Investigation into the Plastic Pallet Market in the United States in 2018

Pallets are abundant throughout the supply chain, with 2.6 billion pallets in circulation in the United States. More than 93% of goods worldwide are transported in the form of a palletized unit load. Plastics are the second most commonly used material to manufacture these shipping platforms. More than 33% of the companies surveyed by Modern Materials Handling Magazine reported using plastic pallets. Plastic pallets have many advantages, including greater durability compared with wood pallets; however, they are more expensive. Therefore, plastic pallets are commonly used in closed-loop systems where reusability of the pallet is required. 

Although plastic pallets have an important role in the supply chain, there is a lack of information to be found about the plastic pallet industry’s characteristics. Therefore, the Industrial Membership of the Center sponsored a research project to investigate the status of the plastic pallet industry in the United States in 2018. Dorina Bugledits, who received her undergraduate degree from the Business School of the University of West Hungary, worked on this research project as part of her M.S. thesis.

This research investigated the design characteristics of plastic pallets and material usage by the industry. The study collected facts about aspects of the industry such as the percentage of recycled plastic used in manufacturing plastic pallets, the percentage of plastic pallets that contain fire-retardant additives, and the types of strengthening reinforcements that are used in plastic pallets. An online survey was conducted to gather information. It was sent electronically to plastic pallet manufacturers and resulted in a response rate of 54%. The results have shown that almost 16 million plastic pallets were manufactured by just the survey respondents in 2018.

Of the plastic pallets manufactured by survey respondents, over 80% were multiple-use pallets. Due to the high durability of plastic pallets, using them in closed-loop applications results in lower per-use cost and may lead to significant environmental advantages. Most of the pallets produced by the respondents were of a standard size for the grocery industry (48”x 40”) and the automotive industry (48”x 45”). In fact, 84% of the respondents’ plastic pallets were standardized to one of these two sizes; only 7% of plastic pallets were custom sizes. This outlines one of the significant differences between plastic pallets and the wood pallet market, where only 35% of the pallets are a standard size (48”x40”) and 39% are custom sizes (Image 1). This difference could be explained by the high development, setup, and molding costs for plastic pallets, which does not allow for low volume manufacturing of custom sizes.

Image 1. Comparison of pallet size distribution between wood and plastic pallets.

The respondents indicated that close to 50% of the pallets had reinforcement beams and 12% had fiberglass reinforcement. Most plastic pallets that were manufactured by the respondents were made with high-pressure injection molding (63%) using high-density polyethylene (HDPE) resin (68%) (Image 2). The advantages of the high-pressure injection process are faster cycle times and lower pallet weights. Even though plastic resins can be easily recycled, the survey found that most plastic pallets were manufactured using virgin resin. Only 34% of the resin used to make plastic pallets by the survey respondents was recycled resin which could reduce production costs and increase the sustainability of plastic pallets.

Image 2. (left) Plastic pallet manufacturing methods, (right) plastic pallet material composition.

In addition, this study revealed that most of the plastic pallets manufactured in the United States in 2018 had no flame-retardant additives; only 20% of the respondents indicated that their pallets were Underwriter Laboratories (UL) or Factory Mutual (FM) certified. One reason for the low percentage of certified plastic pallets could be the high cost of certification, as well as the fact that most modern warehouses are already equipped with advanced Early Suppression Fast Response (EFSR) sprinkler systems, which can effectively mitigate fires. Since including flame-retardant additives weakens plastic pallet performance and increases cost, manufacturers only add flame-retardant additives when it is required by the National Fire Protection Association or the customer.

Although this survey revealed important industry characteristics, observing the change in these investigated factors over time would help our understanding of the ongoing trends in the plastic pallet sector of the industry. Based on the results collected, a new survey format and framework was designed that would allow researchers to investigate the long-term trends that could be found in the plastic pallet industry. It was proposed that the updated survey be conducted every five years, in collaboration with relevant associations and government agencies, in order to further explore the state of any potential market trends in the plastic pallet industry.

Dorina Bugledits successfully defended her M.S. thesis in December 2019 and is now looking to use the knowledge that she obtained to help companies become more competitive.