The Sophistication of the Pallet Industry
18 Apr 2016
Pallets continue to be a widely used product for shipping many types of goods, but the pallet industry has changed significantly over the last 15-20 years. This has recently been highlighted following an interview with the CEO of Southland Manufacturing, Glenn Atkinson, who suggested that the pallet industry now faces much stiffer competition, with reduced profit margins and an increased focus on pallet design.
As we move into 2016, pallet companies will find that they are likely to face tougher competition than ever before. In days gone by, if you needed a pallet you would likely call your local supplier, but the advent of the internet has created a global marketplace where new business opportunities make it easier to put consumers in touch with suppliers far and wide who can offer the best price. Inevitably, this is bound to have an effect on profit levels, with increased competition creating tougher and leaner margins.
Wood Versus Plastic
Wooden pallets have traditionally been the pallet of choice for many consumers, but in more recent times the popularity of pallets made from plastic has grown exponentially. This trend is likely to continue going forward. Increasing numbers of customers are discovering the many benefits to using pallets made from plastic over their wooden counterparts in terms of usability, hygiene, safety and durability. At the same time, pallet wood is becoming more expensive, meaning that consumers are opting for lower-cost products such as pallets made from plastic. In particular, the environmental and sustainable benefits of new plastic pallets mean they can be used many more times than wooden ones, and even used plastic pallets are becoming a viable option for many businesses. Focus on pallet design is also becoming a much bigger feature of the pallet industry going forward.
Despite weighing up the long-term benefits of various pallet options, it appears that when it comes to decision making some firms take on a limited scope. Rather than looking at factors such as dependable delivery, consistent quality and design services, it’s often the case that decision-makers only scrutinise the upfront costs rather than the overall cost benefits. This is a challenge that many suppliers have to face. Further challenges are introduced by government policies that limit growth and the demise of the traditional work ethic.
Staying Ahead of the Competition
With so many challenges to face, the question is how manufacturers are able to stay ahead of competitors and secure business. Whether a firm supplies wooden pallets or new or used plastic pallets, the key is to produce, deliver and manage high volumes of a wide variety of pallet types and sizes rather than just focusing on a limited type.