RnR Market Research

US Pallet Market to Reach 1.9% Annually by 2.6 Billion Units to 2019

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Pune, Maharastra -- (SBWIRE) -- 09/22/2015 -- US pallet stock to reach 2.6 billion units by 2019

The total number of pallets in use in the US will increase 1.9 percent annually through 2019 to 2.6 billion units, supported by gains in US manufacturing and warehousing activity. Demand for pallets is forecast to expand 1.7 percent per year through 2019 to 1.4 billion units. When production activity and shipments fell during the 2007-2009 economic recession, pallet users had a significant number of pallets sitting idle and opted to utilize the pallets on hand to satisfy product handling requirements, purchasing pallets only when absolutely necessary. This lowered the overall quality of pallet stocks, as pallets were not repaired or replaced at normal intervals. When the economy recovered, users began to replace these pallets in disrepair with new units, resulting in pallet demand gains of nearly nine percent per annum between 2009 and 2014.

Wood to remain dominant pallet material

Wood will remain the most widely used material, comprising 84 percent of total pallet stocks in 2019 and 93 percent of the sales in unit terms. Wood strikes a balance between low cost and high durability and is suitable for use in most applications. However, because wood already accounts for such a large share of the total pallet market, opportunities for additional growth will be limited through 2019. On the other hand, materials such as plastic and metal, which account for substantially smaller shares of pallet unit demand, will record stronger market gains. Plastic is becoming particularly important in the food and beverage and pharmaceutical industries because of its resistance to biological and fungal infestation. In addition, plastic has a significantly longer lifespan than wood and can be completely recycled when taken out of service, which is an added benefit for users. Metal pallets, which make up the smallest share of pallet unit sales, will continue to be used in settings where there is a need to carry extremely heavy items or to transport products such as chemicals, which can damage other pallet materials.

New, refurbished pallets to grow at similar rates

Demand for new and refurbished pallets will grow at similar rates through 2019. This follows a 2009-2014 period that saw new pallet sales more than double from a low 2009 base, as new pallets were purchased to replace pallets in disrepair that remained in use during the economic recession. Such rapid gains will be beneficial to suppliers of refurbished pallets as many of the units that were purchased new in recent years will be repaired and resold as refurbished pallets. Further growth in the overall size of the wood pallet stock will provide additional sales opportunities for refurbished pallets.

Warehousing market to lead gains in pallet demand

Manufacturing will remain the largest user of pallets in the US, accounting for 72 percent of total pallet stock in 2019, as well as 70 percent of total unit demand. However, the warehousing and construction markets will post more rapid growth. The warehousing market will register the largest advances in unit terms due to both higher industry activity and increased use of pallet management service firms. Sales gains in the construction market will be supported by a rebound from a decadelong drop in construction spending in real terms

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Company Profiles

Profiles 42 US industry players such as CHEP (Brambles), ORBIS (Menasha), PECO Pallet, Rehrig Pacific, PalletOne, iGPS, Sonoco & Universal Forest Products

Additional Information

This study examines the US market for pallets. Pallet supply, demand, and stock are analyzed by type of material, which can be wood (lumber and engineered wood), plastics (high density polyethylene, or HDPE, and other resins), metal (steel and aluminum), and corrugated paper. Wood pallet demand is also broken out by type (new or refurbished) and design (block or stringer). In addition, pallet demand and stock are analyzed by market, with breakouts for manufacturing (chemicals, electronic products, food and beverages, machinery, metal products, transportation equipment, and other); warehousing and storage services, including pallet management services; construction; and other. The study also examines demand for the materials used to manufacture pallets (wood, plastics, metal, corrugated paper, and fasteners), and discusses regulatory, demographic, and other market environment factors. The size and growth of pallet management service revenues and pallet stock is analyzed as well.

Historical data for 2004, 2009, and 2014 and forecasts for 2019 and 2024 are provided for demand (in millions of pallets and millions of dollars at the manufacturers' level), as well as for net imports and shipments (in millions of pallets). Also provided is pallet stock (in millions of pallets) by market and material type. When calculating demand for pallets, one refurbished pallet is considered to be one-seventh of a new pallet. In analyzing demand by market, the user who places goods on the pallet is considered to be the consumer of the pallet. For example, when a manufacturer of breakfast cereal purchases a pallet to ship boxes of the cereal, this is considered to be demand by a manufacturer in the food and beverage market. However, when a pallet management firm purchases a pallet, stores it, and then leases it to a manufacturer, this is considered to be demand by a warehousing services provider.

Table of Contents

Introduction XI

I. Executive Summary 1

II. Market Environment 4
General 4
Macroeconomic Environment 5
Demographic Trends 9
Manufacturing Outlook 13
Durable Goods 17
Nondurable Goods 19
Warehousing Expenditures 20
Construction Expenditures 23
Historical Overview 26
Safety Issues 28
Environmental Issues 30
Cross-Contamination Issues 31
Bacterial Contamination 31
Phytosanitary Treatment 33
Fungal Contamination 34
Other Sources of Contamination 35
Competitive Products 37
Pricing Trends 39
Lumber 42
Other 43
Foreign Trade 44
World Market 48
Western Europe 49
Asia/Pacific 50
Other Regions 51
Pallet Management Services 53
Relationship Between Stock & Demand 55
Pallet Lifespans 57