US demand for pallets is projected to rise 6.1% annually through 2015, according to a new study on the pallet market from Freedonia Group.
US demand for pallets is forecast to rise 6.1 percent per year to 1.3 billion pallets in 2015, valued at $15 billion. This pace will represent a rebound from the 2005- 2010 period, when demand fell 4.5 percent annually, reflecting the decline in manufacturers’ shipments between 2007 and 2009 and only the partial rebound through 2010. Through 2015, pallet demand gains will be driven by an expected advance in manufacturers’ shipments from their low 2010 base.
Plastic pallet demand to grow at double-digit rates
Plastic pallet demand is projected to advance at a double-digit pace through 2015, rising to 34.5 million units. The report states that demand will be driven by consumer interest in the use of these pallets because of their performance qualities. Plastic pallets resist damages caused by wear and tear and can last a long time without requiring repair. The pallets are impervious to contamination caused by bacteria and other pathogens, and can easily be cleaned. Plastic pallets are also seen as being environmentally friendly, as they can be recycled once they have reached the end of their lifespan. Pallets made from wood — primarily lumber — will continue to account for the largest share of the US pallet market. Demand will be driven by the new pallet market, as manufacturers’ shipments rebound and more pallets are needed to ship and haul products. However, refurbished wood pallets, which accounted for 65 percent of wood pallets sold in 2010, will continue to lead the market in 2015. Pallet refurbishing firms, which repair damaged and worn pallets, will see more demand for their services, as it is often more economical to repair an existing pallet than to purchase a new one. Environmental concerns will also boost demand for refurbished pallets, as less wood is required to repair a pallet than to construct a new one.
Manufacturing to remain largest market for pallets
Manufacturing will continue to account for the largest share of pallet demand, totaling 75 percent of the market in 2015. Demand will be supported by continued recognition of the suitability of pallets as an inexpensive way of shipping and hauling goods while avoiding product damage. Providers of warehousing services — such as pallet management services and pallet pools — will post 2.5 percent annual gains in pallet demand through 2015. These companies, which manage pallets and coordinate the shipping and handling of materials from original manufacturer to end user, will purchase new pallets and expand their pallet refurbishing operations to add to their pallet stocks and more effectively serve existing customers.
This new industry study presents historical demand data (2000, 2005 and 2010) and forecasts for 2015 and 2020 by material, product, market and US region. The study also considers market environment factors, evaluates company market share and profiles 42 industry players.