Dunnage Packaging Market Size, Share & Trends Analysis Report By Raw Material (Fabric, Corrugated Plastic), By Application (Automotive, Electronics), By Region, And Segment Forecasts, 2020 - 2027

Report Overview

The global dunnage packaging market size was valued at USD 3.0 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 6.1% from 2020 to 2027. Growing demand for sustainable and green packaging solutions on account of their cost-effectiveness as opposed to expendable packaging is expected to drive the market growth over the upcoming years. The product is an integral part of the returnable/reusable packaging industry, which permits the businesses to utilize the same packaging frequently over a notable period, thereby optimizing the costs associated with the packaging of a product. The growing consumption of sustainable packaging across the automotive, consumer durables, and food & beverage industries is likely to augment the demand over the upcoming years.

The market in China is projected to exhibit high growth due to high demand as a result of the product’s ability to ensure partial sustainability, cost savings, and safety of packaged products. In addition, the presence of a large consumer base as well as growing industrialization due to the country’s lower production costs is anticipated to drive the product demand in the automotive, healthcare, and aerospace industries in the next few years.

In automotive applications, manufacturers majorly use the product for the transportation of their finished and semi-finished automotive components, including the delivery of body parts from the vendor or component supplier to the assembly parts. Herein, short distance and frequent transportation of heavy and high-volume products encourage automotive companies to opt for the reusable packaging solutions, which is projected to propel market growth.

On the basis of raw material, corrugated plastic-based products dominated the global market in 2019. The segment is anticipated to expand further at the fastest CAGR from 2020 to 2027 on account of its ability to protect the packaged product from abrasion, vibration, corrosion, moisture, and electrostatic discharge. Corrugated plastic is flexible and impact-resistant. Made out of Polypropylene (PP) or Polyethylene (PE), corrugated plastic is not only eco-friendly as compared to molded plastic packaging, but can also be stitched, stapled, die-cut, or heat welded to customize to match any form of dunnage solution.

However, the production of customizable dunnage solutions is a capital-intensive process and involves a high set-up cost to configure an initial product manufacturing plant. Moreover, rapid technological advancements gave rise to the manufacturing of innovative equipment, which is costly to buy. Industry players having massive investment capabilities are likely to enter the market as the return on investment is high in the long run.

This, in turn, exhibits an entry-barrier for small- and medium-scale companies as the high capital cost per unit of output make it difficult for new players to manufacture dunnage solutions. Moreover, the customer demands regarding the product’s sizes, materials used, and shapes differ; thereby implying the need for fully equipped production lines to manufacture distinguished solutions. Since the small- and medium-scale companies do not possess the initial investment capacity, they fail to achieve the cost-benefit ratio in the long run.

Raw Material Insights

The corrugated plastic segment led the market and accounted for more than 28.0% share of the global revenue in 2019. Corrugated plastic is a low-cost lightweight material that offers a flexible way to design a custom packaging solution that fits any type of container. Various characteristics of the material including moisture resistance and high-density of parts per container are projected to augment its demand further.

The corrugated plastic dunnage provides reliability and excellent protection as opposed to cardboard counterparts. Corrugated plastic is capable of withstanding punctures, tears, and impact, and is washable and resistant to dust. The material is easy to fabricate, handle, and convert, and it offers long-term and reusable implementation in most temperature ranges and any environment. These factors, in turn, are estimated to spur the segment growth over the forecast period.

Foam-based dunnage packaging is generally fabricated from expanded polyethylene and expanded polypropylene beads. The material is lightweight and can be easily molded to replicate the shape of any component/product packaged. The demand for foam material is likely to witness significant growth on account of material’s ability to impart high resistance to abrasion and impact, protection against electrostatic discharge, and increased shock absorption for Class A surface protection.

In addition, foam-based packaging exhibits versatility, strength, and handling advantages; which make it ideal for safe shipment, handling, and storage of complex and delicate parts or products. Moreover, the material is returnable, reusable & recyclable, and offers shock and vibration protection and cushioning support, which help in reducing transport costs.

Application Insights

The automotive application segment led the dunnage packaging market and accounted for more than a 27.0% share of the global revenue in 2019. The automotive industry opts for the packaging solutions that offer the ultimate protection for high-end components and goods. Products, such as the engine, decorative interior items, and other small mechanical elements, account for a significant share of the automotive transportation and logistics packaging solutions.

Key players in the automotive industry use a reusable transport packaging system to achieve closed logistic systems featuring secure arrival and distribution points. The demand for returnable packaging on account of their benefits, such as improved inventory control due to box tracking; reduced packaging waste, and carbon footprint; as well as their ability to protect valuable automotive parts due to packaging rigidity, is projected to drive the segment growth.

In the electronics sector, electronic devices require specific packaging characteristics, including pilferage-proof and impact resistance packaging solutions, while some electrostatic-sensitive devices require electrostatic- dissipative (ESD) materials. The electronics segment is projected to witness the fastest growth from 2020 to 2027 as the product offers conductive properties, quick turn-times, high-quality thermoforming, and competitive pricing.

Furthermore, the growth of this sector is likely to be further driven by various advantages offered by corrugated plastic dunnage solutions, including resistance to water, temperature, and chemicals. The material is lightweight and can be molded into several sizes and appearances. Apart from corrugated plastic, foam-based dunnage is also utilized in packaging electronic goods. Not only the product is sustainable but also exhibits excellent features, such as durability, versatility, and high electrical resistance.

Regional Insights

Asia Pacific led the market and accounted for over 33.0% share of global revenue in 2019 and is estimated to retain its dominance registering the fastest CAGR from 2020 to 2027. This growth is accredited to the rising demand for reusable packaging solutions from economies, including China and India, as this type of packaging ensures the safety of packaged products, partial sustainability, and cost savings.

The growing application of reusable packaging in the food & beverages, healthcare, and Fast-Moving Consumer Goods (FMCG) industries is likely to further propel the regional market. Other factors, including rising usage of multi-use packaging instead of single-use packaging solutions, ongoing industrialization, rising consumer awareness regarding green and sustainable packaging materials as well as reducing packaging wastage are anticipated to spur the product demand in the Asia Pacific.

The market in North America was estimated to be USD 863.1 million in 2019 and is anticipated to grow at a steady rate over the upcoming years. Growing demand for corrugated paper-based dunnage products from the industries, such as aerospace, electronics, and automotive, owing to their excellent load stabilizing capacity, is anticipated to augment the overall market growth in the region.

The regional market is characterized by key manufacturers that focus on strategic initiatives, such as extensive R&D, mergers & acquisitions, product innovation, and capacity expansion, to increase their sales and meet the rising demand from the automotive, food & beverages and retail industries.

For instance, in May 2018, ORBIS Corporation, a subsidiary of a U.S.-based plastic and corrugated packaging manufacturer, Menasha Corporation, announced the acquisition of a U.S.-based returnable and dunnage packaging manufacturer, Hinkle Manufacturing. This strategic initiative by ORBIS Corporation was aimed at expanding the company’s portfolio of custom solutions offering in the reusable packaging industry.

Key Companies & Market Share Insights

Industry players in the market are investing in research & development activities to produce better-performing and innovative solutions. Dunnage packaging systems are stackable and lightweight, which, in turn, eliminates wastage of space and assists in optimizing the transportation costs. The growing consumption of returnable packaging products is prompting industry players to offer solutions obtained from sustainable materials, which is likely to spur market growth. In March 2020, Liquibox, a U.S.-based entity of Olympus Partners, acquired the plastic division of DS Smith for an enterprise value of over USD 448.6 million. DS Smith’s plastic division encompasses flexible and rigid packaging operations; wherein, the Liquibox brand absorbed the Worldwide Dispensers and flexible packaging businesses. Meanwhile, the DS Smith’s rigid packaging businesses for injection Molded, foam, and extruded products were split into independently operating divisions, namely DW Reusables, Corplex, and Engineered Foam Products. Some of the prominent players in the dunnage packaging market include:

• ORBIS Corporation (Menasha Corporation)

• Corplex (DS Smith)

• NEFAB GROUP

• UFP Technologies, Inc.

• Reusable Transport Packaging

• Amatech Inc.

• MJSolpac Ltd

• Ckdpack

• GWP Group

• Interior Packaging Design, LLC.

• Packaging Corporation of America

• Dunnage Engineering

• Salco Engineering and Manufacturing Co., Inc.

• Package Design & Mfg

• KEENER Corporation

• JIDA Industrial Solutions

• Artisanz Fabrication and Machine, LLC

• Schoeller Allibert

Dunnage Packaging Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global dunnage packaging market report on the basis of raw material, application, and region:

• Raw Material Outlook (Revenue, USD Million, 2016 - 2027)

  • Corrugated Plastic

  • Moulded Plastic

  • Aluminium

  • Steel

  • Fabric

  • Corrugated Paper

  • Wood

  • Foams

  • Others

• Application Outlook (Revenue, USD Million, 2016 - 2027)

  • Automotive

  • Aerospace

  • Electronics

  • Food & Beverage

  • Consumer Durables

  • Healthcare

  • Others

• Regional Outlook (Revenue, USD Million, 2016 - 2027)

  • North America

    • The U.S.

    • Canada

    • Mexico

  • Europe

    • The U.K.

    • Germany

    • France

    • Spain

    • The Netherlands

  • Asia Pacific

    • India

    • China

    • Japan

    • Australia

  • Central & South America

    • Brazil

    • Argentina

  • Middle East & Africa

    • UAE