Purpose: This paper seeks to frame and model the environmental issues and impacts associated with the management of pallets throughout the entire life cycle, from materials to manufacturing, use, transportation to end‐of‐life disposal.

Design/methodology/approach: A linear minimum cost multi‐commodity network flow problem is developed to make pallet‐related decisions based on both environmental and economic considerations.

Findings: This paper presents a review of the environmental impacts associated with pallets by life cycle stage. The types of materials used to fabricate pallets, the methods by which they are treated for specific applications, and various pallet management models are described with respect to embodied energies, toxicity and emissions. The need for companies to understand the cost, durability, and environmental impact tradeoffs presented by pallet choices is highlighted. The paper introduces a model to assist in choosing both how pallets are managed and the material they are constructed of that balances these tradeoffs.

Originality/value: There is limited research on the environmental impact of different management approaches of large‐scale pallet operations. The proposed model and approach will provide companies seeking to engage in more sustainable practices in their supply chains and distribution with insights and a decision‐making tool not previously available.