Pallets: One Size Fits Nobody

According to a new study by the Fredonia Group, the U.S. demand for pallets will reach 1.5 billion units in 2012. Pallets made from wood will remain dominant. That demand for pallets is forecast to grow about 2% annually through 2012. “Pallets,” a new industry study, presents historical demand data, along with forecasts for 2012 and 2017 by material, product and market. In addition, the study also assesses market environment factors, evaluates company market share and profiles 39 competitors in the U.S.

Pallets made from wood—primarily lumber—will continue to account for a dominant share of the market, while plastic pallets will experience the fastest gains in demand.

The demand for plastic pallets is projected to rise nearly 5% per year, to more than 50 million pallets in 2012. Pallet users are opting for plastic pallets due to their durability. Plastic pallets are easy to clean and meet U.S. and international phytosanitary requirements for shipping, making them ideal for product shippers with neither the time nor resources to sterilize pallets continually. Plastic pallets can last a long time without time-consuming repairs and can be easily recycled once they have reached the end of their product lifespan. Additionally, plastic pallets can possess sufficient strength, despite weighing much less than those made from other materials, an important consideration to value-conscious, long-distance shippers.

Where Would We be Without Wood?
Wood pallets are forecast to account for almost 90% of the market in 2012. However, demand for wood pallets is projected to rise at a rate just below that of the market average. Demand gains will be restrained by the growth of pallet refurbishing services, which repair distressed pallets by removing damaged deck boards, blocks and stringers and replacing them with new components.

These services prolong the lifespan of existing pallets, reducing demand for new units. Environmental concerns about the waste generated by pallets will also drive continued use of pallet refurbishing, as users seek to reduce the environmental impact of pallet consumption by trying to reuse and refit pallets, rather than disposing of them at the earliest opportunity.

In terms of end use, manufacturers will continue to account for the largest share of demand for new pallets, totaling 77% of the market in 2012. However, providers of warehousing and other storage services will post the most rapid gains in pallet demand, rising about 6% per year through 2012. These companies, which manage pallets and coordinate the shipping and handling of materials from original manufacturer to end user, will need new pallets to expand their operations and more effectively serve existing customers. These firms serve as third-party storage and shipping agents for manufactured goods. They rely on prompt and efficient delivery of pallets to maximize their profits and will need large stocks of them to meet demand for their services.

Any discussion of the simple pallet is not simple. While any pallet might fit your shipping requirements, not just any pallet is the right choice. Asked what is the perfect pallet, most experts in the pallet business will respond, “it depends.”

The first thing to consider is what you plan to ship. Certainly, the weight of the product and the size of the cartons will dictate the dimensions of the pallet. As with other transport packaging decisions, knowing the environment through which the product will travel is essential to making the right pallet decision. The pallet is the interface between the product and the mode of transportation. Knowing what kinds of vehicles will be moving the pallet load will play a major role in its selection.

Other Material
Pallet selection is not just about plastic and wood. Presswood pallets are particularly attractive for shipping overseas when you know you’ll never see the pallet again, and you have to meet the stringent international phytosanitary regulations. These pallets are molded from a mixture of wood fiber and synthetic resins, making them versatile and economical.

Metal, particularly aluminum, pallets have been around for a long time. They’re most useful when shipping specialty items, such as motorcycles or when combined with custom-made containers and racks.

Online calculators are becoming increasingly popular, with suppliers eager to make the business case for their greener products. So it is with pallets. iGPS (Orlando, Fla.), a maker of plastic pallets with embedded RFID chips, is selling potential clients on the green benefits of its new plastic shipping pallets with a free online calculator that shows exactly how much fuel they’ll save by ditching the wood pallets.

Basing its calculations on data from the U.S. EPA, the free online tool estimates total annual reductions in shipping weight (and associated fuel costs and greenhouse gas emissions) clients would achieve using iGPS’ lighter plastic pallets. The calculator is available at www.igps.net.

At the Web site for CHEP (Orlando, Fla., www.chep.com), the world’s largest pallet pooling company, you can find a calculator that shows the benefits of pallet pooling in general and its pallets in particular.

With the numerous factors involved in making the right pallet choice, many companies and educational institutions are attempting to do life-cycle assessments of one material versus another and one approach to unit load management versus another.

A recent study from Environmental Resources Management, retained by iGPS, does a comparative assessment of three types of pallets common in the North American market: single-use wooden pallets; pooled, or multi-use, wooden pallets; and iGPS plastic pallets.

Its conclusion is that “the iGPS pallet has lower environmental impacts in all impact categories, compared with the typical pooled wooden pallet, and a substantially smaller environmental footprint than the single-use pallet.”