The change in physical properties of wood pellets, with a focus on particle size distributions due to pellet breakage and attrition, was studied in a large-scale (∼450 ton/h) transportation system. Critical locations with a high probability of breakage through the whole transportation system were chosen and sampled to study the effect of transportation system design and operation on the mechanical properties of pellets. Bulk density, mechanical durability, moisture content, and particle size distribution of pellets were characterized for each sample. Analysis of variance showed that there were significant differences between the percentages of small particles (< 5.6 mm) in the samples taken at different locations, especially at one with a vertical free fall of 7.8 m. On average, this relatively long drop increased the proportion of particles < 5.6 mm in the samples from 8.73% to 14.09%, and that of particles < 3.15 mm from 4.82% to 9.01%. Moreover, the measurements showed a wide deviation in the mechanical durability values, between a minimum of 90.8% and a maximum of 98.7%, which were not correlated to the sampling points but related to pellet properties. It can be concluded that pellet transportation systems require more dedicated design strategies to prevent breakage and attrition.