Pallets – the unsung heroes of the manufacturing and product handling worlds – help store and move products efficiently and keep them secure between stops in the supply chain. For plastics manufacturers, they represent a significant opportunity.
Depending on who you ask, wooden pallets have been on their way out for a while. Even so, many manufacturers and other companies remain committed to the wasteful cycle of buying and refurbishing low-cost wooden pallets, and tolerating their many shortcomings.
The rise of plastic pallets was perhaps inevitable, but plastics players can do more to seize this market growth, boost their own success, and add value to critical industries and supply chains.
The market outlook for plastic pallets
The global pallet market shipped a total of 6.87 billion units in 2018, including wood, plastic and metal pallet varieties. On its own, the global plastic pallet market is set for an eight per cent CAGR between 2020 and 2024. This is significantly higher than the 4.87% CAGR predicted for the global pallet industry as a whole, according to a report titled “Plastic Pallets Market by Material and Geography” by Infiniti Research.
Another report, 430 million plastic pallet units sold in 2018, shows an expected CAGR of 3.5% between 2019 and 2027.
These reports note the increased use of digital technologies in manufacturing, material handling and other traditionally ‘analogue’ businesses as a big reason why plastic pallet demand is rising.
One of the chief benefits of plastic pallets is their longevity. With longer-lasting pallets at their disposal, more and more companies are integrating RFID tags and other identifiers to make product staging and handling more efficient and visible processes.
Demand for plastic pallets is on the upswing for ecological reasons, too. Companies everywhere are discovering the benefits of reducing their carbon footprints. One way to do this is through the more widespread use of longer-lasting pallets constructed from post-consumer recycled materials.
From improving the bottom line to carving off big chunks of our collective carbon output, plastics manufacturers have a lot to offer at this important moment.
The opportunity for plastic manufacturers
According to a 360 Market Updates Report for 2017-2022, plastic pallets provide the following primary benefits for the companies that use them:
Lightweight: Plastic pallets are around 30 per cent lighter than wooden pallets, making them easier to transport.
- Durable: Compared to wood pallets, plastic pallets are 42 per cent more durable, meaning they last substantially longer and shrug off impacts that could splinter a wooden pallet.
- Cost-effective to ship: Plastic pallets can be 50 per cent less expensive to ship than wooden pallets.
Plastics manufacturers have a significant opportunity to communicate these advantages and seize this market growth. Peerless Research Group and Modern Materials Handling conducted a survey of professionals and published a report to uncover where and how pallets see the most significant use. Their findings reveal pain points across multiple industries and opportunities for plastics manufacturers to expand their offerings and address process bottlenecks.
The survey respondents came from the following industries and positions of leadership:
- Supervisors or process managers (37%)
- General managers and department leaders (24%)
- Engineers (11%)
- CEOs and company presidents (10%)
- Food processing and handling (10%)
- Consumer goods manufacturing (8%)
- Chemical manufacturing (5%)
- Beverage manufacturing (3%)
- Aerospace manufacturing (2%)
This is a diverse lineup, but the report shows common needs and opportunities throughout the US economy. The plastics industry is in a great position to address these needs.
One of the report’s authors, Laszlo Horvath, representing the Center for Packaging and Unit Load Design at Virginia Tech University, says the time of the cheap recycled wooden pallet is effectively over: “A lot of companies were concerned that the pallets they were using weren’t designed for use on certain equipment. [And] we’re at a point where you can’t repair them multiple times anymore, so they get sent to the landfill.”
Horvath says that the proliferation of automated equipment is one of the key factors here. The Peerless and MMH report showed that 23 per cent of storage equipment, 33 per cent of material handling equipment and 23 per cent of palletising and depalletising equipment involves ‘automated’ or ‘semi-automated’ processes. Manual operations still represent the lion’s share of industrial activities involving pallets, but this ratio is shifting rapidly.
Wooden pallet manufacturers design their products with low costs in mind. When they’re too damaged to be useful, they’re refurbished and reused (or resold). When they become more ragged still, they’re discarded.
Plastics manufacturers are positioning themselves as a logical and value-adding alternative – and must continue thus. The demand for hardwood lumber is growing due to the paper, flooring, frame stock and rail ties industries. This demand from outside the pallet industry has hamstrung the availability of wooden pallets while simultaneously raising the price of raw materials.
How plastic manufacturers can position themselves for growth
It’s well-observed that plastic pallets last longer than wooden pallets, and those made from HDPE and PP are superior in a wide range of speciality industries, too, because they:
Cause less wear and tear on material handling equipment and storage systems. The products stored on pallets stand less of a chance of sustaining damage.
- Provide protection against insects and fungi as well as pathogens such as Listeria, E. coli, Salmonella and others. The timing is significant, as product recalls happen today with greater frequency than ever.
- Provide floor space savings for manufacturers and material handling companies because they’re typically easier to stack, store or nest efficiently, whether empty or laden with products.
- Help keep industrial spaces clean. Wooden pallets can break and leave nails and screws on the floor, creating safety hazards.
These are clear advantages, but plastics manufacturers need to know how to communicate them effectively. Most pallets in use today are made from hardwood. To return to Horvath and the Peerless/MMH report, companies use these products because they’re cheaper on day one. The cost savings over time and the process improvements they bring are a little less obvious, and it’s something that plastic companies everywhere can seize on.
Professionals in a wide range of industries, recognising that wooden pallets are on their way out, are calling for new standards and alternatives. According to the Peerless and MMH research, plastic companies need to do several things to ensure their continued success.
One is to design plastic pallets for compatibility with a wider range of emerging automation equipment standards. Plastic pallets improve upon wooden alternatives because they’re less likely to shed nails and boards while being moved. But not every plastics manufacturer designs their pallets with modern racking and material handling systems in mind. Incorporating (or making it easier to incorporate) RFID tags and other in-demand technology should be another point of interest.
Over time, plastics companies will need to find even more eco-friendly plastic alternatives if they want to finish wooden pallets off. HDPE and PP are recyclable, but new manufacturing techniques like 3D printing will bring new material-saving designs and even more environmentally friendly materials, such as PLA.
We’re a few years away from mass-producing plastic pallets by 3D printer, but the potential is there – as is the demand for plastic pallets and the proof that making the switch makes good business sense.
Megan R. Nichols is a technical writer who covers industrial topics for sites such as Delmia, Thomas and ReadWrite. Keep up with Megan by following her on Twitter and subscribing to her blog.
