2016 Forecast and State of the Pallet Industry

The anticipation of more shipping traffic to the eastern United States and the steady rise in domestic factory production promise a positive outlook for the pallet market in 2016.

According to IBISWorld, the pallet market generates $8 billion dollars in revenue from 2,270 businesses nationwide at an average annual growth rate of 2.4 percent – which comes from the steadily increasing warehousing demands due to the U.S. rise in industrial production.

But, there are a few growing trends on the horizon which can shift the pallet market even more – creating a lot of opportunity for pallet recyclers like Nazareth Pallet Company.

The Latest Data

Lumber Pricing

New lumber pricing is down overall allowing combo remanufactured pallets to be the best choice for custom size pallet users and those who need a high quality 48×40 shipping platform.

Pallet Demand

Similar to 2015, pallet demand and core shortages will continue into the foreseeable future.

China’s Economy

China’s demand for pallets will vary. A report from Technavio analysts recently explained that the Chinese pallet market growth has increased at a compound annual growth rate of 10.62 percent since last year. They expect this trend to continue until 2019.

China’s economy may be slowing down, though, since Bloomberg points out that their “annual gross domestic product growth rate dipped below seven percent in the third quarter of 2015 for the first time since the 2008 financial crisis.” Without a strong demand for Chinese exports, the pallet markets of their business partners will also shift to a rise in domestic pallet production. This shift should boost a gradual expansion of warehousing companies throughout North America.

Panama Canal

New Panama Canal system upgrades will boost international trade. In April of 2016, the third set of locks in the Panama Canal will finally open. This breakthrough paves the way for ships almost three times the size of current ships to transport more cargo to every major U.S. dock from Houston to New York. Since enhanced global trading profoundly impacts pallet distribution and demand, the East Coast is sure to see a greater market for shipping pallets.

Sustainable Forestry Initiative

As more pallet companies in California begin seeking certification from the non-profit Sustainable Forestry Initiative to prove that their lumber doesn’t come from illegal sources, consumer awareness about the lumber used for pallet construction is also growing. Climate change and issues of sustainability are making recycled pallets and lumber from certified forests more attractive to pallet buyers, manufacturers and distributors.

Nazareth Pallet’s Role

Nazareth Pallet continues to have a strong pallet supply for all of our customers because we are committed to staying on top of industry trends so that we can plan for any shifts in the pallet market – ahead of time.

We are the supplier of choice, and are frequently sought out by companies who have been failed by other suppliers. Those situations are usually the beginning of a very long business relationship.

Our company culture is very different from other pallet recyclers. We focus on recruiting the highest quality personnel with just the right mix of experience, personality and passion. We are often told from our sales department about the positive experience and friendly atmosphere our clients experience when working with Nazareth Pallet.

Our ongoing (massive) expansion is a perfect example of our commitment to pallet recycling – and it helps that we have the acreage to back up those commitments.

We have the largest facility within a 150 radius of the Lehigh Valley. That’s something we take a lot of pride in.

But our expansion doesn’t end in production. We’ve recently hired a dedicated safety manager, mechanical technician, 16+ production workers, several drivers and key office personnel.

We also recently invested in a new truck and trailer repair facility to keep our fleet in excellent condition. This truly separates Nazareth Pallet from other pallet recyclers and makes for a much better experience when working with us.

We’re excited for 2016 and are committed to meeting (and exceeding) the demands of our customers and an even broader group of consumers. If you’re interested, we invite you to stop by and see all of the improvements for yourself. We always welcome existing and potential customers to visit our one-of-a-kind pallet facility. We are proud of our facility and have an open door policy at all times.