Pallets in the Age of Automation:
What Happens When Your Supply Chain Sneezes?

Back in the time of Napoleon, Austrian politician Klemens von Metternich wrote a phrase that inspired many variants. “When Paris sneezes,” he scribed, “Europe catches a cold.” Nowadays, we have heard the familiar saying, “When America sneezes, the world catches a cold.” But did you know that when your warehouse sneezes, you should probably take your pallets in for a checkup? One significant change can drive the need for other modifications, and that same ripple effect holds for warehouse automation and pallets. 

To be clear, the warehouse automation trend is surging. The global market is thriving due to the surge in demand for e-commerce, increasing labor costs, warehouse space constraints, and a shortage of skilled labor. These factors are leading to greater adoption of automation technologies, intending to enhance warehouse efficiency. 

According to a recent study by BlueWeave Consulting, a prominent strategic consulting and market research firm, the global warehouse automation market was valued at over $15 billion in 2022. BlueWeave anticipates that the market will grow robustly, with a CAGR of 15.8% from 2023 to 2029, culminating in a market size of more than $41 billion by 2029.

What is warehouse automation, and what’s driving its growth?

Warehouse automation refers to the use of technology and automated machinery to perform tasks traditionally carried out by humans. The range of automation includes automated storage and retrieval systems (AS/RS), automated guided vehicles (AGVs) and autonomous mobile robots (AMRs), goods-to-person technology (GTP), conveyor and sortation systems, and more.

Key drivers of this growth include the demand for speedy and efficient delivery of goods, escalating labor costs, and the necessity for improved inventory management. The global growth of the e-commerce industry and the need for effective warehousing and inventory management are further propelling market growth.

Warehouse automation provides notable benefits, including lower business costs, reduction of errors in product delivery, and overall convenience. Other factors such as compatibility with e-commerce, increased storage density, reduced labor requirements, improved speed of order processing, and increased inventory accuracy also are prized by many operators.

Pallets and warehouse automation: what changes?

Poor-quality pallets can pose significant problems for some automated systems. They can result in equipment damage, system downtime, inefficient operations, product damage, and safety risks.

However, one should be careful not to generalize about the relationship between warehouse automation and pallet requirements. Some systems, such as gantry robots that place crates on top of pallets, can be relatively forgiving of pallet quality. Other installations such as AS/RS can be much more sensitive, demanding good condition, strong and dimensionally accurate pallets. 

More companies are leaning on new pallets to ensure top performance. The other approaches involve additional handling steps. Some companies glean through their used pallets to choose the best ones for use in their automated systems. Yet other companies rely on captive or in-house pallets. While this latter approach ensures good quality, it again requires extra handling steps involved with moving the product onto the captive pallet and then off it prior to shipment. Using new pallets can reduce complexity and handling steps.

Finally, to avoid having to use an overly expensive custom pallet, unit load designers also emphasize the importance of involving your pallet supplier in the automation project from the beginning. By working with machinery providers throughout the process, automation and pallet vendors can work in harmony to provide solutions that will work cost-effectively with standard pallets.