If you buy recycled pallets, you will be asked one question before anything else: do you want #1 or #2? The two grades — also called Grade A and Grade B — are the same standard 48 x 40 pallet, but they differ in condition, appearance and price. Choosing the right one can cut your pallet spend without risking damaged loads or rejected shipments.
This guide explains what each grade means, where each one makes sense and how to decide — from the team at Express Pallet Collection, a Surrey, BC pallet supplier that sorts and supplies both grades every day.
The short answer
- Choose #1 (Grade A) when pallets leave your building and represent your business: shipments to retailers, grocery distribution centres, automated warehouses or customers with strict receiving standards.
- Choose #2 (Grade B) when pallets stay in-house or travel one way: internal storage, work-in-progress, scrap and recycling loads, or shipments where the receiver doesn’t inspect pallets closely.
- Not sure? Many businesses use both — #1 for outbound customer orders and #2 for everything else.
What is a #1 (Grade A) pallet?
A #1 pallet is a recycled pallet in excellent condition. It has few or no repairs, its boards and stringers are solid and uniform, and it looks close to new. Grade A pallets are usually the standard 48 x 40 stringer design with 4-way entry (notched stringers), so forklifts and pallet jacks can lift them from any side.
Because they are consistent in size and condition, #1 pallets run well on conveyors and in automated racking, and they are accepted by most retailers and distribution centres.
What is a #2 (Grade B) pallet?
A #2 pallet is fully functional but shows its age. It may have repaired boards, a “companion” stringer or metal plate added for strength, mixed wood colours or cosmetic wear. It carries loads and handles like any standard pallet — it just doesn’t look as clean.
The trade-off is price: Grade B pallets cost less than Grade A, which adds up quickly when you buy hundreds or thousands a month.
#1 vs #2 pallets at a glance
| #1 (Grade A) | #2 (Grade B) | |
|---|---|---|
| Condition | Few or no repairs, uniform boards | Repairs, companion stringers or plates, cosmetic wear |
| Appearance | Clean, close to new | Mixed wood colours, visible fixes |
| Strength for standard loads | Strong | Strong — fully functional |
| Automated systems and conveyors | Well suited | Check with your system first |
| Retail and DC acceptance | Widely accepted | May be refused by strict receivers |
| Price | Higher | Lower |
| Best for | Outbound shipments, customer-facing loads | In-house use, one-way and internal shipments |
When #1 pallets are worth the extra cost
- Your customer has pallet standards. Big-box retailers, grocery chains and many distribution centres inspect incoming pallets and can refuse damaged or heavily repaired ones.
- You run automated equipment. Conveyors, palletizers and automated storage work best with consistent pallets.
- Presentation matters. If your product ships on the pallet straight to a store floor or a customer’s dock, a clean pallet reflects on your business.
- You stack high or rack heavy loads. Fewer repairs means fewer weak points.
When #2 pallets make more sense
- Internal storage and work-in-progress. Pallets that never leave your warehouse don’t need to look new.
- One-way shipments. If the pallet won’t come back, there’s little reason to pay for top grade.
- Scrap, recycling and bulk material loads. Grade B is the practical choice.
- High-volume, price-sensitive operations. Moving to #2 where you can is one of the simplest ways to lower pallet costs.
What about heat-treated and block pallets?
Grade describes a pallet’s condition, not its type. If you export, you need pallets that are heat-treated and stamped to the ISPM-15 standard, whatever their grade. For heavy loads and automated warehouses, reconditioned block pallets (true 4-way entry) are another option. Our guide to standard pallet sizes in Canada covers sizes, types and the HT stamp in more detail.
How to choose: four questions to ask
- Will the pallet leave your building, and does the receiver inspect pallets?
- Does it run through automated equipment or high racking?
- Does it need to be heat-treated for export?
- How many do you use a month, and how much would switching some to #2 save?
If you answer “yes” to the first two, start with #1. If not, #2 will likely do the job for less.
Grade A and Grade B pallets in Surrey and the Lower Mainland
Express Pallet Collection supplies around 16,000 #1 (Grade A) and 20,000 #2 (Grade B) recycled pallets every month, plus reconditioned block pallets and new pallets built to order. We deliver from our Surrey yard across the Lower Mainland and Fraser Valley — see our pages for pallets in Surrey, Vancouver & Burnaby and Abbotsford.
We also buy used pallets. Pickup is free for loads of 200 or more standard-size 4-way pallets, so the pallets you no longer need can help offset the ones you buy.
Frequently asked questions
Is a #1 pallet the same as a Grade A pallet?
Yes. #1 and Grade A are two names for the same top grade of recycled pallet. Likewise, #2 and Grade B mean the same thing.
Are #2 pallets strong enough?
For most standard loads, yes. Grade B pallets are fully functional; the repairs that make them #2 are there to keep them strong. The main differences are appearance and whether a strict receiver will accept them.
Can I mix #1 and #2 pallets in one order?
Yes. You can order #1 pallets for outbound shipments and #2 for internal use in the same delivery.
How much do #1 and #2 pallets cost?
Pallet prices follow the lumber market and depend on grade, size and quantity, so we quote every order. Grade B is always the lower-cost option.
Get a quote
Tell us how many pallets you use and how they’re used, and we’ll recommend the right grade and send pricing, usually within one business day. Request a pallet quote or call +1 778-776-1957.
