Originally Published on: technavio |Returnable Transport Packaging (RTP) Market Analysis North America,Europe,APAC,Middle East and Africa,South America - US,China,Japan,UK,Germany - Size and Forecast 2023-2027
Returnable Transport Packaging Market: Growth, Trends, and Challenges
The Returnable Transport Packaging (RTP) market is on a trajectory to expand with a Compound Annual Growth Rate (CAGR) of 7.37% projected for the period between 2022 and 2027. During this time frame, the market is expected to witness an increase of USD 3,439.74 million in its overall size. The growth of this market hinges on various factors, including long-term cost-saving opportunities for buyers, the burgeoning global e-commerce sector, and the surge in the trade of electronic components between India and China.
This comprehensive report delves into market segmentation based on product types (containers, pallets, drums and barrels, and others), materials (plastic, wood, metal, and others), and geographical regions (North America, Europe, Asia-Pacific, Middle East and Africa, and South America). Furthermore, the report provides an in-depth analysis of the drivers, trends, and challenges impacting the RTP market. It also includes historical market data covering the period from 2017 to 2021.
Forecasting the Size of the Returnable Transport Packaging Market
The Returnable Transport Packaging Market Size
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Key Drivers, Trends, Challenges, and Customer Landscape
The growth of the global returnable transport packaging (RTP) market is primarily driven by long-term cost-saving opportunities for buyers. Most RTP products are constructed using lightweight materials like plastic, resulting in reduced shipping costs. In 2019, the average distribution costs as a percentage of global logistics costs increased by about 3% compared to the previous year. This trend is more pronounced in overland transportation, especially in developing countries like India, where the demand for RTP products is expected to surge due to their lightweight and space-saving advantages during transportation.
Additionally, the utilization of RTP products leads to long-term cost savings. The average lifespan of RTP products ranges from 15 to 20 years, whereas single-use packaging products need to be repeatedly purchased. Consequently, end-users can reduce their distribution costs by around 20%-25% by employing RTP products. These cost-saving benefits are expected to drive the demand for RTP products, thereby fueling the growth of the global returnable transport packaging market during the forecast period.
Noteworthy Trends in the Returnable Transport Packaging Market
The adoption of radio-frequency identification (RFID) technology in RTP is a prominent trend in the market. RTP products such as pallets and containers are equipped with RFID technology to monitor, control, and track the physical condition of products throughout the supply chain. RFID-enabled pallets can be traced from production units through distribution centers to retail stores, preventing theft or misplacement. This RFID tracking technology system also enhances supply chain transparency. Various companies, including Costco, Kraft Foods, Walmart, and Mondelez, are already utilizing pallets embedded with RFID tags. Such advancements in RTP products are expected to boost the growth of the global returnable transport packaging market during the forecast period.
Major Challenges Facing the Returnable Transport Packaging Market
One of the significant challenges to the growth of the global returnable transport packaging (RTP) market is the threat posed by the leasing market. RTP product leasing is anticipated to adversely affect the demand for new product sales, as leasing allows end-users to reduce operational costs associated with purchasing and maintaining these products. Leasing also offers substantial tax benefits compared to purchasing new RTP products. Consequently, small and medium-sized enterprises (SMEs) in the Asia-Pacific region are likely to favor leasing over outright purchase, impacting the demand for newly manufactured RTP products.
Furthermore, the extended useful life of RTP products is another aspect that could be affected by leasing. For instance, the average lifespan of an intermediate bulk container is 20 years, and retrofitting can extend its useful life by an additional 3-4 years. While leasing may reduce the need for frequent product purchases, vendors in the returnable transport packaging market can mitigate losses by incorporating leasing services into their portfolio. This threat from the leasing market is expected to impede the growth of the global returnable transport packaging market during the forecast period.
Understanding the Customer Landscape
The report includes an examination of the adoption lifecycle in the market, ranging from innovators to laggards. It focuses on adoption rates in different regions based on penetration. Additionally, the report provides insights into key purchase criteria and drivers of price sensitivity, aiding companies in their growth strategies.
Leading Vendors in the Returnable Transport Packaging Market
Various vendors in the returnable transport packaging market are employing strategies such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches to enhance their presence in the market. One such vendor is Balmer Lawrie and Co. Ltd., which offers returnable transport packaging solutions, including plain steel drums, lacquer-lined drums, and galvanized drums.
The report offers detailed analyses of the competitive landscape, including information on 15 market vendors, such as:
Berry Global Inc.
Brambles Ltd.
Bulk Lift International LLC
BWAY Corp.
CABKA Group GmbH
CORDSTRAP BV
Craemer GmbH
DS Smith Plc
Greif Inc.
Myers Industries Inc.
Rehrig Pacific Co.
Schoeller Allibert BV
SCHUTZ GmbH and Co. KGaA
Tank Holding Corp.
The Supreme Industries Ltd.
Qualitative and quantitative analyses have been conducted to help clients understand the broader business environment and assess the strengths and weaknesses of key market players.
Fastest-Growing Segment in the Returnable Transport Packaging Market
The containers segment is anticipated to experience significant growth during the forecast period. Containers constitute the largest segment of the global returnable transport packaging market and are expected to maintain this position throughout the forecast period. The segment includes various product categories, such as stacking nest boxes, reusable plastic crates, and bulk crates, widely used in retail warehouses and poultry farms. The retail sector is expected to drive significant demand for products in the container segment. While the organized retail sector accounted for about 85% of the retail industry in the US in 2020, it only represented around 19% of the retail industry in APAC during the same period, indicating substantial growth opportunities in APAC's organized retail sector.
Key Regions for the Returnable Transport Packaging Market
North America is projected to contribute 30% to the global market's growth during the forecast period. The RTP containers are designed with special internal features to protect products from breakage and damage. RTP products offer suppliers and customers a means to ensure robust and undamaged packaging, reducing the risk of goods being stolen or damaged during transit. These packaging products can be efficiently used across various industries, considering their wide range of sizes, shapes, and material structures. Additionally, when containers are equipped with custom dunnage, the carbon footprint can be reduced by decreasing plastic waste. These factors are expected to drive the growth of the regional market during the forecast period.
The COVID-19 pandemic had an adverse impact on the returnable transport packaging market in North America. However, the initiation of large-scale vaccination drives and the resumption of operations in the logistics and transport industries rekindled the demand for RTP products in 2021. The revival of operations in end-user industries, such as food and beverages and automobiles, further increased the demand for RTP products. The growth of the e-commerce and pharmaceutical sectors is also expected to foster demand for RTP products during the forecast period. Furthermore, market-focused
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