If you ship to Costco, Walmart, Target, or Amazon, you may have noticed a trend over the last 12 months: Rejection rates are climbing.
It’s not because the pallets have gotten worse; it’s because the receiving docks have gotten smarter. As we move deeper into 2026, major retailers are finalizing their transitions to fully automated distribution centers (DCs).
Here is why your pallet quality matters more now than ever before.
In the past, a human forklift driver might have ignored a piece of hanging plastic wrap or a slightly cracked bottom board. They could manually adjust the load and move on.
In 2026, automated storage and retrieval systems (AS/RS) run the show. These systems rely on optical sensors to measure dimensions and structural integrity. If a pallet has a protruding nail, a broken stringer, or significant deflection, the sensor triggers a stop. The system rejects the load instantly.
For years, the standard "Grade B" (or #2) pallet was the workhorse of the supply chain. However, with the rise of automation, the variance allowed in Grade B pallets is becoming a liability.
Many operational leaders are shifting their specs to Premium Grade A or new "Club Grade" whitewood for shipments destined for automated DCs. While the upfront cost is higher, it eliminates the risk of:
A rejected load is the most expensive mistake in logistics. Between return freight, fines, and labor, a single rejection can wipe out the profit margin of the entire shipment.
Your Action Item: Review your pallet specs against your customer’s 2026 receiving guide. If you are shipping to an automated DC, it’s time to upgrade your wood.
