Growing Emphasis on Automation Processes and Use of New Technologies to Impact the Global Pallet Market Through 2020, Reports Technavio

LONDON--()--Technavio’s latest report on the global pallet market provides an analysis on the most important trends expected to impact the market outlook from 2016-2020. Technavio defines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.

The top four emerging trends driving the global pallet market according to Technavio transportation and logistics research analysts are:

  • Greater emphasis on automation processes and use of new technologies
  • Vertical integration by companies
  • Growing preference for block pallets
  • Rise in power of pallet pooling companies

Greater emphasis on automation processes and use of new technologies

Pallet manufacturers rely on automation to boost productivity and raise the capacity of their manufacturing plants. Loading and unloading pallets manually is time-consuming and expensive, whereas automated processes are economical and efficient. Pallet manufacturers are incorporating sophisticated logistic systems to improve their services. Ongweoweh is one of the first independent pallet companies to develop tracking software to provide customers with information regarding the pallet movement.

According to Sharan Raj, a lead analyst at Technavio for research on warehouse and storage, “Vendors are incorporating tracking technology in pallets, which is driven by the increased need for food safety as they travel through the product distribution system. This has also led to an increase in the use of plastic pallets due to the advantage of shipping on plastic pallets, where new tracking technologies can be easily planted on them as compared to other pallets.”

Vertical integration by companies

The demand for lumber used for manufacturing pallets is high in the construction and furniture industries. Sawmills are unable to meet the growing demand. As a result of the shortage of lumber in the market, pallet manufacturers find it difficult to complete their orders. Therefore, the supply of raw materials to pallet manufacturers has been adversely affected.

“Pallet manufacturers such as Arrington Lumber and Pallet and Associated Pallet are vertically integrating and investing in logging and sawmills. This enables them to offer high-quality pallets at an economical price. R&E Pallets added a Baker Products processing line to secure raw material supply and boost its production,” says Sharan.

Growing preference for block pallets

Large retailers are shifting to block pallets over stringer pallets. Consequently, manufacturers are expected to focus on manufacturing block pallets. Block pallets are expected to account for a large proportion of the market by 2019. Costco and Walmart, two leading retailers in the US, announced their preference for block pallets. This trend is aiding the growth of large pallet poolers such as CHEP and PECO, which only deals in block pallets, and puts small, family-owned, or independent producers in pressure who manufacture stringer pallets.

Rise in power of pallet pooling companies

Pallet rental pools have a significant hold over the pallet market. Walmart and Costco have announced that they will accept pallets only from three large pooling companies. This has had an industry-wide impact and intensified competition in the market. Small firms will have to adapt to the changing business environment and enhance their product specifications to meet the trends in the industry to compete in the market. CHEP alone held 58% of the market share in pallet pooling operations in North America in 2014.

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Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.

Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.

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Contacts

Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 630 333 9501
UK: +44 208 123 1770
www.technavio.com

Release Summary

Technavio’s latest report on the global pallet market provides an analysis on the most important trends expected to impact the market outlook from 2016-2020.

Contacts

Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 630 333 9501
UK: +44 208 123 1770
www.technavio.com