Wood pallets continue to dominate the market owing to the associated low costs
Wood is the most preferred material for pallets across the globe, as it offers huge advantages in terms of response time and low startup cost for customized designs. Wooden pallets sometimes end up with sharp splinters causing injuries or protruding nails that damage food packaging. But due to the low costs, wood pallets will continue to dominate product sales in most areas across the globe. However, wood pallets these days are largely being replaced with plastic pallets. As food safety compliance and reusability is a growing attraction among manufacturers, they are looking for sustainable material handling options and thus, plastic pallets will continue to gain acceptance in a range of industries including foods & beverage, pharmaceuticals, groceries and automotive.
Tier 3 key players contribute around 90% revenue share in the global pallets market
There are uncountable small players engaged in the manufacturing of pallets. This makes the pallet market highly fragmented. There are a large number of small players involved in the manufacturing of wooden pallets. Wooden pallets hold significant share in the global pallets market and a majority of pallet manufacturers fall in the Tier 3 category. Key players such as Falkenhahn AG, Edwards Timber Company, Inc., and World Steel Pallet Company Ltd. collectively hold about 75%-90% of the global pallets market share.
Rising demand for alternative pallet types anticipated to boost the growth of plastic pallets in the global pallets market
Non-wood pallets are likely to experience a massive increase in demand across the globe. Among these, plastic pallets are expected to be the most attractive option. The major reason behind the increase in popularity of and demand for plastic pallets is due to the ease with which these can be cleaned. In addition, they are made of recycled materials. This is a very attractive benefit for companies working towards becoming more environment friendly. This factor is creating a positive impact on the plastic pallets market.
Another factor which is driving the growth of plastic pallets is the adoption of pallets by new users. The pallet utilization in various regions across the globe is typically low compared to the size of their manufacturing, warehousing, and construction sectors. However, in the coming years, greater number of potential pallet users will strive to become more competitive on a global scale by improving operating efficiencies and reducing product damage in shipments through the use of pallets.
The increase in trade volume especially in the MEA region is also anticipated to fuel the growth of the plastic pallets market. GCC countries are located in between the Far East and Europe. Attributing to their location, these countries can be considered as the gateway to the world’s most progressive markets such as India and China. The transport and logistics sector in the Middle East region is showing substantial growth rates with a long-term positive outlook. The plastic pallets market is thus expected to witness significant growth and is a vital link in supply chain and storage.
With a huge incremental opportunity, the global pallets market is projected to grow at more than 5% CAGR during the period of assessment
During the period 2012 – 2016, the global pallets market expanded at a CAGR of 4.7%. However, during the forecast period – that is between 2017 and 2025 – the market is anticipated to grow at a CAGR of 5.4% owing to increasing demand for better and safe transportation coupled with the rise in demand for pallets from various industries like food, agriculture, chemicals etc. The global pallets market is projected to represent incremental opportunity of more than US$ 25 Bn between 2017 and 2025.
Asia Pacific is expected to be an opportunistic market in terms of consumption in the global pallets market. Key players in the region are expanding their footprint to leverage the burgeoning food & beverage and transportation sectors in the Asia Pacific region. Europe and North America are the early adopters of pallets in the food industry. The pallets market is characterized by the presence of a large number of Europe, North America, and Asia Pacific based players. There are a limited number of manufacturers in MEA and Latin America regions. The global pallets market has witnessed increasing adoption of plastic pallets owing to its various advantages over wood pallets. This market is expected to be characterized by new product development over the forecast period. According to the analysts of Persistence Market Research, the market for wooden pallets is highly organized owing to a large number of trivial players in wood pallet manufacturing. These interesting findings are the key highlights of a newly published report titled “Pallets Market: Global Industry Analysis 2012 – 2016 and Forecast 2017 - 2025.”
Another observation elucidated in the report pertains to the key player strategy of strengthening product portfolio by launching new products with improved characteristics. Also, strategic collaborations with small players to gain regional advantage is expected to be the key trend over the projected period. Another important feature of the global pallets market is the status of the wooden pallets market. The wooden pallets market is at a saturation stage. However, these pallets are expected to dominate the global pallets market throughout the forecast period. On the other hand, the demand for plastic pallets is increasing across various industries due to its inherent advantages. Moreover, these pallets minimize the rate of injuries as plastic pallets do not have nails and splinters.
Market participants indicate a preference for block pallets over stringer designs
According to the CEO of a North America based wood pallet manufacturing company, any global standardization of pallets is likely to support block pallets as the platform of preference. The customers involved in shipping largely prefer block pallets. North American pallet users are also increasingly moving towards block pallets.
The President of a plastic pallet manufacturing company from Europe region said that customers have been asking for plastic pallets because many new foreign import restrictions have been imposed that make the use of wooden pallets less attractive. Plastic pallets are insect-free, can be easily cleaned and are totally recyclable. The palletization boom is set to occur in Asia and according to the Operations Director of an APAC pallet pooling service provider, the China market is expected to grow at unprecedented rates over the next 10 years as the country works to improve its logistics to cater to the global industrial metamorphosis.
Market sentiments analysis has been exclusively covered in this report. The analysts have discussed the way wooden pallets have gradually shifted to alternative pallets. The expert team has observed that nails remain the most major cause of injury thereby causing a shift to the alternative (preferably plastic) material as a replacement to wooden pallets. The analysts have conducted more than 50 successful primary interviews while examining this market. Apart from extensive primary research, in-depth secondary research is used to arrive at the overall market size, top industry players, top products and industry associations.