Wooden Pallets Market Intelligence

Industry Outlook & Drivers

Wooden Pallets Global Market Outlook

The wooden pallets market is expected to have a growth rate of 4-5 percent until 2024 and reach $6.1 billion in 2024

• They are the one of the most predominantly used packaging solutions for transportation and storage of goods, with application across industries due to their ease in material handling solutions

Wooden pallets would continue as a preferred choice in transportation and storage particularly with small and medium manufacturing sector as compared to other alternatives such as plastic, metal or corrugates

• Owing to the advantages of wooden pallets like easy availability, cost effectiveness, low switching cost are expected to continue dominating pallets market in the next five years. Pallet pooling is increasingly being adopted by top CPG companies to help them in easy access to pallets and better pallet management
• Increasing demand from end –use manufacturing industries, food and beverage product transportation are the key drivers for pallets market 

Global Trade Dynamics – Wooden Pallets

Wooden Pallet export, import trade traffic has been stable in 2019, growing marginally at 1–2 percent compared to 2018. The major importing region was Europe contributing to more than 30 percent of the imports. The labor intensive Wooden Pallet manufacturing process has led to buyers opting for low-cost labor countries, like Poland, Belarus, Czech Republic for their Wooden Pallet requirements, making Europe the best sourcing location and the largest exporter

North America

• US demand is largely met by Canada making the trade a regional activity for pallets. However, exports of standard pallets is increasing steadily

Europe

• Germany, France and Belgium serve as the highest importers for pallets across the world owing to high demand in the region. Eastern European countries are largest exporters with access to lumber and wood

Asia

• APAC is pioneer in export of low cost wood from south east Asian countries such as Malaysia, Thailand and Cambodia.

LATAM

• Mexico was the third largest importer in 2019 contributing to about 6 percent of the overall imports. High import duties in Brazil have reduced Brazilian imports. They have more than doubled their export quantities in 2018.

Industry Drivers and Constraints

Drivers

• Advantages in Bulk goods transportation: Wooden Pallets are cost effective, efficient for load handling, easy to handle, and resistant to chemicals. Standardized pallets are easier in loading and unloading goods on a truck and can be easily handled with forklifts etc.
• End-use Industries: Apart from demand from the food and beverage industry, which is set to grow significantly in APAC, other major end-use segments, like chemicals, pharmaceutical, construction, metals and mining, etc., are increasingly adopting wooden pallets due to benefits, like low cost and more convenient handling
• Low weight alternatives: As part of sustainability options, pallet pooling, pallets made of processed wood and paper are increasingly being adopted to reduce carbon footprint and overall sustainability targets

 Constraints

• Raw Material Capacity Crunch: Restrictions across the regions in sourcing of lumber for wooden pallets from the forest registries create supply constraints and increase in raw material prices
• Labor Intensive Process: Labor cost contributes to 8-11 percent of the total Wooden Pallet cost, which discourages bulk packaging manufacturers in developed regions with high labor costs to enter the Wooden Pallet segment. Shift to automation is capital intensive
• Limited Innovation: Scope of innovation is limited in wooden pallets as it is a fairly simple manufacturing process. However, lightweight, composite pallets are entering the market as part of innovations