Industrial packaging: Pallets galore

A year or so ago, my colleague Noel Bodenburg noticed that our readers seem to love pallet stories.“Who knew,” as Noel likes to say. After all, people seem to hate pallets, or at least hate having to use them. They’re one of those necessary evils of the supply chain. But whenever we ran a pallet story online, she noticed the hits to the website just kept on coming.

That’s one of the reasons we’re going to launch a monthly pallet newsletter, beginning next week. I got the idea after visiting with CHEP, IFCO, PECO and iGPS at the North American show in Cleveland in April. Now, it won’t be all wooden pallets all the time - in the first edition, I’ll also write about plastic and metal pallets and in subsequent months I’ll look at alternative pallets, like pallets made from paper and composite materials. And it won’t be all pallets all the time. We’ll also write about the products that complement and extend the pallet - everything from palletizing on the front end to totes, containers, dunnage and stretch and shrink wrap on the back end. Basically, everything that goes into creating the optimal unit load to get your product from point a to point b. 

This week, however, I’ve been talking to manufacturers of wood, plastic and steel pallets. While wood is still king of the pallet hill, I was struck by two things.

First, while plastic is still probably no more than 10% of the pallet market, plastic pallets are making inroads. There are several factors driving end users to convert from wood to plastic, but by all accounts, the most significant has been the plastic pallet pool developed by iGPS. Plastic pallet makers credited the company with bringing new users into the market, and both wood and metal pallet makers grudgingly tipped their hat to the impact iGPS is having. Can they grow the market for plastic significantly beyond where it stands today? It’s hard to say. Plastic works best in an environment where you can track and retrieve the pallets, and even if the market doubles, plastic would still account for just 20% of the market. But there’s no question that iGPS has opened doors for plastic that didn’t exist in the past.

Second, used pallets now dominate the wooden pallet market. While no one has hard data, Bruce Scholnick, president of the National Wooden Pallet and Container Association, estimates that right now, used and reconditioned pallets are accounting for about 70% of the market for wood. “It’s where the growth of our association is coming from,” he told me. That’s a significant change of events from twenty or so years ago, when used pallets were a very small slice of the market, and few used pallet manufacturers were members of NWPCA.

I’ll be writing more about these topics next week. Keep an eye out for the first stories, and let us know how you’re using pallets and industrial packaging in your operations today.

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