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
Jun 3, 2024 - Steady, Moderate Industry Growth
- The wood container and pallet manufacturing industry is expected to experience higher sales growth in 2024 after a softening of demand in 2023. The industry’s year-over-year sales growth increased by 10.2% in 2022 before falling to 1.3% growth in 2023, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales are projected to rise 2.7% in 2024 and 4.2% in 2025, then see moderate average annual growth of about 4.8% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
- Global shipping container volumes in the first quarter of 2024 increased 9.2% compared to the same period in 2023, according to Container Trade Statistics (CTS), an affiliate of the non-profit World Liner Data Limited, whose members include the world’s largest container shipping lines. In Q1, container volumes reached more than 45.5 million twenty-foot equivalent units (TEUs), which marked the largest year-over-year gain in 11 quarters. US container volumes in the first quarter of 2024 reached more than 8.1 million TEUs (68% imports and 32% exports), up 14.1% over Q1 2023 and 1.3% higher than Q4 2023. Shipping container traffic is a leading indicator of pallet demand.
- US manufacturing activity contracted in May for the second consecutive month and for the 18th time in the last 19 months, according to the Institute for Supply Management (ISM). The ISM’s Purchasing Managers Index (PMI) in May dropped to 48.7% from a reading of 49.2% in April. A reading above 50% indicates manufacturing expansion. May’s New Orders Index decreased by 3.7 percentage points to 45.4%. The May Production Index fell 1.1 percentage points to 50.2%. Of the 18 manufacturing industries tracked by the ISM, only seven reported growth in May: printing & related support activities; petroleum and coal products; paper products; textile mills; primary metals, fabricated metal products, and chemical products. Industries reporting contractions in May included wood products (which includes wood containers and pallets), plastics & rubber products, computer and electronic products, furniture and related products, transportation equipment, and food, beverage & tobacco products. Manufacturing activity is a key demand driver for wood containers and pallets.
- The recent shuttering of a regional hardwood lumber producer highlights the importance of pallet makers maintaining a diverse network of suppliers, according to Pallet Enterprise. In February 2023, West Virginia-based hardwood supplier Allegheny Wood Products ceased all operations after it failed to attract a buyer. The closure came amid mounting challenges in the overall hardwood sector, including weak sales, reduced export demand, low lumber prices, regulatory hurdles, and high operational costs, including those needed for sawmill modernization. Some lumber industry watchers suggest these headwinds could signal further contraction in the hardwood sector.
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