Pallets Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

Pallets Market Analysis

The pallets market is anticipated to register a CAGR of 5.4% during the forecast period (2022 - 2027). As supply chains have become steady globally, customers demand greater transparency regarding how products and materials move through them. So the companies are embedding RFID chips directly into pallet materials, tracking and tracing 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 efficiently and cost-effectively.

• Surging demand for plastic pallets across industry verticals is expected to drive the market demand. In the past decades, wooden pallets have been used due to their strength and easy manufacturing process; however, due to certain disadvantages such as moisture absorption, less durability, and breakage of splinter, the demand for plastic pallets is growing. Additionally, owing to the advantages such as environment friendly, lightweight, and growing awareness to reduce carbon footprint is propelling the demand for pallets in logistic and shipment companies as they are shifting from wood pallets to plastic pallets.
• Moreover, the increasing demand for HDPE material in the automotive and shipping industry, owing to its ability to handle heavy loads, is boosting the demand for pallets. Also, disposable plastic pallets are widely used in the F&B industry as they are resistant to organic and inorganic chemicals at normal temperatures.
• The increasing adoption of pallets for transportation use is expected to drive the market in the forecast timeframe. Also, the major transport mode for cross-border trade is through waterways (shipping), contributing to ~90% of traded goods. This, in turn, indicates that oceans provide the main transport arteries for global trade. Furthermore, according to the Organization for Economic Cooperation and Development (OECD), maritime trade volumes are set to triple by 2050 as demand for global freight increases.
• Limiting availability and the high price of the raw materials for manufacturing pallets are anticipated to hinder the market growth. As wooden pallets capture the market, price fluctuations challenge market growth. Also, rising lumber prices, trucking issues, and high demand contribute to the worldwide shortage of wood pallets, nearly doubling raw materials prices.
• Additionally, the COVID-19 pandemic significantly impacted the hotel, tourism, manufacturing, and construction sectors. Manufacturing operations were suspended or limited. Globally, supply chains for the construction and transportation industries were hampered. This resulted in a decrease in both pallet production and market demand, which restrained the market's expansion. On the other hand, businesses are gradually returning to their normal production and services. The pallets market companies restart operations at full capacity, which is anticipated to aid in the market's recovery.

Pallets Industry Segments

A pallet is a flat panel supporting goods during transportation, mostly through 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.

The Pallets Market is segmented by Types (Wood, Plastic), End-User (Transportation & Warehousing, Food & Beverage, Pharmaceutical, Retail), and Geography.

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Pallets Market Trends

This section covers the major market trends shaping the Pallets Market according to our research experts:

Increasing Demand for Plastic Pallets Across the Industry Verticals

• Plastic pallets are rigid structures that provide mechanical stability to a bulk quantity of goods during handling to preserve their quality. Handling includes all activities related to lifting, moving from one point to another, stacking, product storage, and long-distance transportation by land or sea. Plastic pallets are designed to be moveable by equipment such as forklifts, pallet jacks, and front loaders to facilitate the mobility of goods. Plastic pallets are highly recommended in food & beverage, pharmaceutical, chemicals, and other industries, where the risk of chemical contamination is significantly high.
• Moreover, Plastic pallets are one of the fastest-growing pallet types on the market. Since manufacturers can recycle them or melt and reform them into other manufacturing supplies, this option is popular among businesses looking to reduce waste. Plastic pallets have also risen in demand and popularity because they can store products without the risk of pests or termites.
• The most common material used to mold plastic pallets is HDPE. HDPE dominated the market for the year 2021. The dominance was attributed to extensive availability and sturdy nature. Milk jugs are the single most significant use of HDPE. It is also very inexpensive compared to other plastics, especially recycled resin. PP pallets are the second most widely-used plastic pallets after HDPE. They are more rigid and substantial than HDPE but have lower impact resistance. They are also compatible with most chemicals. However, they are more expensive than HDPE.
• On the other hand, Wood pallets are highly susceptible to moisture and pose a risk of sheltering bacteria, pests, or fungi, damaging stacked food and pharmaceutical goods. In the age of COVID-19, that has taken on even greater significance, at least in the public mind. Logistics and shipment companies are shifting toward plastic pallets because of their advantages, such as being lightweight and reusable.
• However, plastic pallets are also susceptible to drastic changes in temperature and weather, making them less effective during transportation. The cost of plastic pallets is also considerably higher compared to the cost of wooden and recycled pallets. Businesses ultimately alternate between calculating projected costs using rental, recycled, or whitewood materials to determine the best material for their pallets.

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