2026 Pallet Report: Why Automation Needs Spec-Built Pallets

Last updated: October 28, 2026

Every year, Modern Materials Handling (MMH) and Peerless Research Group survey readers about how they buy and use pallets. The 2026 Pallet Report, published October 1, is the 16th edition. This year, 115 readers took part, and 55% of them work in manufacturing.

At first glance, not much has changed: 92% of respondents use wood pallets, and 73% use the 48 x 40-inch size. But two trends are pulling in opposite directions. More companies are turning to used pallets, while more plants and warehouses are automating, and automated equipment is much less forgiving of a pallet that’s out of spec. Here’s what the numbers show and how to match the right pallet to each job.

What the 2026 Pallet Report found

Wood still dominates. 92% use wood pallets. Plastic use rose from 28% to 36%, and wood composite held at 15%.
Used pallets are growing fast. 35% of respondents say they’re using more used pallets than a year ago, up from 18% in last year’s survey. Only 6% are using fewer, down from 22%.
Quality is the trade-off. Among companies that buy used pallets, 37% say the quality isn’t as good as new, 22% say supply is shorter, and 13% say used pallets have become more expensive to get.
More loads are crossing borders. 53% of respondents ship palletized loads both domestically and internationally. The share shipping only domestically fell from 52% to 43%. And 44% treat their pallets for international shipments.

MMH suggests budget constraints and rising costs could be pushing more companies toward used pallets. For many jobs, a good recycled pallet is a smart, lower-waste choice. The question is where it fits and where it doesn’t.

Automation changes the math

A forklift driver can work around a cracked deck board or a pallet that’s slightly out of square. A conveyor, palletizer, or automated storage and retrieval system can’t.

MMH’s 2025 Pallet Report asked about this directly. 89% of respondents said they want a minimum pallet specification for use with equipment ranging from roller conveyors to automated storage and retrieval systems. When asked which quality factors matter most for automation, 75% rated broken or damaged components extremely important, and 63% gave the same rating to protruding nails and to dimensional tolerances and squareness. MMH noted that these were new questions and the percentages should be read with caution, but the direction is clear.

Pallet Enterprise reported on October 1 that automated equipment is calibrated to exact pallet dimensions, and that in some cases the failure threshold can be as small as 5 to 10 millimeters of deviation, roughly 3/16 to 3/8 of an inch. As the article put it, automated systems “cannot compensate for variability the way that a human operator once could.”

That doesn’t make used pallets a bad choice. It means one pallet doesn’t fit every job, and a pallet that jams a line can cost far more in downtime than it saved at purchase.

New, used or spec-built: matching the pallet to the job

Used and recycled pallets usually fit best in manual handling, one-way domestic shipments, and applications where a little variation doesn’t matter. They keep good wood in service, which is waste reduction in practice. We supply new and used pallets by the truckload, including standard 48 x 40s.

New spec-built pallets make sense when a pallet runs on automated equipment, here or at your customer’s facility, or when the load is heavy or high-value. “Spec-built” means the pallet is built to a written specification: overall dimensions, board sizes, deck coverage, fasteners, and species. That written spec is what lets every load match the last one. Our custom wood pallets start with engineering drawings and load design specs, and we can build physical prototypes for testing before full production.

Export pallets add another requirement. ISPM 15 requires wood packaging to be treated and marked. A pallet that’s repaired (roughly a third or fewer of its components replaced) may use only treated replacement wood, with each new piece individually marked, and a country can require the old marks to be removed and the whole pallet re-treated and re-marked. Replace more than about a third and the pallet counts as remanufactured: the old marks must be obliterated, and the whole unit re-treated and re-marked. Because a pallet’s repair history can raise questions at the border, a new heat-treated pallet built to spec is often the simplest choice for exporters. Our ISPM 15 export compliance page explains the treatment and marking requirements.

Four questions to ask before your next order

Will this pallet run on automation? Ask whether your plant, your warehouse, or your customer’s receiving dock has a pallet spec.
Do you have a written spec? If your pallet is defined only by a part number and “48 x 40,” it’s worth putting the details on paper.
Could it cross a border? If any load might be exported, plan for heat-treated, ISPM 15-marked pallets from the start rather than sorting them out at the dock.
Where can used pallets save money safely? Manual, domestic lanes are often a good fit. Keep them out of the lanes where they cause trouble.

A pallet that’s built right for the job also wastes less wood, which is what Less Waste. More Trees. is about.

If you’re adding automation or tightening a pallet spec, contact us or call 414-520-3366. Send us your current drawing or a photo of your pallet, and we’ll review it for free.

Ryan Ziegler, Wisconsin Lumber & Pallet

More Companies Are Using Used Pallets. Automation Is Raising the Bar.

What the 2026 Pallet Report found

Automation changes the math

New, used or spec-built: matching the pallet to the job

Four questions to ask before your next order

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