RePallet Co.Denver · Circular by design
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Automation ate our Grade B business

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The most consequential change in our sales mix over five years had nothing to do with pallets. It happened in the conveyor aisle.

A Grade B pallet is structurally sound. It is also dimensionally inconsistent in a specific way: a companion stringer adds roughly 19 mm to one side, plugs change the notch profile, and replaced deck boards are rarely the exact thickness of the originals.

None of that matters to a forklift driver. All of it matters to a machine expecting the pallet to be in the same place every time.

What the mix has done

Our sales mix by grade, share of units sold.
YearPremium/A+Grade AGrade BCore
20203%41%48%8%
20214%43%45%8%
20225%48%40%7%
20237%52%35%6%
20248%55%32%5%
2025 YTD9%55%31%5%

Seventeen points of volume moved from Grade B to Grade A and premium in five years, during a period when Grade B was consistently 35 to 40 per cent cheaper. Price did not drive that. Equipment did.

What automation actually objects to

  • Companion stringers. The added thickness catches on conveyor guides and confuses pallet-locating sensors. This is the big one.
  • Plugged notches. AS/RS shuttles that locate on the notch profile can misread a plugged one.
  • Variable board thickness. Robotic palletisers that measure deck height stack differently on a pallet that is 4 mm taller.
  • Bottom deck gaps. Roller conveyors need consistent bearing surfaces; an irregular bottom deck causes drops and jams.
  • Protruding fasteners. Immediate jam risk, and the reason any graded pallet has shiners dealt with.
What it does not object to is replaced deck boards, weathering, staining or age. Grade A with two replaced boards runs on automation without complaint. The issue is geometry, not history.

What it means for buyers

If you are automating, revisit your pallet specification during the project rather than after. We have been called in twice by sites that commissioned an AS/RS, kept their existing Grade B supply, and spent six weeks diagnosing jam rates that had an eight-dollar answer.

  1. Specify Grade A or better for anything that touches automation. No exceptions, and write it into the pallet standard rather than the purchase order.
  2. Keep Grade B for manual areas. Floor stacking, yard movement and outbound one-way shipping have not changed and are still the right place for it.
  3. Mark the two grades visually. The failure mode is a Grade B pallet reaching an automated line because somebody grabbed the nearest one.
  4. Talk to your integrator about tolerance. Some systems are much more forgiving than others, and knowing which you have is worth real money.

What it means for us

Honestly? It is a problem we have to solve rather than a trend we can ride. Our intake mix has not changed — the same proportion of incoming cores need companion stringers as always — but the market for the resulting pallets has shrunk.

Three responses, in order of how much we like them: sell more Grade B into manual operations and one-way shipping, where demand is stable; remanufacture more heavily-repaired units into half pallets and display bases, where geometry matters less; and repair more aggressively to Grade A where the core justifies it, which raises our cost per unit but keeps the pallet in circulation.

What we will not do is grind them. A Grade B pallet is a perfectly good pallet that a particular kind of machine does not like, and destroying it because the market shifted would be the worst kind of easy answer.

#automation#grading#markets

Marisol Quintanar

Yard Operations Manager

Runs the sort line and the intake gate. Has personally graded somewhere north of a million pallets and can call a Grade B from twenty feet.

Let's keep your pallets in the loop

Whether you have 40 broken cores behind the dock or need 4,000 Grade A pallets a month, the conversation starts the same way.