"Global Pallet Market is anticipated to Expand with 6.74% CAGR for 2023-28: Rising Demand for Sustainable and Cost-Effective Logistics Solutions" - Bonafide Research

The pallet market is an industry that involves the manufacture, distribution, and sale of pallets, which are flat structures used for the storage and transportation of goods. Pallets are typically made of wood, plastic, metal, or other materials and are used to support and protect goods during handling and shipping. The pallet market serves a wide range of industries, including manufacturing, warehousing, and logistics. Pallets are an important part of these industries because they help to reduce the risk of product damage during transport, increase efficiency in storage and handling, and allow for the easy movement of goods. The global pallet market is a rapidly growing industry that includes the production and sale of pallets for the storage and transportation of goods. Pallets are flat structures that support and protect goods during handling and shipping, and they are widely used in industries such as manufacturing, warehousing, and logistics. The growth of the global pallet market is driven by several factors, including the increasing demand for pallets in the logistics and transportation industry, the rise of e-commerce and online retail, and the growing popularity of lightweight and eco-friendly pallets. Additionally, the growth of the manufacturing and construction industries is also driving the demand for pallets, as they are used for the storage and transportation of various materials and products. The global pallet market is a rapidly growing industry with significant potential for businesses in the industry. As demand for pallets continues to grow, companies that can innovate and offer cost-effective, sustainable, and efficient solutions is expected to have a competitive advantage.

According to the research report, “Global Pallet Market Outlook, 2028” published by Bonafide Research, the market is anticipated to reach market size of USD 97.67 Billion, increasing from USD 66.60 Billion in 2022. The market is projected to grow with 6.74% CAGR for 2023-2028. The increasing adoption of pallets for transportation use is expected to drive the market in the forecast timeframe. Also, the major transport mode for cross-border trade is through waterways (shipping), contributing to ~90% of traded goods. This, in turn, indicates that oceans provide the main transport arteries for global trade. Furthermore, according to the Organization for Economic Cooperation and Development (OECD), maritime trade volumes are set to triple by 2050 as demand for global freight increases. As supply chains have become steady globally, customers demand greater transparency regarding how products and materials move through them. So the companies are embedding RFID chips directly into pallet materials, tracking and tracing individual pallets in real-time. Pallet tracking can help businesses manage recalls and expiration dates, minimizing product loss and getting items to their end-users efficiently and cost-effectively. Agricultural companies and farmers are investing in packaging solutions that improve the storage, handling, and transportation of fresh produce. In addition to this, demand in the bakery, dairy, beverage, meat, and other food processing companies is also expected to increase, which in turn will drive the market over the forecast period.

According to the report, the Asia-Pacific region is leading the market with more than 30% market share in 2022. The Asia-Pacific market is set to witness substantial growth as a result of increased demand from domestic manufacturing. In a small minority of areas, however, there is a chance that lack of infrastructure and facilities may limit growth to a certain extent. Asia Pacific is the largest market for wood pallets attributed to the high demand from China & India for import and export of consumer goods, food product and other essentials. North America is the second largest market for wood pallets owing to the large number of local manufacturers and import from other countries. The square pallet (1100mm x 1100mm) and the rectangular pallet (1200mm x 1000mm) are the two most common pallet sizes in Asia, and ISO approves both. On the other hand, the 1200mm x 1000mm pallet is more appropriate for export from Asia-Pacific to Europe and the United States because these dimensions fit well with both regions' systems. Furthermore, the region also witnessed investment augmenting the market's growth.

In addition, the growing demand for pallets from the pharmaceutical industry is expected to make the country an attractive market in the coming years. This is also due to the rising prevalence of lifestyle disorders in the country, such as obesity and diabetes. Pallets are used in the pharmaceutical industry because they reduce product contamination. To minimize the risk of contamination and product waste, drug and dietary supplement manufacturers use pallets. On the other hand, the construction industry has an enormous need for pallets for the regular storage and transportation of building materials such as blocks, bricks and roof tiles. According to a survey, it is found that about 90% of the wooden pallets used in the construction industry are used only once and because of this, wooden pallets are an increasing problem in the construction sector. The UK construction industry alone uses around 18 million wooden pallets every year. It takes almost 6,000 hectares of forestry to produce such an enormous amount of wooden pallets, which poses a risk to forest conservation. Based on end users, the market is segmented into food & beverage, chemical, pharmaceutical & healthcare, automotive, transportation & warehousing, consumer goods & retail, engineering, agriculture, and others. Among them, the Food & Beverage segment is the market leader in 2022.

Over the forecast period, the rising manufacturing and warehousing activities in the United States and Canada are likely to spearhead the market growth. The market is anticipated to be bolstered by the increasing demand for plastic pallets from the food and beverage and pharmaceutical industry, owing to the great resistance offered to insects, fungi, and various other pathogens. The key trends in the pallet market in North America include the increasing stock levels in industries, such as agriculture, chemicals and pharmaceuticals, and construction, among others, which is propelling the demand for pallets. Meanwhile, the growing expansion of the e-commerce industry is boosting the sales of food and pharmaceutical products, which require high safety. Based on these factors, North America is calculated to be the second highest market in 2022 for pallet industry. On the other hand, the high applications in the shipping and load handling sectors are one of the major factors fueling pallet market growth in Europe. The rising demand for plastic pallets will drive the growth of the pallet market in Europe. A key factor driving the market’s growth is the rising demand for plastic pallets. The demand for plastic pallets has been increasing significantly across the globe. This is due to the numerous advantages such as low weight, durability, safety, and hygiene that plastic pallets offer over wooden pallets. But, wooden pallets are still largely used, and they occupy over 90% of the total pallet market in Europe by volume. The lightweight quality of plastic pallets makes them more pocket-friendly than the wooden counterpart in terms of transportation.

The South America pallet market is primarily driven by the growing retail and automotive sectors. On account of this, manufacturers require pallets for the safe transportation of products from one location to other. They also store several pallets in tall stacks with minimal floor space in the warehouse. Additionally, the growing construction and infrastructural activities have increased the need for pallets to offer improved efficiency of transport equipment and faster turnaround of delivery vehicles. Pallets also allow shippers to stack multiple heavy items on a single pallet to avoid damaging the products. The South America pallet market is highly fragmented, with many small and large players operating in the market. Some of the key players in the market include Brambles Limited, Jabil Packaging Solutions, Inc., PalletOne, Inc., and RM2 International SA. On the other hand, in Middle East & Africa, the growth of the market is attributed to the increasing demand for pallets in various end-use industries, the rise of e-commerce and retail activities, and the growing need for efficient and safe material handling. In the Middle East & Africa region, wooden pallets are the most commonly used type of pallets, followed by plastic and metal pallets. However, there is a growing trend towards sustainable and eco-friendly pallets, which has led to an increased demand for pallets made from recycled materials, such as recycled plastic and wood. Both region are contributing for over 11% market share in 2022.

The global pallets market is anticipated to observe substantial growth going forward on account of increasing application in food & beverage, healthcare, and other industries. In addition, the rise in population along with the growing disposable income of middle-class customers is projected to drive the demand for food & beverages, medical, and personal care products. This, in turn, is anticipated to lead to a consequent increase in demand for the pallets market. Moreover, governments globally are focusing on the development of the manufacturing sector in order to increase the global economy. For example, the ‘Made in China 2025’ initiative by the Chinese government and the ‘Make in India’ initiative by the Indian government have positively propelled the manufacturing sector. The upsurge in manufacturing activities has stimulated the demand for a variety of plastic components as well as packaging solutions, thus providing remunerative opportunities for the pallets market. Also, disposable plastic pallets are widely used in the F&B industry as they are resistant to organic and inorganic chemicals at normal temperatures.

Based on types, the market is segmented into rackable pallets, nestable pallets, stackable pallets and others. A stackable pallet, unlike a nestable pallet, has a solid platform as its base. These pallets are usually stacked upon each other while being returned to the source. Stackable pallets provide maximum stability to the loaded goods due to their structure, making them a preferred pallet choice for transporting goods over longer distances. The design of stackable pallets is sturdier than rackable pallets; thus, these are often used in heavy-duty applications. In the automobile industry, heavier pallets are preferred due to the frequent handling and transportation of heavier components from the suppliers’ facilities to automobile assembly facilities. The steady expansion of automobile and heavy metal manufacturing industries is expected to impact favorably on demand for stackable pallets over the forecast period. The market is moderately fragmented with the presence of several small and medium-sized companies. Companies are increasingly manufacturing pallets from recycled plastic. CABKA Group, a Germany-based pallet company, manufactures its entire pallet portfolio from recycled plastic. For this, the company collects waste plastic from other companies, households, and municipalities.

Covid-19 Impacts:
The outbreak of the COVID-19 pandemic has negatively affected the international trade and manufacturing supply chains, which affected the demand for pallets. Furthermore, during the outbreak of the COVID-19 pandemic, construction, manufacturing, hotel, and tourism industries were majorly affected. Manufacturing activities were halted or restricted. Construction and transportation activities, along with their supply chains, were hampered on a global level. This led to decline in manufacturing of pallets as well as their demand in the market, thereby restraining the growth of the market. Conversely, industries are gradually resuming their regular manufacturing and services. This is expected to lead to re-initiation of pallets market companies at their full-scale capacities, which is likely to help the market to recover by end of 2021.