New Technological Developments to Drive the Demand for Pallets
To minimize manual handling of products, companies are increasingly using pallets throughout the supply chain process. Companies are using pallets for internal use such as product storage and display and also while transferring goods from factory to retail stores. Plastic pallets are being largely used by companies as compared to wooden pallets due to the reduced costs related to its maintenance, storage and repair. Moreover, plastic pallets have long life span and offer resistance and reliability.
According to the report by Future Market Insights (FMI), the global pallet pooling (rental) market is anticipated to reach $1,400 million by the end of 2027. The market is also expected to register 6.6% CAGR between 2017 and 2027. The government in various countries are also introducing regulations associated with hygiene issues in pharmaceuticals, this is driving the demand for highly durable and good quality of pallets. Rental pallets are also gaining popularity. Rental companies offer a regular quality check to avoid any damage, thereby reducing costs for companies. Moreover, the rise in demand for plastic pallets is expected by various industries such as pharmaceuticals, food & beverages and FMCG to meet hygiene requirements.
Emerging technologies to create new market potential for pallets
In order to comply with various industry requirements, companies are using innovative technologies while developing pallets. Allowing easy movement of large containers and other products, more advanced pallets are being introduced that are reusable and also include tracking devices.
Many companies are also applying coatings to improve the durability of pallets. For instance, Ahrma Holding B.V., a Dutch start-up company is using new polyurethane coating to enhance the durability of its hybrid pallets made using plastic and Medium Density Fiberboard (MDF). These pallets are 25% lighter compared to wooden pallets and can last significantly longer, up to 10 years. These pallets also include Supply Chain Big Data (SCBD) and integrated transponder to track the location of pallets, their load state and ambient temperature.
Major companies are also using Radio Frequency Identification (RFID) technology to track pallets and containers. However, with the rapid rise of Internet of Things (IoT) technology, companies are understanding the value proposition of asset visibility, hence, this technology is becoming popular in pallets market as well. Moreover, these technologies are easier and cheaper to deploy compared to RFID solutions.
RM2, a composite pallet manufacturer and rental provider is offering Electronic Link to the Internet of Things (ELIoT) in its pallet in partnership with AT&T. This is helping companies to analyze a large amount of data in their supply chain management at the pallet level. RM2 is also planning to include RFID tags with custom built LTE-M unit.
Companies involved in wooden pallet manufacturing are also investing heavily to improve their product and enhance capacity. For example, Leading Enterprise in Advance Pooling (LEAP) India, a supply chain solution company is planning to raise 100 crore to enhance the capacity of its wooden pallets and geographic reach. The company is also using its in-house software MyLeap to track the movement of pallets.
The main reason why wooden pallets are still considered by various companies is because the plastic pallets are strongly affected by the change in climatic conditions, whereas this is not the case with wooden pallets. However, some of the environmental groups have called for a replacement of wooden pallets with more eco-friendly alternative and have also marked wooden pallets as a major waste of resources.