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Predictions for the Pallet Market 2016

22 Feb 2016

The future of the humble pallet has been the centre of much discussion over the past year. There are many factors at play in the logistics market, not least of which is the underlying fear that an Uber or Airbnb style, disruption player may emerge. Cost base is also the subject of some debate with the challenges of attracting and retaining good staff.

Raw material availability and costs may well affect the industry, in addition to which are the pressures emanating from the knowledge that the logistics industry has been historically a large producer of waste. The future of logistics is thus hotly debated, with factors including the internet, standards, legislation and politics all set to have potential impact in 2016, especially in the light of the EU referendum.

Most of the discussions around pallets are common across the various types, including wood pallets, Euro, pressed wood or ISPM15. With over half a billion pallets made each year and the total in circulation fast approaching three billion, this is an issue with some momentum. Interestingly, 95 per cent of pallets are wooden which can be used as a positive counter argument in favour of the logistics industry since wood locks up carbon dioxide and is sustainable, reusable and recyclable.

Will the need for greater automation, kill the pallet?

One possibility is that greater automation will require greater precision and consistency in the dimensions and weight of pallets. It remains to be seen if this emerges as a reality and if wood will be able to meet the changing demands. It is entirely possible that due to the extensive historical use of wooden pallets, they may become a central requirement in the specification for any automated process.

With the Government in the midst of a tangible drive to increase exports, the need for ISPM15 pallets is likely to increase in line with physical shipments. The economy also appears to be set for growth which will further fuel ambient demand levels. The expectation is that none of the possible disruptors are, as yet, visible on the horizon so the demand for pallets both new and old is set to increase.

Wooden pallets are sustainable.

The price of second hand pallets continues to remain strong so we will continue to see ” wooden pallets wanted ” signs for a few years to come. Wood pallets will always have a place in the logistics process, albeit with ISPM15 conformance required for many export destinations.

The use of wooden pallets is, in fact, one of the few areas in which logistics operators can demonstrate a sustainable reusable item. As corporate social responsibility and environmental considerations become ever more entrenched in board-level discussions, we are likely to see the use of wooden pallets increase in the years to come in line with projected economic growth.

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