30 WESTERN PALLET
2024 in Review:
7 Major Developments in the Pallet and Material Handling Industries
While the federal election was the biggest story of 2024, we will reflect on that in our look ahead to 2025, which follows this article. From PPWR and other sustainability initiatives to the advance of automation and electrification, here are other notable storylines from 2024
1 Economic Recovery?
Even as the pallet industry has been patiently awaiting recovery, experts tell us that it has been underway, albeit subtly. According to Deloitte, the US economy has had the strongest recovery from the COVID-19 pandemic of any major developed economy.
“Annual inflation is approaching the Federal Reserve’s target without a recession, non-managerial real wages have exceeded pre-pandemic trends, consumer spending is continuing to exceed expectations, investment in factories is at record levels, and the United States is a net exporter of petroleum products,” analysts recently reported.
As for pallet prices, Federal Reserve Bank data shows new pallet prices having dropped around 4.5% from January through November. Looking at Recycle Record, A Grade Recycled prices for California started and finished the year at $7.75, albeit with a gradual tightening of core availability and plant capacity utilization increasing from 85% to 90%.
2 PPWR
The pallet story getting the most attention this year is the Packaging and Packaging Waste Regulation (PPWR). Finally adopted this December, it is a European Union (EU) regulation that aims to reduce packaging pollution and promote a circular economy. In the case of transport packaging, 40% must be reusable (in Europe) by 2030. This includes pallets, which must be part of a formal European pooling program unless they qualify for an exemption.
To keep things in perspective, U.S. exports to the EU total about $500 billion annually, and could include about 40 million to 60 million pallets. It is worth noting that machinery and equipment, a category strongly associated with custom packaging and pallets, accounts for 25% of U.S. shipments to the EU. As such, pallet pooling is not an obvious solution.
NWPCA states that it was explicitly told that the reuse provision's intended scope was for EU supply chains and not to disrupt critical international trade, given that products such as machinery often need custom-designed to fit the particular requirements of the shipment.
3 Certified Lumber Sourcing
In 2024, WPA member 48forty achieved Sustainable Forestry Initiative (SFI) certification, marking a significant milestone in sustainable wood sourcing. This story speaks to a broader trend within the U.S. wood pallet sector towards environmentally responsible practices. Other certified WPA members include CHEP, Millwood, PalletOne, and others.
By comparison, Europe exhibits higher overall adoption rates of sustainable certifications, particularly the Programme for the Endorsement of Forest Certification (PEFC), due to stringent EU regulations and a long-standing emphasis on environmental sustainability. The European market places significant importance on certified sustainable products, influencing widespread industry compliance.