Grade A vs grade B pallets: what the words mean in a contract

§1Side by side

Grade A / #1 and Grade B / #2 compared on the points a buyer negotiates
Point	Grade A / #1	Grade B / #2
Repairs	None or few	Repaired stringers, plates or replaced boards allowed
Appearance	Near new	Mixed
Price	Higher	Lower
Receivers	Some ask for it by name (Walmart WFS asks for GMA standard Grade A)	Internal use; receivers that don't specify

§2Define it in writing

List what each grade allows: number of replaced boards, companion stringers, plates, board-thickness mix, stains. Inspect against that list. A supplier will sort to the definition you write down.

§3Match your receivers

If a customer's routing guide names a grade, use its exact words in your spec and keep a copy of the version you used. Walmart's WFS guide, for example, asks for GMA standard Grade A pallets; Kroger's guidelines ask for a GMA 40×48 pallet and list pooled pallets first. See receiver requirements.

§4Test it on your numbers

The calculator opens with both options loaded. Enter your own quotes; nothing is pre-filled.

Trips per yearPallet shipments per year on this flow.

Years

Discount rate (%)

Your numbers. Every field starts empty: no vendor prices are assumed.
Input
Delivered price per pallet ($)From your supplier's quote, including delivery.
Disposal / handling per trip ($)What you or the receiver pay to get rid of it.
Buyback credit ($)Credit per pallet from a buyback program, if any.
Pallet weight (lb)Weigh a sample.
Freight ($ per cwt)Your LTL rate per 100 lb, if you pay by weight.
Freight legs per tripLoaded legs that carry the pallet's weight.
Cost per trip	n/a	n/a
Cost per year	n/a	n/a
Net present cost, 3 yr at 8%	n/a	n/a

Enter a price (or a pool's fee) in at least one scenario to compare.

How these numbers are calculated

One-way:      CPT = P + D − S
Closed loop:  N = min(L_trips, 1/ℓ)
              CPT = (P − S_end)/N + R_c + H + ℓ·P + Rep
Pooled:       CPT = F_issue + r_day·d + F_transfer + ℓ·F_lost + F_admin/trips
Plastic:      closed loop + W (wash) per trip
All:          + tare freight T = w × ($/cwt ÷ 100) × legs
Annual        = CPT × trips per year
NPV           = capital at t=0 + Σ annual / (1+i)^t, t = 1..years
Capital (owned loops) = pool size × P, pool size = trips/yr ÷ min(N, 52)
Break-even dwell d* = (CPT_owned − F_issue − F_transfer − ℓ·F_lost) / r_day

Pool size assumes each pallet turns at most weekly. Results are only as good as the inputs.

§5How to decide

Use grade B where nobody downstream specifies a grade, and grade A where a receiver does. Either way, write the definition into the contract.