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Pallets are flat portable platforms used for handling, storing, or moving materials and packages either inside warehouses or factories or between locations.
Pallets are constructed primarily from wood but can also be made from other materials such as plastic, corrugated board, metal, or molded fiber. Pallets fabricated from more than one type of material are classified depending on the type of material accounting for the greatest portion of their composition.
Wood pallets are available in three types:
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Pallet demand in this study is also segmented by market. In analyzing demand by market, the party who places goods on the pallet is considered to be the user of the pallet:
For example, when a manufacturer of breakfast cereal purchases a pallet to ship boxes of the cereal, this is considered to be demand by a manufacturer in the food and beverage market.
When a pallet management firm purchases a pallet, stores it, and then leases it to a manufacturer, this is considered to be demand by a warehousing services provider.
food and beverage
other manufacturing industries (e.g., electronic products, metal products, machinery)
third party warehousing and storage
pallet management services
other markets (e.g., military transportation and storage, retailers)
The term “stock” refers to all pallets held by users, including those not actively in use.
Export and import figures includes only pallets traded as a good unto themselves. Pallets crossing international borders as containers for other products are excluded from trade figures.
Growth in the global pallet market will be driven by the need to expand pallet stocks in industrializing nations, particularly in the Asia/Pacific region. Sales in these countries will be boosted by both the expansion of internal distribution networks and rising manufacturing of goods for export.
Asia/Pacific Region to Account for the Bulk of Growth
The Asia/Pacific region, which recently became the world’s largest regional pallet market, is projected to account for over two-thirds of pallet sales between 2019 and 2024. India and China are expected to be the world’s two fastest growing national markets, building on already sizable demand levels as they expand their pallet stocks. Indonesia and a handful of other rapidly developing Southeast Asian nations are also expected to achieve strong gains.
Replacement Sales Sustaining Demand in North America & Western Europe
Pallet markets in North America and Western Europe are mature, and sales growth in much of these areas is expected to be sluggish through 2024. However, countries in these regions have accumulated sizable pallet stocks, and the ongoing need for replacement pallets will sustain a high level of replacement sales. Suppliers of frequently replaced products like wooden pallets will find themselves insulated against volatility, while producers of longer-lived product types like plastic and metal will face more uncertain market conditions.
Sustainability Concerns Influencing Market Development
Pallet manufacturers and users are increasingly factoring environmental considerations into their decisions, particularly in high-income countries. Emphasis on sustainability is expected to benefit producers of plastic pallets, as these are long-lasting products that can be made with 100% recycled material. Similarly, corrugated and molded pulp pallets are desirable for their low environmental impact.
However, suppliers of both plastic and corrugated pallets will continue to face obstacles – high costs for the former, short lifespans for the latter – that will limit their ability to expand their market niches. Users of wood pallets are also improving sustainability by making a greater effort to track usable pallets and reuse components. Wooden pallet users can boost sustainability by increasing their use of pallet management services, which typically place a particularly strong emphasis on minimizing pallet waste.
COVID-19 Pandemic Hampering Expansion of Pallet Stocks
The impact of the COVID-19 pandemic will significantly reduce stock expansion sales in the short term as manufacturing activity falls. Infrequently replaced products like plastic and metal pallets will fare particularly poorly, while demand for wood pallets, although declining, will be sustained by replacement sales due to their shorter lifespan.
While overall demand outlooks in the near-term are negative, the e-commerce segment provides a relative bright spot. Concern over possible contagion at grocery stores and other retailers has driven consumers to increasingly order online where possible, and major e-commerce firms like Amazon have expanded their workforces in response to the pandemic.