What drives pallet prices: lumber, cores, labor and freight

Lumber is the biggest driver of new pallet prices, because raw materials are the largest cost in making a pallet. Recycled prices follow the supply of used pallets for repair. On top of both come labor, freight and diesel, seasonal demand, heat treatment and the grade you specify. Each of these moves on its own schedule, which is why pallet quotes change over time.

How Pallet Forecast tracks the drivers

Pallet Forecast follows these costs with official Producer Price Index (PPI) data from the U.S. Bureau of Labor Statistics. A PPI is an index of what producers receive over time, not a price you can pay, so it tells you direction and size of change rather than a dollar figure.

What it measures	BLS series
Wood pallets and pallet containers	WPU084101
Hardwood lumber	WPU0812
Softwood lumber	WPU0811
No. 2 diesel fuel	WPU057303
General freight trucking, long-distance truckload	PCU484121484121

The monthly forecast uses these series to show where pallet costs are heading. The prices page shows current delivered ranges for full truckloads.

Lumber: hardwood, softwood and cants

New wood pallets are built from lumber, so lumber cost flows straight into their price. Researchers who studied hardwood pallet mills, in work published through the USDA Forest Service, put it plainly: raw materials are the largest cost component in pallet manufacturing.

Which lumber matters depends on where your pallets are built. In a Virginia Tech survey of the industry, softwoods were 55 percent of the pallet market in 2016 and hardwoods 45 percent. The split was very different by region: wood used for pallets in the West was 97.9 percent softwood, while in the Northeast it was 91.4 percent hardwood. That is why Pallet Forecast tracks both lumber series.

Pallet makers buy from the low-grade end of the lumber market. For hardwood pallets, the main raw material is cants, the center section of a log. Pallet makers that don't saw their own logs buy cants from hardwood sawmills that cut grade lumber, or from mills that saw small, lower-grade logs. A price analysis in the trade journal Pallet Enterprise described cants as usually a byproduct of grade hardwood lumber production, and noted that when grade lumber output fell, cant supply tightened. So hardwood pallet costs depend partly on how much higher-value lumber sawmills are cutting.

In our analysis of BLS data since 2007, lumber price changes tended to show up in pallet prices within roughly one to three months. That gap gives you a little warning: when lumber moves, pallet prices have tended to follow.

Recycled pallet core supply

Recycled pallets aren't built from new lumber. They come from cores, the used pallets that recyclers collect, sort and repair. Damaged pallets are typically fixed by replacing broken deckboards or by adding companion stringers or metal plates to cracked stringers.

That makes recycled prices depend on how many cores are available nearby. In a Virginia Tech study of pallet repair firms, most collected the bulk of their cores within 11 to 50 miles, and none went farther than 200 miles. The researchers said collection distance likely depends on transportation costs, including fuel prices, and on how many cores are available in a region, with competition for a limited number of cores also playing a part. Fewer cores nearby means longer trips and more competition for each one, and both add cost.

Labor

Pallet repair still runs mostly on people. The same Virginia Tech study found most repair firms relied on high levels of manual labor with limited machine support. Inspection, nailing and painting were the most manual steps. That makes labor a direct part of what each recycled pallet costs to produce.

Freight and diesel

Every delivered price includes freight, and freight cost moves with diesel and trucking rates, which is why Pallet Forecast tracks both the No. 2 diesel PPI and the long-distance truckload PPI. Diesel also hits before the pallets ship: recyclers burn fuel collecting cores, as noted above.

This is also why you should always compare delivered prices. Two suppliers with the same pallet price at the yard can land very different numbers at your dock. See how to buy pallets in bulk.

Seasonal demand

Pallet demand isn't flat through the year. DAT, the freight data firm, describes a pallet season tied to the annual produce harvest. Growers and shippers need pallets all at once during regional produce seasons, and DAT notes the spike can bring shortages and higher costs for both new and recycled pallets. Fastmarkets, which publishes pallet price data, reported western softwood pallet makers seeing a seasonal uptick in demand as holiday retail sales picked up in late 2024.

The timing varies by region and crop, so watch your own market. If your usage is steady, booking ahead of your region's busy season can help.

Heat treatment

Heat treatment adds a production step. ISPM 15 heat treatment means holding the wood at 56°C at the core for at least 30 minutes, in a chamber, under the program the American Lumber Standard Committee administers, with producers enrolled through an ALSC-accredited inspection agency. That takes kiln time, energy and third-party oversight, so heat-treated pallets cost more. The current heat-treat adder is $1.00–$1.50 per pallet (as of October 15, 2026).

Heat treatment is common but not universal. In the Virginia Tech survey, 38 percent of new wood pallets and 28 percent of recycled pallets were heat treated in 2016. Only order it if you need it. See heat-treated pallets and ISPM 15.

Grade and spec

The tighter your spec, the fewer pallets qualify, which is why higher grades carry higher prices. A recycler sorting a load of cores gets only so many pallets with no repairs and bright wood. Current delivered ranges for full truckloads of 48x40s (as of October 15, 2026):

Pallet	Delivered price per pallet
Recycled Grade B	$4.75–$6.75
Grade A	$6.75–$8.75
AAA	$8.50–$10.50
Recycled block	$6.25–$8.50
New	Quote only (follows lumber)

Grade names aren't standardized across the industry. Suppliers grade in different ways, even in the same region, so compare quotes on a written definition. See pallet grades explained.

What you can do about it

• Watch lumber. Because lumber changes tend to reach pallet prices within a few months, a lumber run-up is a signal to lock pricing or buy ahead.
• Buy full truckloads. One freight charge spread over a full trailer lowers the freight cost per pallet.
• Spec only what you need. If Grade B works for your loads, paying for Grade A or heat treatment you don't need is wasted money.
• Plan around the busy season. Order earlier when your region's produce or holiday demand starts.

FAQ

What is the biggest factor in pallet prices?

For new pallets, lumber. Raw materials are the largest cost in pallet manufacturing, and in our analysis of BLS data since 2007, lumber price changes tended to show up in pallet prices within roughly one to three months.

Why do recycled pallet prices change?

Recycled pallets depend on the supply of used pallets, called cores, plus the labor to repair them and the fuel to collect them. When cores get scarce or collection costs rise, recyclers' costs rise, which tends to push recycled prices up.

Does diesel affect pallet prices?

Yes. Diesel drives freight costs, which are part of every delivered price, and recyclers also spend fuel collecting cores. Pallet Forecast tracks the BLS No. 2 diesel and long-distance truckload price indexes for this reason.

Are pallets more expensive at certain times of year?

Demand can rise during regional produce harvests and around holiday retail peaks, which can tighten supply and raise prices. The timing depends on your region.

Where can I see where pallet prices are heading?

Pallet Forecast publishes a monthly price outlook built on BLS data, and current delivered ranges on the prices page.