LONDON--(BUSINESS WIRE)--According to the latest market study released by Technavio, the pallet market in Europe is expected to grow at a CAGR of more than 5% during the forecast period.
This research report titled ‘Pallet Market in Europe 2016-2020’ provides an in-depth analysis of the market in terms of revenue and emerging market trends. This market research report also includes an up to date analysis and forecasts for various market segments and all geographical regions.
A pallet is a flat panel that serves as a base for storing and transporting raw materials and finished products. It is designed to be lifted by forklifts and pallet jacks. The use of palletized storage and transportation is one of the key considerations in modern logistics as it enables operational efficiency in terms of material handling.
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The report categorizes the global pallet market in Europe market into three major end-user segments. They are:
- Manufacturing sector
- Retail sector
- Transportation and warehousing sector
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Manufacturing sector
The manufacturing sector requires pallets for the transportation of processed materials within inventory houses and the safe delivery of products to distribution centers. According to Sharan Raj, a lead analyst at Technavio for warehouse and storage research, “This sector accounts for more than two-thirds of the EU's exports and thus is a major customer segment of the pallet industry.”
The recovery of the manufacturing sector in Europe and the projected economic expansion worldwide are expected to increase the demand for the material transport sector. As of August 2014, Europe's Purchasing Managers' Index (PMI) was 51.8 (a PMI > 50 indicates expansion). It is further expected to increase during the forecast period. To meet the high level of manufacturing and transportation needs, the demand for pallets will also increase. Procurement and supply chain activities are poised to benefit with an increase in industrial and manufacturing output. Investments in the market depend on downstream demand from manufacturers, which is determined by industrial production and business confidence in the economy.
Retail sector
The retail sector is the second major end-user of pallets. Most retailers receive shipments and stack their inventory in warehouses on pallets. This sector adopts pallet leasing and pallet pooling as the major strategies for their pallet needs. The retail sector suffered a downturn during the economic recession of 2008. However, with economic recovery, retail consumption is expected to increase. This will increase the volume of consumer and durable goods transported. As the demand for pallets is directly proportional to the volume of consumer and durable goods transported, the demand for pallets in this sector will also increase.
The retail sector primarily uses wooden pallets. This is because plastic pallets are costly, and as most pallets are not returned to the distributors in this sector, the retail sector avoids bearing the cost.
Transportation and warehousing sector
The transportation and warehousing sector is one of the important end-users of pallets in Europe. Transportation and warehousing involve the delivery and storage of inventory, supplies, raw materials, and other goods. The logistics companies involved in the transportation and warehousing sector partner with pallet companies to procure pallets to ship products and return pallets to manufacturers once the shipment is delivered.
Exports from countries in the EU were valued at more than USD 180 billion in February 2015. The pharmaceutical, food, and manufacturing sectors contributed the maximum revenue to the pallet market. Exports from countries in the EU increased by 1.3% in 2014 and were valued at more than USD 6 trillion.
A rise in exports and shipments in Europe will require producers to add pallets to their existing stocks to handle the high output. “Manufacturers are outsourcing logistics to third-party suppliers to reduce shipping costs while improving services. This is a viable opportunity for pallet companies to expand their existing logistics services. As companies are focusing on making supply chains lean, venturing into these types of services will prove profitable for pallet companies,” says Sharan.
The top vendors highlighted by Technavio’s transportation and logistics research analysts in this report are:
- CHEP
- PGS Group
- Rehrig Pacific
- Schoeller Allibert
- SSI SCHAEFER
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