Global Pallets

Global Pallets

Global demand for pallets is forecast to increase 4.0% per year to 6.9 billion units in 2028, valued at $83.6 billion. Growth will be driven by rising manufacturing activity and the expansion of associated logistics networks worldwide. The pace of gains will improve relative to the 2018-2023 period, with economies continuing to strengthen as the impact of the COVID-19 pandemic fades.

End of Pandemic Era Shifting Priorities for Pallet Manufacturers

The 2020-2023 period was marked by extreme volatility associated with the COVID-19 pandemic and related supply chain disruption. During this span, suppliers were challenged by elevated production costs, insufficient materials supply to meet demand, and high volatility in end markets. This led to issues with pallet shortages that posed challenges for all segments of the industry, including pallet manufacturers, pallet refurbishers, and pallet poolers. Navigating this fast-changing environment represented the key strategic priority for pallet producers.

Pallet shortages continued into 2023, but, by the end of the year, market conditions had largely normalized. Materials prices were down from their peaks, supply chains were more robust, and end markets were reaching the close of the short-term pandemic recovery period. As a result, priorities for pallet manufacturers are shifting going forward, and strategies are shifting toward addressing longer term trends facing the industry.

Efforts to Address Sustainability Concerns Reshaping Markets

Sustainability represents a critical topic across industries, and the environmental impact of pallets is receiving increasing attention among all end markets. While wood pallets are a fairly environmentally friendly product in their own right, plastic pallets are increasingly preferred in this regard, and these are expected to gain market share going forward.

However, supply chain practices can have a greater impact on sustainability than the specific material used. In order to achieve their promised sustainability benefits, plastic pallets must have a high rate of end-of-life recapture for materials reuse. As a result, plastic pallet manufacturers are increasingly incentivized to step up their participation in their customers’ supply chains. A growing number of plastic pallet manufacturers are developing business areas like pallet rentals and supply chain optimization services, once mainly the purview of pallet management services firms. Going forward, the ability to provide such services will represent a key advantage for pallet suppliers looking to compete on sustainability.

Further Opportunities for Smart Pallets

With attention to supply chains increasing, pallet providers are finding expanded opportunities to offer value-added services with smart pallets, which can track the movement of goods to reduce waste and optimize distribution. However, the sensors used for smart pallets are best installed at the point of manufacture, and the historical fragmentation and commoditization of pallets represents an obstacle to large-scale deployment. In order to develop the smart pallet market, greater collaboration will be required between pallet manufacturers, pallet poolers, and smart technology suppliers.

This Freedonia industry study analyzes the 5.7 billion unit global pallets industry. It presents historical demand data (2013, 2018, and 2023) and forecasts (2028 and 2033) by material (wood, plastic, corrugated and molded pulp, metal) and market (food and beverage manufacturing, other manufacturing, warehousing, construction and other), and region (North America, Central and South America, Western Europe, Eastern Europe, Asia/Pacific, Africa/Mideast. Historical data are provided for 2013, 2018, and 2023 for demand, production, and net exports, with forecasts for 2028 and 2033. Historical market volatility is also addressed. In addition, annual historical and forecast data are provided from 2020 to 2027. Data are provided in unit terms. Pallet demand and pricing in US dollar terms is also addressed. The study also evaluates company market share and competitive analysis on industry competitors including Cabka, Foresco Packaging, PGS Group, Rehrig Pacific, and UFP Industries.