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

2022-01-15 10:10:11 By : Ms. Sasa Summit

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.

New York, Dec. 23, 2021 (GLOBE NEWSWIRE) -- announces the release of the report "Global Pallets Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)" - 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 efficiently and cost-effectively. Key Highlights Increasing demand for plastic pallets across the industry verticals is driving the market. For 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 splinter break easily. Nowadays, logistic and shipment companies are shifting towards plastic pallets owing to its advantage, such as being lightweight and environmentally 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 to its ability to handle heavy loads. HDPE disposable plastic pallets are extensively used in the food and beverage industry as they are resistant to organic and inorganic chemicals at normtemperaturesure. According to Woodworking Network, the demand for plastic pallets in the United States is increasing yearly at a high growth rate. The adoption of pallets for transportation purposes 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, the 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, preventing it from falling and bumping to other valuable products. So, due to increasing freight volumes, the demand for pallets will continue to increase in the future. Limiting availability and the high price of raw materials for manufacturing pallets is the reason which restraints the market growth. As the market is captured by wooden pallets, which are made of lumber, often fluctuations in the prices challenge 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 the home building, the prices fluctuate. 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 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, the United States industry harvests 42% of the annual growth in hardwood timber that is 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, the food and beverage industries are the largest users of pallets, followed by the chemical and pharma industries, and then agriculture. According to the European Federation of Wooden Pallet & Packaging Manufacturers, price increases in the wooden pallet and packaging industry was deemed inevitable due to the pandemic creating ripples in the supply chain. Independent indices from the member states in Europe indicated a significant price rise during Q4 2020 as outlined in the FEFPEB’s quarterly Pallet Timber Price Index and is expected to increase across Europe in 2021. However, competition from substitute products such as plastic and steel pallets and the fragmented nature of the industry is giving challenge to the growth in the United States. But the 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. Asia Pacific Account for Significant Market Growth Pallet utilization is anticipated to be high in the Asia Pacific during the forecast years. The region shows the highest adoption of plastic and wooden pallets for massive imports and exports of goods. Countries such as Japan, China, and India are likely to be the most progressive markets in the forecast years. Further, the theme of sustainability has marked the functioning of the pallet industry in the Asia Pacific. End-user industries can be identified to opt for products that offer longer lifespans encouraging manufacturers operating in the region to innovate on these lines. The manufacturers of pallets can also be noticed to engage in partnerships for the same. For instance, in March 2021, Yelopack, a supply chain management company offering smart logistic solutions based on a shared pallet and package service to the industrial customers with operations across the Asia Pacific, including China, Russia, Korea, Japan, Singapore, and Malaysia adopted the AFFINITY polyolefin elastomer (POE) in its existing plastic pallets. The adoption of the technology offered by Dow allows Yelopack to increase the life span of its pallets by 150%, reducing its carbon footprint. Within Asia, the two most popular pallet sizes are the square 1100mm x 1100mm pallet and the 1200mm x 1000mm pallet. Both are among the six ISO-approved pallet sizes, although the 1200mm x 1000mm pallet is better suited for export from Asia-Pacific to Europe and the United States as these dimensions integrate nicely into both regions’ systems. For instance, the Loscam Asia pallet presents the standard pallet for retailers, manufacturers, and distributors across the Asian region. The ECR-nominated size of 1m x 1.2m (1,200mm x 1,000mm) four-way-entry pallet has been benefited in revolutionizing supply chains in Asia, bringing the inherent benefits of standardization to warehousing, transport, product handling, product integrity, and safety. The region has also witnessed the injection of funds which is augmenting the growth of the market. For instance, in January 2021, Morgan Stanley and LEAP (Leading Enterprise in Advanced Pooling) announced that Morgan Stanley India Infrastructure, an infrastructure-focused fund invested USD 25 million in LEAP India. LEAP India is one of the key players in the pallet pooling segment of the country and aims to expand the assets of the company from 4 million units which includes pallets amongst others, to 6 million units. Plastic pallets are regular within the automotive, dairy, pharmaceutical, and beverage industries, where plastic pallets make up 50% or more of the reusable pallet pools in some Asian countries. For instance, DIC’s chemical operations enclose downstream business segments, such as plastic molding and the company is expanding and diversifying its plastic pallet operations. The plastic pallet has been a part of DIC’s product lineup for over 35 years, and the company’s product reflects a good sale in Japan, where they are sold under the name of DIC PALLET. DIC also started to expand its plastic pallet operations in South East Asia and is currently considered one of the world’s leading suppliers in these regions. Competitive Landscape The pallets market is fragmented in nature due to the presence of several small and large manufacturers who compete against one another in terms of prices and quality. The rise of green consumerism is driving the growth of corrugated pallets as means of sustainable packaging. Corrugated pallets have been gaining traction, with established players innovating the strength of the pallets for varied applications. Further, companies operating in the studied segment are anticipated to accelerate the supply chain transition to environmentally sustainable solutions. Key players are Falkenhahn AG, CABKA Group GmbH, CHEP, etc. Recent developments in the market are - December 2021 - CHEP, a supply chain solutions company is offering various kinds of pallets, announced that the company rented out and reused 345-million wooden pallets used for transportation of goods, reducing cost and the overall environmental impact. The company partnered with food and beverage company Clover which led to the reduction of carbon dioxide emissions by 56%, its wood usage by 71%, and its waste by 59%, which is equivalent to saving 2,666 trees a year. December 2021 - Goedis, a supply chain provider, announced that it entered into a five-year unit load device (ULD) supply, management, and repair agreement with Unilode Aviation Solutions. Unilode supplies containers and pallets to Geodis and provides its full range of ULD management solutions, including procurement, planning, logistics, repair, and digitalization. December 2021 - Kamps Inc., a pallet recycler and supplier, acquired Tritz Pallet, a company also offering pallet recycling and full-service pallet solutions. The acquisition enhances Kamps’ physical footprint to over 40 asset-based locations solidifying its presence in the Great Plains region. November 2021 - Kraftpal, a manufacturer of durable lightweight and recyclable corrugated pallets, became one of the proponents to develop designs of corrugated cardboard pallets that meet industry standards of legacy wooden pallets aiming to eliminate the use of wood in the mainstream logistical pipelines. This move by Kraftpal is expected to get the ball rolling for the paradigm shift toward sustainable solutions in the studied market. Additional Benefits: The market estimate (ME) sheet in Excel format 3 months of analyst support Read the full report: About Reportlinker ReportLinker is an award-winning market research solution. 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