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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, 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

                                  Coronavirus Update

                                  Apr 21, 2022 - Ukraine War Further Disrupts Global Wood Product Markets
                                  • Russia’s invasion of Ukraine is disrupting global wood product trade flows, especially in Europe. According to Wood Resources International, Russia, Belarus, and Ukraine exported 34 million tons of lumber in 2021, and 25% of that volume was exported to countries that have sanctioned Russia and Belarus. Europe’s timber imports from Russia and Belarus accounted for nearly 10% of the continent’s consumption in 2021. Wood certification organizations Forest Stewardship Council (FSC) and Programme for the Endorsement of Forest Certification (PEFC) have designated all timber from Russia and Belarus “conflict timber,” which cannot be used to manufacture certified products, including lumber and plywood. Even after peace returns to Europe, timber trade flows have likely been permanently altered.
                                  • Even before Russia invaded Ukraine, lumber markets were highly volatile. Lumber traded at $938 per thousand board feet on April 19, down from the record high of $1,686 per thousand board feet on May 7, 2021, but up from $454 per thousand board feet on September 15. Lumber prices have oscillated widely during the coronavirus pandemic, falling from the mid-$400s in January 2020 to $264 in late April before surging to $948 in September. The price then dropped to $495 in late October 2020 before starting a fairly steady climb to the record set on May 7, 2021. US producer prices for wood containers and pallets were up 33.8% in March 2022 compared to a year earlier.
                                  • Wooden pallets were the top choice for those who responded to a survey completed for the Modern Materials Handling 2021 Annual Pallet Report. Some 94% of respondents said that they continue to use wooden pallets despite pandemic-related price increases. About 60% said that they purchased new wood pallets in 2021, which is up from 53% in 2020. About 51% reported using more used wood pallets in 2021 compared to the previous year, up from 27% who gave the same response in 2020.
                                  • New orders for durable goods decreased 2.1% in value month over month on a seasonally adjusted basis in February 2022 but increased 11.9% in value year over year on an unadjusted basis, according to the US Census Bureau. Year-over-year comparisons may yield atypical results due to the large drop in orders during the early months of the coronavirus pandemic.
                                  • Total wholesale sales declined 0.3% in value month over month on a seasonally adjusted basis in February 2022 but rose 22% in value year over year on an unadjusted basis. The year-over-year figure may be atypical due to pandemic-related disruptions in 2020. Seasonally adjusted wholesale inventories increased 1.9% in value month over month in February 2022 and rose 21.4% in value year over year on an unadjusted basis.
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