Growth Drivers, Technological Advancements & Challenges in Pallet Industry

Wooden pallets are the backbone of e-commerce and fulfilment centres in India. Their affordability and durability make them the go-to choice for efficiently managing large volumes of goods. With the rise of e-commerce, orders tend to be smaller and more frequent, requiring more handling. Pallets help move and store goods effectively, maximising warehouse space. They also work seamlessly with forklifts and other material handling equipment, speeding up the order fulfilment process.

Factors Driving Demand

In India, the wooden pallet industry is on a steady growth path. The market is anticipated to increase by $806.29 million between 2023 and 2028, reaching an estimated value of US$ 1,604.5 million by 2030, with a projected CAGR of 8.83%. Several key trends are shaping the wooden pallet market globally:

• Rise of E-commerce: The booming e-commerce sector in India relies heavily on efficient logistics, making wooden pallets a preferred choice for safe and secure product delivery.
• Expanding Manufacturing Sector: The growth of India's manufacturing base, particularly in the automotive, pharmaceutical, and FMCG (Fast Moving Consumer Goods) industries, drives the demand for efficient material and goods movement, thereby increasing the need for pallets.
• Increased Export Activity: As India enhances its role as a global exporter, the demand for standardised and durable packaging solutions like wooden pallets becomes crucial.

Technological Advancements

Automation and smart logistics solutions such as RFID tags are becoming more common. Pallets compatible with automated systems and capable of integrating with IoT devices are in higher demand. This technology improves supply chain efficiency and reduces labour costs.

Challenges

The pallet manufacturing industry is currently navigating through several significant challenges, with one of the foremost being the procurement of high-quality wood at competitive prices. This challenge is further exacerbated by the absence of standardisation within the industry, leading to variations in pallet design and durability.

As global trade expands, particularly with India's increasing export activities, adherence to international standards for pallet strength and durability has become imperative. Meeting these standards not only ensures compliance but also enhances the competitiveness of the products in the global market. To address this, manufacturers are increasingly adopting stringent quality control measures to guarantee that the pallets meet export criteria.

“We are well-equipped to deliver both standard and custom-sized pallets, backed by the technology and expertise to ensure high-quality products with consistent efficiency and reliability.”
Jay Deepak Shah, CEO and Managing Partner, Jay Wood Industry

Our pallets are designed to meet various industry standards and can be customized to handle different weight requirements as per clients' specifications.

We specialize exclusively in the manufacture of wooden pallets, offering both standard and custom sizes. With an annual production capacity of over 600,000 units, our facility is equipped with an advanced alternating carriage system and a nailing machine, allowing us to efficiently produce both 2-way and 4-way decks and pallets. This system is highly flexible and customizable, enabling us to adapt to a wide range of specifications. Our product range includes EPAL pallets, CP pallets, GMA pallets, pinewood pallets, hardwood pallets, and pallet collars. Every pallet we produce is meticulously crafted to comply with ISPM 15 norms, which require rigorous heat treatment or fumigation of wooden pallets. This ensures that our products are free from pests and minimize the risk of bacterial and fungal contamination, meeting international safety standards.

We utilize an automatic corner cutting machine, automatic branding machine, and automatic stacking machine to optimize the production process, ensuring consistency and high quality in every pallet we produce. Our automatic pallet line is capable of producing up to 170 pallets per hour, depending on the size and complexity of the pallets. This high output rate does not compromise the integrity or durability of our products. In terms of weight capacity, our pallets are designed to meet various industry standards and can be customised to handle different weight requirements as specified by our clients.

Our latest addition at the Taloja plant is a cutting-edge chamfering machine, boasts an impressive output of 1200 planks per hour, significantly surpassing the productivity of its predecessor, which required a full 10-hour shift to achieve the same output.

This advanced equipment not only boost productivity but also reduces work hours and electricity costs. It is designed to streamline our operations by efficiently crafting bevelled edges, or chamfers, on the bottom wooden planks, thereby enhancing efficiency and bringing sustainability to our operations. These chamfers facilitate the smooth movement of hand pallet trucks, significantly improving our logistics processes.

Our typical lead time from order to delivery varies depending on the scale and specifics of the order, ensuring timely fulfillment of customer requirements. We adopt a competitive and transparent approach that reflects the quality and reliability of our products and services. We offer value-driven pricing that aligns with market standards while meeting the diverse needs of our clientele. We serve a diverse array of industries, including logistics, manufacturing, agriculture, and pharmaceuticals.

We prioritise recycling and reuse through a meticulous inspection and repair system, creatively repurposing old pallets into eco-friendly products such as furniture and art. This approach adds value to materials that would otherwise be discarded. In regions like India, this strategy is particularly impactful, aligning our environmental goals with economic benefits for local communities.

“Pallets are integral to our operations and are used extensively for loading, unloading, and storage within our warehouses facilities that are equipped with advanced racking systems, ranging from G+3, G+4, and G+5.”
Padamdeep Singh, CEO, Snowman Logistics

Everything within our warehouses moves on pallets, ensuring streamlined and safe handling of products.

We serve a diverse range of industries, including Quick Service Restaurants (QSR), Dairy, Fast-Moving Consumer Goods (FMCG), Pharmaceuticals, Fruits and Vegetables, Seafood, Meat, and more. Our facilities are equipped with advanced racking systems ranging from G+3 to G+5. To ensure the highest standards of operational efficiency and product integrity, we use standardized pallets with dimensions of 1000mm x 1200mm and a stacking norm of 1500mm. This uniformity simplifies operations and ensures compatibility across all our warehouses and locations.

Our palletization system begins right from the truck during unloading and continues throughout the entire warehouse movement. This approach minimizes the need for manual labor, enabling easier putaway and retrieval of pallets from the racks. During loading, pallets are moved directly into the truck, streamlining the bulk movement of goods and significantly boosting productivity.

While bulk movements are highly efficient, for smaller movements, we break the pallet load and pick the required volume. Although this activity can be cumbersome, it allows us to maintain flexibility and meet varied operational needs. A comprehensive palletization system enhances the speed, accuracy, and efficiency of our warehouse operations. Currently, our pallet management is focused within the warehouse, where each pallet is coded to track its location, allowing us to efficiently manage the movement and placement of pallets without the need for extensive tracking.

The average lifespan of a pallet ranges from 4 to 5 years, although some may begin to show signs of wear and tear as early as year 2 due to rough usage. However, with consistent repair and maintenance, a pallet's lifespan can be extended to 6–7 years. Since our pallets remain within the warehouse, we can perform necessary repairs on-site, ensuring that our operations remain efficient and cost-effective.

For sourcing, we own a portion of our pallets and lease them on a long-term basis from suppliers such as Leap and Chep. This dual approach allows us to maintain flexibility and ensure we have the necessary resources to meet our operational demands.

To ensure the quality and durability of pallets, we evaluate several factors, including the type of wood used, pallet design, payload capacity assured by the supplier, and overall structure and workmanship. We carefully inspect the assembly of the planks and conduct performance trials. Additionally, we ensure the pallets are not excessively heavy, as heavier pallets reduce the racking system's payload capacity. Ideally, pallet weight is maintained around 25 kg.

In terms of materials, we use treated wood rather than plastic. While plastic pallets are more durable, they are significantly more expensive—up to five times the cost of wooden pallets. Treated wood is cost-effective and meets the stringent requirements for cold storage, as well as food and pharmaceutical storage. This approach strikes the right balance between cost, durability, and regulatory compliance, ensuring our logistics operations are both efficient and effective.

For pallet reuse and recycling, we operate a leasing model for most of our pallets. When pallets require repair, we refurbish and reuse them. Irreparable pallets are recycled, minimizing waste.