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 27 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 62,700 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

                                  Apr 2, 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 and some solid gains in the years after the onset of the pandemic. The industry’s year-over-year sales rose 1.9% in 2020, 33.2% in 2021, and 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, then see moderate average annual growth of about 4.6% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
                                  • 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.
                                  • US manufacturing activity expanded in March 2023 after contracting for 16 consecutive months, according to the Institute for Supply Management (ISM). The ISM’s Purchasing Managers Index (PMI) in March rose to 50.3% from a reading of 47.8% in February. A reading above 50% indicates manufacturing expansion. March’s New Orders Index increased by 2.5 percentage points to 51.4%. The March Production Index rose 6.2 percentage points to 54.6%. Of the 18 manufacturing industries tracked by the ISM, nine reported growth in March: textile mills; nonmetallic mineral products; paper products; petroleum and coal products; primary metals; food, beverage & tobacco products; fabricated metal products; chemical products; and transportation equipment. Industries reporting contractions in March included furniture and related products; plastics & rubber products; electrical equipment, appliances, and components; machinery; computer and electronic products; and miscellaneous manufacturing. The industries that were unchanged in March were wood products, printing & related support activities, and apparel, leather, and allied products.
                                  • Pallet Enterprise’s 2023 Human Resources & Wage Survey suggests pallet companies are under increased pressure from wage growth. To attract and retain workers amid a general labor shortage and increased pallet demand during the pandemic, pallet firms had to increase wages substantially. Between the 2022/2023 survey and the previous one covering 2019/2020, pallet industry wages rose by 235 to 47%, depending on job description. The wage jump was the largest since the Human Resources & Wage Survey began in the early 2000s.
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