PALLET MARKET ANALYSIS

The Global Pallet Market was valued at US$ 57.0 Billion in 2022 and is expected to expand at a CAGR of 5.9% in terms of revenue and market value is expected to reach US$ 89.9 Billion during 2023-2030.

Driver:

Increasing Number of Manufacturing Units and the Growing Housing and Construction

Increasing number of manufacturing units and the growing housing and construction sector are some major factors propelling the growth of the market. Moreover, the increasing import-export activities in the pharmaceuticals and food and beverage industry have fuelled demand for reliable and durable product storing materials, including pallets. Plastic pallets accounted for the fastest-growing material segment, as plastic pallets are preferred for the shipment of goods. This is owing to the materials’ durability, lightweight, and low cost in terms of floor space and labor requirements. Moreover, various companies such as Amazon Inc. and Inditex S.A. are investing in R&D activities such as developing RFID(Radio Frequency Identification) tags for tracking pallets. Such R&D activities are expected to drive the growth of the global pallet market.

Rising Sales of Smartphone & E-commerce:

Increasing sales of smartphones, penetration of the internet, and e-commerce, the demand for logistic services increased this is strengthening the growth of the pallet market across the globe. According to India Brand Equity Foundation in 2022, in recent years India has experienced a boom in internet and smartphone penetration. The number of internet connections in 2021 increased significantly to 830 million, driven by the ‘Digital India’ program. Out of the total internet connections, 55% of connections were in urban areas, of which 97% of connections were wireless.

Restraints:

High Cost of Wood and Risk of insects and fire:

Wood is the most common material used for manufacturing pallets. Market players prefer wood pallets, wood pallets are very easy to handle. However, wood pallets are more costly than plastic and metal pallets. Also wood has the risk of insect infections and risk of fire. According to the Fraunhofer Institute for Material Flow and Logistics IML wooden pallets are relatively heavy, the pallet can absorb water, cannot be easily cleaned, and requires maintenance, due to deformation, production of sawdust, and corrosion of screws, this will hamper the growth of the market. By reducing the high cost of wood and by recycling wood and by managing the risk of insects and fire can counter this factor of global pallet market.

Segmentation Analysis:

The global pallet market is segmented into product type, material and end users. By product type the market is classified into Nestable, Rackable, Stackable. By material type it is classified into Wood, Plastic, Metal, Corrugated Paper, Others and by end users, it is classified into food and beverages,  Pharnaceutical and chemical, metal and machinery and construction. Region wise the global pallet market analysis is conducted across North America, Asia Pacific, Latin America, Middle East, Africa.

Regional Analysis:

Europe held a dominant position in the global pallet market and accounted for a market share of 30% in 2022. Development in the food and beverage and construction sector in Europe is a major factor driving the growth of the market in the region. Moreover, the increasing demand for pharmaceuticals and health supplements, due to the high prevalence of diseases such as obesity, diabetes, and others is expected to increase demand for plastic pallets as these pallets possess enhanced durability and are less prone to contamination.

Asia Pacific is estimated as the fastest-growing market in the global pallet market and is expected to exhibit the same trend over the forecast period. The growing industrialization and globalization in the emerging economies of the region is the major factor fueling the growth of the market. Moreover, the growth of the pharmaceutical and chemical industry has propelled the need for safer and more reliable transportation, storage, and other material handling activities, which in turn, drives the growth of the pallet market. Indian pharmaceutical sector supplies over 50% of the global demand for various vaccines, 40% of the generic demand for the US, and 25% of all medicines for the UK. According to the Indian Economic Survey 2021, the domestic market is expected to grow 3x in the next decade. India’s domestic pharmaceutical market stood at US$ 42 billion in 2021 and is likely to reach US$ 65 billion by 2024 and further expand to reach US$ 120-130 billion by 2030. In terms of overall revenue, the Indian pharmaceutical market increased by 13.9% in January 2022. India is the largest producer of vaccines worldwide, accounting for 60% of the total vaccines, as of 2021. As of August 2021, CARE Ratings expect India's pharmaceutical business to develop at an annual rate of 11% over the next two years, to reach more than US$ 60 billion in value.

Figure 1. Global Pallet Market, by Material, 2022

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Wood is the largest contributor to the manufacturing of pallets, wood has a 90% market share in the global pallet market. Most of the pallets are made from wood due to their durability, and recycling. A lot of companies are now using the recycling process to avoid the wastage of wood. Plastic and metal pallets have less demand in the global pallet market.

Figure 2. Global Pallet Market, by Region, 2022

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Global Pallet Market- Impact of Coronavirus (Covid-19) Pandemic

Covid-19 Pandemic has affected each and every industry, some undutries are affected in positive way and some are affected in negative way. E-commerce platform has changed lot of industries and demand for e-commerce platform has increased in Covid-19, People started using e-commerce for their daily needs also such as grocery, shopping, electronics equipment and especially in south Asian countries such as India, Malaysia. Rise in e-commerce platform increased supply chain. Incresed in supply chain, logistic, transportation will also increase the demand for global pallet.

Recent Developments:

In June 2022, Brambles, which is a supply chain logistics company, announced its decision not to participate in the potential transition to plastic pallets in Costco’s (Wholesale Corporation) US supply chain. Due to this it is cleared that wood pallets are high demand.

In December 2022, CABKA, a market leader in reusable transport packaging made of recycled plastic, is launching the CabCube 3.0, the next generation of its popular fordable large container. The lightweight, robust container is cost-efficient.

On March 2022, PECO Pallet, one of North America’s largest providers of pooled rental pallets, announced it has deployed MercuryGate EzVision in a major upgrade of its transportation planning and execution software platform.

On August 2022, PECO Pallet expands dedicated network with company operated Pallet management Depot in Memphis. Operation provides local retailers, grocery and beverage distributors with high-quality rental pallet resources supporting efficient product distribution and delivery.

Major Players in the Global Pallet Market:

The major players are adopting various strategies for market growth. Brambles Limited, LOSCAM, Rehrig Pacific Company, CABKA Group, PECO Pallet Inc, The Corrugated Pallet Company, Falkenhahn AG, Millwood Incorporation, Litco International Inc and Schoeller Allibert are some of the major players operating in the global pallet market.

Market Definition:

Pallet is a structural foundation that allows the storage and transportation of goods. Pallet offer several activities such as assembling and storing goods in manufacturing units and warehouses. The pallets are lifted by jacking devices such as forklifts, front loaders, pallet jacks, or cranes. The material offers an inexpensive method for handling and storage activities in various manufacturing industries.