Pallet recycling: how used pallets are repaired, rebuilt and ground

Pallet recycling is a large industry in its own right. Research by Virginia Tech and the USDA Forest Service estimated that US plants produced about 919 million new wood pallets in 2021 and repaired or remanufactured about 280 million more. The recycled share is a big part of the pallets that move freight every day.

#How does pallet recycling work?

A used pallet goes through a sorting process and ends up in one of four streams:

The steps in a typical recycling plant:

1. Collection. Recyclers pick up used pallets ("cores") from distribution centers, factories and retailers, usually by trailer load.
2. Sorting. Pallets are sorted by size (48 × 40 in first), construction and condition. Pooled pallets (CHEP, PECO, iGPS) are separated and returned to their owners.
3. Grading. Sound 48 × 40 in pallets are graded A or B. See pallet grades.
4. Repair. Damaged pallets are repaired: boards replaced, companion stringers or plates added.
5. Dismantling. Pallets not worth repairing are cut apart with bandsaws or pulled apart to salvage boards and stringers.
6. Remanufacture. Salvaged parts are trimmed and rebuilt into pallets, often to customer sizes.
7. Grinding. Remaining wood is ground, nails are pulled out magnetically and sold as scrap steel.
8. Heat treatment. Pallets sold for export are heat-treated and marked after repair.

#What pallets are worth to recyclers

Recyclers pay for cores they can resell, and charge for, or refuse, pallets that cost them money.

Prices move with local supply and the price of new lumber. See sell used pallets for 2026 price ranges and how to get the best rate.

#How businesses recycle pallets

For a warehouse, plant or store with a steady flow of used pallets:

1. Separate pooled pallets (blue CHEP, red PECO, iGPS plastic) and arrange pickup with the pooler.
2. Stack the rest by size so the recycler can see what you have.
3. Call two or three local recyclers. Ask what they pay by size and grade, their minimum for free pickup (often a trailer load), and whether they will drop a trailer to fill.
4. Agree a schedule. A drop trailer swapped weekly keeps pallets out of your yard, which also helps fire safety. See pallet fire safety.
5. Ask for a closed loop. Many recyclers also sell pallets. Selling them your cores and buying back graded pallets can cut costs both ways.

#How individuals can recycle pallets

A few pallets at home are harder to place, because recyclers work by the trailer load. Options:

• Offer them free online; people who build with pallets often collect.
• Drop them at a pallet recycler if one is near and accepts small quantities.
• Take broken pallets to a municipal yard-waste or wood recycling drop-off, if your area accepts clean wood.
• Do not burn pallets marked MB, or pallets of unknown history. See pallet stamps and markings.

#What happens to the wood

Wood that cannot go back into a pallet still has uses. Ground pallet wood (with nails removed magnetically) becomes:

Painted pallets, pallets with chemical contamination and MB-fumigated wood are poor feedstock for mulch and bedding. Recyclers sort these out, which is another reason they may charge to take them.

#Pallet recycling for businesses: what to ask a recycler

Not all recyclers are equal. Before signing up, ask:

• Pricing: what they pay (or charge) per pallet by size and grade, and how they grade on arrival
• Service: drop-trailer swaps, pickup frequency, response time for extra pickups
• Pooled pallets: how they handle CHEP, PECO and iGPS pallets mixed into your loads (they should be returned to the pooler, not bought)
• Paperwork: counts and grading reports per pickup, invoices or payments
• Insurance and safety: certificate of insurance, driver safety rules at your site
• Sustainability reporting: tonnage diverted from landfill, if you report it
• Supply back: whether they sell graded or remanufactured pallets you could buy

#Can recycled pallets go back into food or retail supply chains?

Yes, with limits. Graded recycled pallets are widely used for general freight and are commonly accepted by Amazon at Grade B or better (as widely reported). Walmart requires Grade A condition and bans several repair methods on stringer pallets, and many food and pharmaceutical shippers specify new pallets. See pallet grades.

#Recycling and sustainability reporting

Many companies report pallet recycling in sustainability data. Useful figures to request from your recycler are the number of pallets collected, the share reused or repaired, the share dismantled for parts, and the tonnage ground. Pooled pallets returned to their owners should be reported separately.

#Common mistakes

1. Sending pooled pallets to the recycler. They are not yours or theirs to sell. Separate them first.
2. Mixing trash into pallet stacks. Shrink-wrap, cardboard and debris cost the recycler money and lower what you are paid.
3. Leaving pallets outside for months. Wet, rotting pallets lose value and add fire and pest risk.
4. Throwing good 48 × 40s in a dumpster. You pay to dispose of something a recycler would pay you for.

#Plastic pallet recycling

Plastic pallets last many more trips than wood, but when they break they are recyclable. HDPE and PP pallets are ground into flake or regrind and used again, often in new pallets, since many pallet makers use recycled resin. Ask the manufacturer or distributor about take-back; pooled iGPS pallets go back to iGPS.

#Recycled vs new pallets

Recycled pallets are cheaper and use wood that already exists. They are less consistent than new pallets, come mostly in standard sizes, and have unknown history. For buyers deciding between the two, see new vs recycled pallets and recycled pallets.

#Rules for recycled pallets used for export

Any repaired or remanufactured pallet used for export must be heat-treated and re-marked as a whole after repair; the old ISPM 15 mark must be removed or obliterated. An intact, unrepaired HT pallet can be reused without re-treatment. See heat-treated pallets.

#Specifying recycled pallets

If you buy recycled pallets, write the grade definition, allowed repairs, cleanliness and inspection sampling into the order. See pallet inspection. If you need a custom size, remanufactured or combo pallets can be quoted from a drawing: set "recycled or combo lumber acceptable" on a design such as the GMA 48 × 40 template before requesting quotes.