Pallets move the world. That’s the tagline for the National Wooden Pallet & Container Association. When it comes to shipping, there’s little question that it’s a global world. Pallets produced in North America are likely to end up anywhere thanks to the increase in exports. Similarly, manufacturers in other parts of the world are shipping their products to us on pallets made overseas. For that reason, every now and then it’s good to get a global perspective on the pallet market.
Earlier this week, I spoke to Marko Virtanen, sales director of technology for Eltete TPM Ltd. Based in Finland, Eltete is not a pallet maker, per se. Rather, it manufactures angle board, also known as corner board, and high quality paper blocks used for paper and corrugated pallets. Eltete’s customers use the blocks in their pallet-making processes.
One of the first questions I had for Virtanen is whether he has any idea just how big is the paper pallet market. While he didn’t, he said his company alone sells enough blocks to assemble about a million paper pallets a year. Eltete’s customers typically buy the blocks and glue them to paper tops as required.
One of the things Eltete learned from manufacturing pallet blocks is that it’s expensive to assemble paper pallets by hand. So, the company developed a complete system to automatically manufacture the blocks and assemble a finished paper pallet. Although one textile company in Turkey has purchased the system to produce pallets for its own use, most of the customers are for this new system are manufacturing and reselling paper pallets.
So, how’s the global market doing? Virtanen says that it is growing and that growth is being driven by several factors.
Export is the biggest market. The typical paper pallet user is putting its product in a container shipment on an ocean-going vessel. However, air freight is a growing market because the pallets are so much lighter than plastic or wood pallets. In addition, Virtanen says exporters like the fact that they can brand paper pallets with their logos and other graphics. “We have customers, like Schneider Electric, that will print their logos on the cartons and the pallets so that they have the same look when they get to the customer,” he says.
The IKEA effect. A year or so ago, IKEA announced that it was migrating away from wood to paper pallets. In addition to creating some direct business for Eltete, IKEA’s adoption of paper pallets has caused other companies to take a look at a paper solution.
Lumber isn’t always cheap. Paper pallets have been a tough sell in the US because lumber is plentiful and relatively cheap. Virtanen says the same holds true for Finland. However in countries like Japan, which is a new market for Eltete, and Dubai, where a system is up and running, trees are scarce and the cost of importing lumber is prohibitive.
Globalization. Global companies want a common look and feel to their products and packaging. Although destination country specifications may vary from one location to another, paper pallets can be easily manufactured to the size required by the customer and location.
Virtanen believes the ability to create a common shipping platform that can be used anywhere is an advantage. “Our ultimate goal is to build a global network of our type of pallet producers,” Virtanen says. “That way, when we talk to global accounts we can say, you can use this pallet in Saudi Arabia, China, Japan, Finland or anywhere else you are shipping to.”
