Wood Container and Pallet Manufacturers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 2,300 wood container and pallet manufacturers in the US produce pallets, shipping crates and cases, barrels, wooden boxes, casks, and parts for wood pallets and containers. Wood pallets used for shipping is the largest product category. Companies produce new wood pallets from raw lumber or recycled wood. Companies also repair and resell used wood pallets. Wood waste from the production process, along with used pallets that cannot be repaired, are typically ground up and sold as mulch, animal bedding, or wood shavings.
Raw Material Cost and Availability
Wood container and pallet manufacturers purchase industrial lumber from saw mills for production of new products.
Pallet Pooling or Rental
To reduce costs and focus on their core business, some customers are opting to rent, rather than own, pallets.
Industry size & Structure
The average wood container and pallet manufacturer operates a single location, employs 28 workers, and generates about $6 million in annual revenue.
- The wood container and pallet manufacturing industry in the US consists of about 2,300 companies with annual revenue of $13.7 billion and 65,000 employees.
- The industry is highly fragmented: the largest 50 companies account for only 39% of industry revenue. Due to shipping costs, companies typically serve customers within 150 miles of their production facility.
- Between one and two billion wood pallets are used annually in the US for shipping goods. The majority of these pallets are used pallets.
- Firms typically manufacture new pallets and also repair and recycle used pallets. Some firms also rent pallets to customers.
- The states with the largest number of wood container and pallet manufacturing facilities are California, Pennsylvania, Ohio, Texas and Illinois.
- The largest new wood pallet manufacturer in the US is PalletOne, Inc., headquartered in Bartow, FL.
Industry Forecast
Wood Container and Pallet Manufacturers Industry Growth
Recent Developments
Oct 4, 2024 - Dockworker Strike Ends
- Thousands of US dockworkers at ports stretching from Texas to Maine ended their strike on October 23, 2024, after three days, according to The Wall Street Journal. The International Longshoreman’s Association (ILA) and port employers jointly announced a tentative agreement and that union dockworkers would return to work. The agreement extends the previous contract that expired at the end of September through January 15, 2025. Until then, the ILA and port operators will continue negotiating a new contract. Key issues include pay and dock automation. The tentative deal includes a 62% pay increase over six years. A more protracted strike could have significantly disrupted demand for wood containers and pallets.
- On a not-seasonally-adjusted basis, US manufacturers’ shipments of durable goods, a demand driver for wood containers and pallets, increased 9.2% in August 2024 from the previous month and were up 0.1% compared to August 2023. Unadjusted new orders for durable goods, a signal of future wood container and pallet demand, increased 7.5% in August from July but fell 0.5% from August 2023 levels.
- US manufacturing activity contracted in September 2024 for the 22nd consecutive month, according to the Institute for Supply Management (ISM). The ISM’s Purchasing Managers Index (PMI) in September was flat at 47.2% from the same reading in August. A reading above 50% indicates manufacturing expansion. September’s New Orders Index increased by 1.5 percentage points to 46.1%. The September Production Index rose five percentage points to 49.8%. Of the 18 manufacturing industries tracked by the ISM, only five reported growth in September: petroleum and coal products; food, beverage & tobacco products; textile mills; furniture and related products; and miscellaneous manufacturing. Industries reporting contractions in September included printing & related support activities; plastics & rubber products; wood products; apparel, leather, and allied products; transportation equipment; nonmetallic mineral products; electrical equipment, appliances, and components; paper products; machinery; chemical products; fabricated metal products; and computer and electronic products. Manufacturing activity is a leading demand driver for wood containers and pallets.
- Pallet demand has been sluggish compared to the massive highs seen during the pandemic, but some industry insiders are seeing signs of a turnaround, according to the most recent survey by PalletTrader. Most survey respondents felt that the overall pallet market had hit bottom and was poised for a rebound. However, while the consensus suggests the recycled pallet market has definitely hit bottom, the new pallet market may still have more room to fall before a recovery phase can begin. As of Q1 2024, about 13% of respondents felt pallet demand was growing, but 44% said within three months, pallet demand would be increasing.
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