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

In order 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 26 workers, and generates about $4-5 million in annual revenue.

    • The wood container and pallet manufacturing industry in the US consists of about 2,300 companies with annual revenue of $10 billion and 59,900 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
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Nov 1, 2022 - Used Pallet Shortage Persists
                                  • More than half of pallet users say they have had trouble sourcing used wood pallets, according to the annual Pallet Report released in October by Peerless Research on behalf of Modern Material Handling. In a survey of warehouse and fulfillment center operators, 56% said that in 2022, fewer used pallets were available or were in short supply. About 40% said used pallet prices were higher and 44% said used pallet quality was getting worse.
                                  • New orders for US durable goods, a key driver of wood container and pallet demand, rose 0.4% in September 2022 from August, according to the US Department of Commerce. However, economists polled by The Wall Street Journal had expected a 0.7% increase. The September rise was primarily due to a 21.9% rise in nondefense aircraft and parts orders. Core durable goods orders, which removes volatile sectors including transportation and military equipment, declined by 0.7% in September. The decline in core orders was the first since February and the largest since March 2021, according to MarketWatch.
                                  • According to Pallet Enterprise, a mild recession could benefit pallet producers. Supply chain disruptions have led to global pallet shortages for both new and used pallets. Many customers that once relied on used and rented pallets have turned to buying new ones, which only increased the supply pressures on the recycled pallet market. More new pallets coming online should eventually improve the used-pallet market. However, amid high lumber costs, some pallets were engineered using less wood, lowering their overall useful lifespan. Some industry insiders believe a mild recession would reduce demand for goods, giving pallet manufacturers a break after many firms have been working overtime to meet what has sometimes been desperate demand for pallets.
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