The pallet industry is a $10,000,000,000 industry. That means the wooden pallets used to carry around consumer goods are worth more to the economy than most people can even comprehend. As such, it’s no wonder that entrepreneurs worldwide are vying for a piece of the pie, causing a resurgence in the pallet business.
At any given time, 2 billion pallets are floating around the United States alone. 80% of consumer goods are shipped on pallets, making them a low-cost, effective way to get goods from point A to point B. Furthermore, wooden pallets are also recyclable in nature, creating a market for pallet recovery.
Pallet Recovery Business
Approximately 43% of pallets currently in use in the United States are recovered. Of the 474 million pallets recovered in 2011, 326 million were returned to the market as is while 148 million were refurbished.
Since the 1990’s, the market for new pallet production has been steadily slowing and ultimately decreasing. Conversely, the market for recovered pallets has been growing rapidly. Despite an increase in shipping innovation– the development of corrugated and plastic pallets for example– wooden pallets still dominate the market.
This overall increase in the pallet recovery business has created a growing need in the marketplace for scrap pallet collectors. Scrap pallet collectors source used pallets from various business that receive or handle shipments, including restaurants, air freight forwarders, and construction sites. The pallets are then lightly repaired or disassembled and sold for scrap, depending on the depreciation of the pallet in question.
The pallet recovery business is a popular choice for aspiring entrepreneurs, due to its low start-up costs and scalability.
While pallets have always been a standard shipping tool for businesses, they’ve become a common choice for moving houses as well, increasing market demand.
Using a pallet delivery service reduces the need for hiring movers, or burdening friends and neighbors to assist in the process. Boxes are kept organized, wrapped, and secure during transport, reducing the likelihood of breakage.
Many pallet delivery services insure the products they carry, keeping consumers covered. They are also a popular choice for moving specialty items, such as hot tubs and pianos.
Now, more than ever, businesses are expected to exude a sense of Corporate Social Responsibility. That is, paying attention to how their business is perceived in relation to philanthropic efforts and environmental consciousness.
Despite the rapid growth in the pallet recovery market, millions of pallets still end up in landfills each year. This trend creates a unique opportunity for start-up pallet recovery businesses to create a solution for environmentally conscious businesses worldwide.
Wooden pallets are also “greener” than their plastic counterparts. Plastic pallets are manufactured using oil-based products and chemicals. So, while their reduced weight and durability have monumental environmental impacts during shipping, the manufacturing process offsets their sustainability.
It’s also a little-known fact that many pallet manufacturers will only source wood from accredited eco-friendly sources. Programs like the Forest Stewardship Council are in place for these businesses to prevent clear-cutting and deforestation.
Pallets in the Global Market
In 2014, over 127 million TEUs– about 63 million 40-foot shipping containers– worth of freight were shipped globally via cargo ship. Each container can hold 20-24 pallets, depending on the size. That’s 1.26 billion pallets in a year for this shipping method alone.
What does this mean for the aspiring entrepreneur? It means opportunity.
As the global marketplace grows, the need for sustainable shipping methods will continue to grow as well. Now is the perfect time to grab a pry bar and use your business savvy to enter the pallet recovery business.