Pallets in the Modern Warehouse: The State of the Industry
large piles of plastic pallet stacks

Pallets in the Modern Warehouse: The State of the Industry in 2017

Pallets are an essential part of any warehouse, manufacturing plant or fulfillment center. But as technologies advance and these facilities evolve with the times, it’s worth wondering what role pallets will play in the supply chain of the future.

Modern Material Handling magazine recently surveyed its subscribers to produce its annual report on the state of the pallet manufacturing industry. This report, along with other industry studies such as Persistence Market Research’s “Pallets Market: Global Industry Analysis 2012 – 2016 and Forecast 2017 – 2025,” gives us a good indication of where things are today, and where they are likely to go in the future.

What Are the Current Growth Projections for the Pallet Manufacturing Industry?

According to the PMR report, the pallet manufacturing industry is expected to experience strong growth through to 2025. From 2012 to 2016, the global market expanded at a CAGR of 4.7%. Continuing that trend, from 2017 to 2025, current growth projections predict a CAGR of 5.4%.

This growth will be fueled in part by increased demand for safe, secure transportation in an increasingly global supply chain, as well as industry-specific applications for customers in food and beverage, agriculture, chemicals and other sectors. Non-wood pallets — including plastic products — are likely to constitute the fastest growing segment of the market as they see more widespread adoption globally.

What Do Customers Look for in a Pallet?

The Modern Material Handling survey provides more specific insights about customer demand when it comes to pallets. Among those surveyed, 93% used wood products, 45% plastic, 18% wood composite and 10% metal pallets.

Price ranked as the number one concern when making a purchase decision, with 59% reporting that it was something they consider. Other high-ranking factors included strength (56%), durability (50%) and reusability (44%).

Pallet Buying Habits

The MMH survey also asked about respondents’ preferences when buying wooden pallets. Despite a majority of participants (53%) experiencing quality or availability issues in the past, 62% reported a preference for used or core pallets over new.

When it comes to pallet types, 50% of MMH readers use stringer pallets exclusively, while 17% use block, and 33% use both types. This represents a continuation of a trend seen in the past three years, with block-type pallets declining from a 25% share of the market in 2015 to their current low. As far as sizes, 65% of respondents use 48” by 40” pallets, while 30% use 48” by 48”. Smaller pallet sizes continued to experience steady growth, as they have since 2015.

Looking to the Future

The MMH study confirms the findings of the PMR report about the strong growth potential for plastic pallets. Seventeen percent of respondents used more plastic pallets in 2017 than in previous years, while 15% expect to use more in the coming year. Other notable trends include increased customer demand for stringer-type pallets and for alternative material products such as treated or pest-free pallets.

If you’re interested in learning more about the MMH study and what it means for pallet market analysis, you can read additional findings from the report.

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