At Pallets Eco we process tens of thousands of used pallets every week. Each one arrives with its own history, a different pattern of wear, damage, and remaining useful life. Our job is to evaluate every pallet, determine its optimal path forward, and extract the maximum value from the materials while generating minimum waste. This process is the heart of our business and the foundation of our commitment to circular economy principles.
In this article we take you inside our recycling facility and walk you through exactly what happens to a used pallet from the moment it arrives on our dock to the moment it ships back out to a customer, ready for its next life.
Step 1: Collection and Receiving
Our recycling process begins with collection. We operate a fleet of trucks that pick up used pallets from warehouses, distribution centers, retail locations, and manufacturing plants across our service area. We also receive pallets at our facility from customers who deliver their own loads. On a typical day, between 8,000 and 15,000 pallets arrive at our main processing facility.
At the receiving dock, incoming loads are weighed and documented. The driver receives a receipt showing the quantity and estimated grade mix of the load. For customers with pallet return program contracts, this information feeds directly into their account management system so they can track recovery rates and sustainability metrics in real time.
Step 2: Sorting and Inspection
Once unloaded, pallets move to our sorting area where trained inspectors evaluate each unit. This is the most critical step in the process because the sorting decision determines the economic and environmental outcome for each pallet. Inspectors look at overall structural condition, deck board integrity, stringer or block condition, fastener security, contamination or staining, and dimensional accuracy.
Based on this inspection, each pallet is sorted into one of five categories: Grade A reuse, which means the pallet can be resold as-is with no repair needed. Grade B reuse, which requires minor cosmetic issues to be accepted. Repair candidates, which are structurally sound but need one to three board replacements. Dismantle candidates, which have good individual components but are not economical to repair as whole units. And scrap, which are pallets too damaged for any structural reuse.
Step 3: Repair and Reconditioning
Pallets sorted into the repair category move to our repair line, where a team of experienced carpenters brings them back to serviceable condition. The repair process involves removing damaged or broken deck boards, replacing them with sound boards from our parts inventory, re-nailing loose connections, trimming any protruding nails or splinters, and verifying dimensional accuracy. A skilled repair technician can process 50 to 70 pallets per hour depending on the extent of damage.
The replacement boards used in repairs come from two sources: dismantled pallets that were not repairable as whole units, and new lumber stock for repairs where matching board dimensions are not available from salvage. We prioritize using salvaged boards to maximize the circular economy benefit and minimize the need for new lumber inputs.
Step 4: Quality Control and Grading
After repair, every pallet goes through a final quality control inspection before it is approved for resale. This inspection verifies structural integrity under load, confirms dimensional tolerances, checks for protruding nails or splinters, and assigns a final grade. Pallets that do not pass quality control are routed back to repair or reclassified to a lower grade. Our defect rate at this stage is less than 2 percent, reflecting the thoroughness of our initial inspection and repair processes.
Step 5: Inventory and Distribution
Approved pallets are sorted by size, grade, and type, then stacked in our inventory yard ready for customer orders. We maintain an inventory of over 100,000 pallets across all major sizes and grades to ensure rapid fulfillment. When a customer places an order, pallets are pulled from inventory, loaded onto delivery trucks, and shipped within 24 to 48 hours for most standard sizes and grades.
Step 6: Dismantling and Material Recovery
Pallets that are not economical to repair as whole units are dismantled into individual components. Good boards are salvaged for use as repair parts. Metal fasteners are collected and recycled. The remaining wood, which consists of pieces too short, too narrow, or too damaged for structural use, is processed into secondary products.
What Happens to End-of-Life Pallet Wood
- Landscape mulch and ground cover: the largest secondary market for end-of-life pallet wood by volume
- Biomass fuel: wood chips from pallets are used as fuel in industrial boilers and power generation facilities
- Animal bedding: clean, dry wood shavings are used as bedding for horses, poultry, and other livestock
- Particle board and composite panel manufacturing: wood fiber from pallets becomes raw material for engineered wood products
- Compost additive: wood chips mixed with organic waste accelerate the composting process
- Colored mulch production: wood chips are dyed and sold as decorative landscape mulch
Our Zero-Waste Commitment
At Pallets Eco we are committed to a zero-waste operation. Currently, over 97 percent of all material that enters our facility leaves as a usable product, whether that is a repaired pallet, salvaged lumber, mulch, biomass fuel, or recycled metal. The remaining 3 percent consists primarily of contaminated or treated wood that must be disposed of through certified waste handlers. Our goal is to reach 99 percent material recovery by 2026 through continued process improvements and expanded secondary product markets.
When you partner with Pallets Eco for your pallet needs, you are not just buying a commodity product. You are participating in a circular economy system that maximizes the value of every piece of wood and minimizes environmental impact at every stage. Contact us to schedule a facility tour and see our recycling process in action, or to discuss how we can build a sustainable pallet program for your business.