April 2025
preference for softwoods due to the increased abundance of SYP and ease of heat treatment.
Within softwood species, Southern Pine (42%) and Douglas-Fir (40%) were the most used, while Spruce-Pine-Fir (SPF) dropped dramatically to just 14% of softwood usage—down from over half in 2016. Notably, this trend may reflect supply constraints, particularly the impact of wildfires and bark beetle infestations on SPF forests in the U.S. and Canada.
3. Repair Activity Recovered, but
Hasn’t Reached Previous Highs
The industry also repaired and remanufactured 280 million pallets in 2021, a partial recovery following a significant drop since 2016, when 326 million pallets were repaired or remanufactured. The study attributes this to several converging factors:
- Fewer pallets were returned to recyclers due
to pallet users keeping them in service longer
due to tight supply.
- Higher lumber prices made pallet repair more
appealing.
- Increased automation helped larger firms
scale up new pallet production more
efficiently than repair operations.
That said, 78% of recovered pallets were repaired, the highest share in 30 years. Repair operations remain an essential part of the pallet ecosystem, particularly in cost-sensitive distribution environments.
4. The 48” x 40” Remains King,
But Faces Pressure
Despite some erosion, the 48” x 40” pallet continues to dominate the U.S. market. It accounted for 29% of new pallets and 80% of repaired/remanufactured pallets in 2021. Still, that 29% represents a 6-point decline from 2016.
The shift is partially due to increased customization and changing logistics patterns. For example, a growing share of pallets used in military logistics and ecommerce are of different sizes, such as the 40” x 48” pallet, which doubled in market share from 4% to 8%.
Meanwhile, custom-sized pallets accounted for 40% of new production, showing a persistent demand for tailored solutions across industries such as chemicals, automotive, and consumer goods.
5. Heat Treatment on the Rise for
New, But Not Repaired Pallets
Driven by regulatory and hygienic requirements in global trade and the food sector, 63% of new pallets were heat-treated in 2021, a 25-point jump since 2016. This reflects both the increased importance of ISPM-15 compliance and the shift toward softwoods, which are easier to kiln dry.
Conversely, only 23% of repaired pallets were heat-treated, down from 38% in 2016. This decline suggests that repaired pallets are less frequently used in export or food and pharma applications—likely due to regulatory concerns over load-bearing consistency and hygiene.
6. The Industry Is Consolidating and Becoming More Automated
Another notable trend is the increasing automation and consolidation of pallet operations. The study finds that more companies operate multiple facilities, and new pallet output per employee has risen sharply since 2016.
These changes reflect broader labor and cost pressures during the pandemic. Many companies struggled to hire, prompting investment in automation to maintain production levels. Larger firms were also more likely to complete the survey—another hint at rising consolidation in the sector.
7. Pandemic Impacts Varied—But Most Companies Adapted Quickly
Despite widespread concern about raw material disruptions, more than half of companies reported stable or improved access by the end of 2020. Only 46% reported persistent procurement challenges.
In terms of operations:
33% of companies avoided layoffs altogether
29% saw sales increases in 2020 over 2019
Only 7% shut down for more than four weeks
The overall picture is one of resilience and adaptability, even amid unprecedented supply chain pressures. The pandemic appears to have accelerated trends already in motion—greater automation, consolidation, and the shift toward softwood use.
Final Thoughts
The U.S. wooden pallet industry emerged from the pandemic not just intact, but in many ways stronger, leaner, and more future-ready. The sector’s ability to scale production, shift materials, and adapt to labor shortages demonstrates its crucial role in both domestic and global logistics.
At the same time, trends like rising customization, shifting size preferences, and evolving environmental expectations will continue to reshape the landscape in the years ahead.
For pallet manufacturers, recyclers, and their customers, keeping a close eye on these dynamics—and planning accordingly—will be key to staying competitive in a market that’s still full of surprises.