Dunnage packaging is a common term used by automotive and industrial packaging technicians and is primarily used in interior packaging components; such as boards, blocks, planks, metal or plastic bracing; for supporting and securing packages in shipping and handling. Dunnage packaging helps to resist moisture, mechanical damage, and contamination throughout supply chains.
Strong demand for dunnage packaging from end-use industries driving the dunnage packaging market.
Dunnage packaging systems have made a profound impact on the automotive industry, with a large number of reusable handheld dunnage designed to facilitate automotive part protection. The growth of the dunnage packaging market in the automotive industry is expected to be driven by factors such as short delivery distances between component or subassembly suppliers and assembly plants; regular, predictable delivery schedules; and dedicated transportation providers serving the supply chain.
Similarly, The food & beverage industry is one of the leading consumers of dunnage packaging. This industry is witnessing improved sales volumes due to rising disposable incomes. One of the major factors driving the growth of the food & beverage industry is the changing lifestyles and preferences of consumers, which further results in increased demand for ready-to-eat foods with a strong emphasis on food safety & packaging integrity.
The demand for dunnage packaging is expected to be driven by product safety offered by this type of packaging, as well as environmental and cost benefits associated with it.
Lower Cost: Compared to one-way packaging utilized only once, dunnage packaging provided by the companies can be used multiple times, thus eliminating the recurring costs of packaging production. Dunnage packaging also reduces warehousing costs owing to improved handling and a lower requirement for space.
Improved Product Protection and Facility Management: Dunnage packaging systems are robust and purpose-built; that is, they support heavy loads and provide excellent resistance to external forces, impact, and factors such as dirt, trash, and dust. They can be stacked high in trailers or warehouses, thus optimizing space and providing a more organized facility appearance.
Europe dominated the market in 2019 and is expected to show similar trends in the coming years
Asia Pacific accounted for a significant share of the dunnage packaging market in 2019. The region remains one of the important markets for dunnage packaging companies due to the presence of a strong automobile hub and stringent government regulations related to packaging waste. Furthermore, the improving Eurozone economy is likely to increase the industrial output in the region, which, in turn, is likely to drive the growth of the automotive, construction, chemical, and food & beverage markets in the coming years.
Key players to expand their geographical presence through new product launches, acquisitions, and expansions
The market for dunnage packaging is fragmented due to the presence of many players in the market. These players adopt collaborations and new product launches as their key strategies to achieve a global presence and cater to the needs of their customers. For instance, DS Smith Plastics opened a new manufacturing facility in Romeoville, IL, US. The new facility is the first rigid packaging manufacturing operation of DS Smith in North America. This strategic initiative is expected to enhance the company’s position in the region in response to the rising demand for its rigid packaging products in the US.
Similarly, ORBIS Corporation, a subsidiary of Menasha Corporation, acquired Hinkle Manufacturing (US). Hinkle serves the automotive industry with highly customized dunnage and produces trays and other plastic components. This strategic initiative is expected to expand ORBIS’s portfolio of custom reusable dunnage packaging products.
The key players have been undertaking these strategies to leverage their strengths and develop better products. These developments will positively impact the dunnage packaging market in the next few years. The most common strategies these players adopt include product launches, mergers, and expansions.
TABLE 1: Dunnage packaging market: key developments
| Year-Month | Deal Type | Company | Description |
| May 2021 | New Product Development | Orbis Corporation | ORBIS Corporation is expanding its production of Dunnage packaging. There is a new automotive packaging product offered by this key player. This is a new type of packaging material that is soft. They are useful for many applications in automotive. The development of this new product will increase the adoption rate of the market. |
| March 2020 | Acquisition | Liquibox | Liquibox, acquired the plastic division of DS Smith for an enterprise value of over USD 448.6 million. DS Smith’s plastic division encompasses flexible and rigid packaging operations, wherein the Liquibox brand absorbed the Worldwide Dispensers and flexible packaging businesses. Meanwhile, DS Smith’s rigid packaging businesses for injection Molded, foam, and extruded products were split into independently operating divisions, namely DW Reusables, Corplex, and Engineered Foam Products. |
| May 2018 | Acquisition |
Menasha Corporation | ORBIS Corporation, a subsidiary of Menasha Corporation, acquired Hinkle Manufacturing (US). Hinkle serves the automotive industry with highly customized dunnage and produces trays and other plastic components. This strategic initiative is expected to expand ORBIS’s portfolio of custom reusable dunnage packaging products. |
| September 2017 | Expansion |
DS Smith | DS Smith Plastics opened a new manufacturing facility in Romeoville, IL, US. The new facility is the first rigid packaging manufacturing operation of DS Smith in North America. This strategic initiative is expected to enhance the company’s position in the region in response to the rising demand for its rigid packaging products in the US. |
| August 2017 | Agreement | Nefab | Speed Group (Sweden) and Nefab Group entered into a cooperation agreement to combine their logistics and packaging expertise in Sweden and overseas. |
Authors: Anwaar Logde, Senior Research Analyst– Chemical & Materials, and Tejvir Singh, Associate Manager – Chemical & Materials
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