Sustainability
The economics of the repair line, in full
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If you want to know whether a recycler's sustainability claims are real, do not read their policy. Look at whether repair makes them money.
A yard that loses money on repair will grind, whatever its website says. A yard that makes money on repair will fight for every unit it can save, and its incentives will do the work that a policy cannot. Ours make money, and here is the arithmetic.
What a repair costs
| Repair | Labour | Materials | Overhead | Total |
|---|---|---|---|---|
| Shear and reset shiners | $0.55 | $0.04 | $0.21 | $0.80 |
| Replace one deck board | $1.05 | $0.28 | $0.42 | $1.75 |
| Replace two deck boards | $1.55 | $0.56 | $0.58 | $2.69 |
| Stringer plug | $2.10 | $0.44 | $0.66 | $3.20 |
| Companion stringer | $2.75 | $0.61 | $0.74 | $4.10 |
| Re-square on the jig | $1.60 | $0.11 | $0.69 | $2.40 |
| Wash and dry (batch) | $0.38 | $0.09 | $0.24 | $0.71 |
Labour is at a fully loaded $31.40 per hour, which is our actual figure including payroll taxes and benefits. Materials are reclaimed boards valued at their alternative use — what we would have sold them for — rather than at zero, because valuing your own inputs at zero is how companies convince themselves of things.
What the repaired pallet earns
| Route | Core cost | Work | Sells for | Margin |
|---|---|---|---|---|
| Inspect only → Grade A | $6.50 | $0.20 | $10.75 | $4.05 |
| 1 board → Grade A | $3.80 | $1.75 | $10.75 | $5.20 |
| 2 boards → Grade A | $3.20 | $2.69 | $10.75 | $4.86 |
| Plug → Grade B | $2.60 | $3.20 | $7.25 | $1.45 |
| Companion → Grade B | $2.20 | $4.10 | $7.25 | $0.95 |
| Cut down → half pallet | $1.20 | $8.90 | $15.00 | $4.90 |
| Dismantle → lumber | $1.10 | $1.40 | $3.00 | $0.50 |
| Grind → fibre | $1.10 | $0.32 | $0.55 | −$0.87 |
Read the last row again
Grinding a pallet we paid for loses money. Not a little — it loses about 87 cents a unit before we sell a single cubic yard of mulch, and mulch pricing only recovers that in a strong season.
This is the most important line in the business and it is why our fibre percentage is 3% rather than 30%. We grind because it is the honest end point for wood with no life left, not because it is a revenue stream.
Nobody who has run the numbers is proud of grinding. The recyclers whose headline service is grinding have either not run them or have a different cost base than they are admitting to.
Where the repair line stops being worth it
At three separate fixes. A pallet needing a companion stringer, a plug and two boards costs $9.99 to repair, sells for $7.25 as a Grade B, and loses $4.94 including the core cost. We reject those to the dismantling line and we tell customers when a toll-repair batch is heading that way.
- One fix: almost always worth it.
- Two fixes: worth it for Grade A outcomes, marginal for Grade B.
- Three or more: dismantle. Repairing it is a hobby, not a business.
- Any structural failure: dismantle regardless of the count.
- Mould: reject, regardless of anything.
The carbon side, briefly
A repair avoids the manufacture of a replacement pallet — roughly 4.8 kg CO₂e and 23 board feet of lumber. Grinding avoids a landfill, which is worth having, but the lumber is gone and the replacement still has to be built.
So the environmental hierarchy and the margin hierarchy are the same list in the same order. That is unusual and it is the reason I am comfortable writing about our sustainability position without feeling like a marketing department. We are not doing the right thing despite the economics.
Why publish this
Two reasons. It lets customers sanity-check what they are being charged, which is fair. And it is an argument aimed at other yards: if your repair line is losing money, the problem is your sort accuracy at the gate, not the repair. Fix the sorting and the whole thing inverts.