallet materials, it is possible to track and trace individual pallets in real-time. Pallet tracking can help businesses manage recalls and expiration dates, minimizing product loss and getting items to their end-users in an efficient and cost-effective manner.

• Increasing demand for plastic pallets across the industry verticals is driving the market. From the past three decades, wooden pallets have been adopted due to their strength and easy manufacturing process, however it has many disadvantages such as less durability, moisture absorption, and its splinter break easily. Nowadays logistic and shipment companies are shifting towards plastic pallets owing to its advantage such as lightweight and environmental friendly, and growing awareness to reduce carbon footprint is also increasing the plastic pallet demand. Also the demand for HDPE material is increasing in the automotive and shipping industry, due its ability to handle heavy loads. HDPE disposable plastic pallet are extensively used in the food and beverage industry as they are resistant to organic and inorganic chemicals at normal temperature. According to Woodworking Network, the demand of plastic pallet in United States is increasing yearly at a high growth rate. The demand is expected to increase to 43.4 million units till end 2019 from 41.5 million units in 2018 in all industry verticals.
• Adoption of pallets for transportation purpose drives the market. The freight industry entails firms that move bulk goods as part of an integrated, multimodal logistics network. According to the Organization for Economic Cooperation and Development (OECD), the global freight volumes will expand more than fourfold by 2025, and road freight dominates the segment, controlling nearly one-third of the total global logistics spend. For instance, motorcycle is an example of a product where the use of pallets is highly required. It cannot steadily stand by itself because its base is composed of 2 wheels and relying on a motorcycle stand would not assure that it would not fall especially when inside a running cargo truck. Mounting the product on a pallet and tightly strapping it on prevent it from falling and bumping to other valuable product. So, due to increasing freight volumes, the demand of pallets will continue to increase in future.
• Limiting availability and high price of raw materials for manufacturing pallets is the reason which restraints the market growth. As the market is captured by wooden pallet, and these are made by lumber, often fluctuations in the prices challenges the market to grow. Lumber prices typically rise in the spring as builders stock up for construction season and also due to bad weather and less penetration towards home building, the prices fluctuates.

Scope of the Report

A pallet is a flat panel supporting goods during transportation mostly through the wooden and plastic pallets. The major end-users of pallets include durable and non-durable goods manufacturers, and non-manufacturing sectors such as food & beverages, retail, transportation & warehousing, etc.

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Key Market Trends

Wood Holds the Significant Share in The Market

• Wooden pallets play important roles in the movement of safe, effective transport and storage platforms throughout the handling and distribution process worldwide. Although there are standardized versions, pallets are produced in many sizes and configurations to accommodate different handling equipment (generally forklifts), and cargoes.
• Pallet construction is becoming more standardized in many countries. For instance, in Europe with a migration to the EUR pallet (specified by European Pallet Association) the most prevalent size of wood pallet is 800mm x 1,200mm unit. However, wooden pallet sizes and designs are much less standardized in North America, where most pallets in use are custom-designed to suit transport and shipping configurations.
• Over 70% of all wood pallets are now recycled, which is a much higher recycling rate than for aluminum, paper, or plastic. Also, trees are usually not cut down to make pallets. The wood which is used for pallets is a by-product of the timber used in the construction of houses and furniture.
• According to Rose Pallet company, U.S. industry harvests 42% of the annual growth in hardwood timber that are biologically available to harvest, and each day there are more than 1.8 billion pallets in service in the United States, where 93% of these pallets are made from wood, and rental pallets are mostly provided by CHEP and PECO company. Moreover in North America, food and beverage industries are the largest users of pallets followed by the chemical and pharma industries, and then agriculture.
• Meanwhile, in April 2018, CHEP announced that its 40×24 inch pooled (shared and reused) half pallets have achieved carbon neutral status. This makes CHEP’s half pallet the first and only CarbonNeutral® certified pooled platform in North America.
• However, competition from substitute products such as plastic and steel pallets and the fragmented nature of the industry is giving challenge in the growth in United States. But industry could benefit from adopting better supply chain management practices in their strategic planning and operations, both to ensure supply of raw materials and ensure better service to customers

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