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Wood Container Technology Coalition — Part II
Wood Containers Plan for Tomorrow
By Ed Brindley Jr.
Date Posted: 10/1/2002
ATLANTA, GA—Last month I tried to capture a glimpse of the excitement and enthusiasm that permeated the air at the Wood Container Technology Coalition in Atlanta last May. I decided to make this story into a two part piece because the material presented warrants it. Few wooden pallet and container related meetings I have had the pleasure of attending have had a more varied program with topics that are any more versatile. I will attempt to capture the essence of their meaning in part 2 of the article on this Wood Container Technology Coalition meeting.
Before getting into the information shared, I want to recognize Mark Halverson of the American Plywood Association for doing such an outstanding job as Master of Ceremonies throughout the meeting. I hope that he agrees to take on this responsibility again next February at the Chicago Coalition meeting. The Coalition decided to hold its third meeting in conjunction with the PROMAT Materials Handling Meeting, the largest international materials handling related show in this hemisphere. The four day PROMAT show at the McCormick Center will run from February 10-13. The Coalition will officially kickoff by attending PROMAT on its last day and then continuing with its full program agenda on February 14 and 15. More program information for next year’s meeting will be available in the next three issues of the Pallet Enterprise. Any reader who has not yet attended a Coalition meeting and is interested in wooden containers should mark February 13-15 on the calendar. If the next meeting is anything like the Atlanta one, you will be glad you attended.
Customer Related Focus
In an effort to relate better to customers and help suppliers understand user logic, many pallet and container meetings in recent years have attempted to get customers involved in the program. In Atlanta, John Boner and Michael Lomack of Emery Forwarding provided an overview and the essentials of freight forwarding. Mostly an air freight carrier, Emery focuses on business-to-business global shipments. When talking with global users, the term 3PL (third party logistics) often arises. Emery is a 3PL provider for IBM, HP, Dow Chemical, and GM. 5.3 million annual shipments bring Emery $2.6 billion in sales. With over 500 offices in over 200 countries, they use air freight, ocean services, customs brokerage, and expedited services. Dayton, Oh. is Emery’s primary U.S. sortation location.
For Emery, its chargeable weight is the greater of a shipment’s actual weight and its dimensional weight (length x width x height/166). If a shipment’s density is less than 10 lb/ft3, then its freight is charged by volume or dimensional weight.
Origin service centers look for EU wood packaging material markings on pallets, crates and containers. A shipment not meeting EU regs is held at its origin. Emery has on-line tools at its Website (www.emeryworld.com), including "how to determine density," "pallet and container specifications," and "aircraft fleet information."
Wood Container Standards
Alfred McKinlay, a consultant on packaging and handling and chairman of various ASTM and International Standards (ISO) committees, presented a very thorough overview on the importance of standards to the wood container industry. His typed nine-pages of notes is valuable resource material to anybody desiring to know about standards.
A standard is a common language that promotes the flow of goods between buyer and seller and protests the general welfare. Thousands of product standards exist in society. A fundamental part of our daily lives, standards open channels of communication and commerce, promote understanding of products, ensure compatibility, enable mass production, and most importantly form the basis of achieving health, safety, and a higher quality of life.
At least five kinds of standards, based on the degree of general agreement needed for their development and use, include: company standards, consortium standards (e.g. AIAG), industry standards, government standards (e.g. OSHA or EPA), and voluntary consensus standards. Consensus standards developed by representatives of all sectors that have an interest in the use of the standard are often considered as the most technically sound and credible. They are often used as the basis of commercial and regulatory action. Examples include ASTM International, the American Society of Mechanical Engineers (ASME International), and the National Fire Protection Association (NFPA International).
The U.S. is different from many countries where typically one organization is designated as the major standards developer, and that organization is closely tied to the government. In the U.S. the federal government is backing away somewhat from standards because it is replacing many of its own standards with voluntary consensus standards.
The U.S. essentially has two broad categories of standards with regard to regulation — mandatory and voluntary. Mandatory standards are set by government and can be either procurement or regulatory. Participation in voluntary standards is voluntary, and they are usually intended for voluntary use.
Alfred’s material is so extensive that it will make a good article for another issue of the Enterprise. The focus here is on a few packaging standards highlights.
Most packaging standards in the U.S. are developed by the D-10 Committee of ASTM. These standards include a number of specifications (such as wood crates), some guides (such as how to apply steel strapping), and several practices (such as performance testing of shipping containers). Packaging testing standards are also developed by the International Safe Transit Association (ISTA), and other packaging related standards by trade associations (such as TAPPI). ISTA is the only U.S. organization that certifies commercial packaging when successfully passing tests in ISTA certified labs. To do any justice at all to the ASTM standards related to wood containers would require too much space for this overview. Look for our future article to provide indepth information on this important topic. Readers should keep in mind that many people have survived in the wooden pallet and container industries without knowing much if anything about industry standards. But the road to survival gets a little more difficult each year. If you want to take the more professional approach to serving customers, knowing standards and how to protect your customers’ best interest is probably a smart business policy.
Military Response to Export Requirements
Fred Teillack, from the office of Assistant Deputy Under Secretary of Defense for Supply Chain Integration, asked, "Why are we here?"
His answer was: (1) Comply with European Union (EU) and International Plant Protection Convention regulations; (2) Enhance government and industry partnership; (3) Ensure consistent and complementary planning efforts; (4) Share and realize expectations; and (5) Avoid frustrated shipments.
For the Department of Defense the phytosanitary issue is a global challenge. The DOD has a massive and complicated supply chain and it has a plan for compliance with EU measures and standards for non-manufactured wood products. The DOD’s goals involve procurement, receiving (in-country), inventory, shipping, and transportation of any item containing wood. Procurement contracts have been modified. Existing inventories will be cleansed. For this purpose they have purchase two wood heat treatment chambers. Fred confirmed that shipping strategies regarding wood items are going to be enforced. He admitted that considerable communication and training are required at all military levels.
Fred confirmed that the military will require heat treatment of all wooden packaging. Since they often do not know which pallets and containers will and which will not be exported, the military will be phasing in heat treating for all pallets and containers. So, if you deal with the military, you should be preparing for heat treating.
Two Panel Discussions — IPPC Standards and Marketing Reusable Systems
Some of the most potentially interesting topics at many pallet and container meetings in recent years have been featured using panel discussions. Few program methods offer any more promise but sometimes fall short of their delivery targets. This Coalition meeting proved to be an exception to this as well. The two panel discussions included good information from informed and concerned people.
The first panel focused on wood packaging export regulations. John Conway of the NWPCA moderated this discussion. Panel members included Jason Robison of Timber Products Inspection, David Lamb a USDA/APHIS Export Specialist, and Frank Meek of Orkin Fumigation. Each panelist made a presentation and entertained questions from the audience. Sometimes participants will sit back and show limited interest when the Q&A part comes around. This active panel discussion lasted almost two hours, and nobody seemed anxious to end the interchange.
Items noted included the IPPC standard which was approved in March 2002 and included hardwoods along with softwoods. While this standard is not a regulation, it is serving as the model for each country to develop its own version. This is an ongoing saga that promises to stretch into and probably through 2003, probably well beyond. It is expected that many EU countries will approve their standards earlier than many other countries. This is of particular interest to U.S. manufacturers since we will have to export according to the receiving country’s requirements. U.S. requirements will impact incoming shipments, which are not under the direct control of our domestic industry. A wise pallet and container supplier will want to keep up with U.S. standards as well since customers may want to use their suppliers as information sources.
It was pointed out that both heat treated and methyl bromide treated products could in theory be reinfested. But that does not seem to be of much concern at this point, since treatment should eliminate the specific problem of infestation at the origin. Readers may want to know that our staff is preparing a special report on methyl bromide treatment, which has been a topic of considerable interest lately on the Pallet Board part of our Web site. This special report will be a Pallet Profile Exclusive that will be distributed to subscribers to the Pallet Profile Weekly. Keep an eye out for information in the next issue of the Enterprise about how you can get your copy of this special report.
The second successful panel, held on Saturday morning, featured reusable wood container marketing. Rick Lane of Tuscarora moderated the panel that included Drew Graham of Hardy-Graham, Jim Bonde of Klimp Industries, Roy Gavert of Kiplivit, and Paul Pascarella of The Nelson Company. Panelists discussed leveraging reusable wood containers against competition and how to sell a reusable system. They noted political pressure to eliminate waste and conserve raw materials. The U.S. is behind Europe, particularly Germany, in this regard. The key is to reuse, not necessarily recycle. We are actually ahead of Europe in many ways when it comes to pallet recycling, but they are ahead in systems that reduce the need for recycling.
In 2000, material handling containers, which includes wooden pallets and containers, was a $68 billion industry in the U.S. Its estimated growth is 4-6% a year, and according to the Warehousing Education and Research Council the percentage of containers that is reused has grown from 4.9% in 1990 to 25.1% in 2000. That ten-year growth is significant in anybody’s book. In spite of the good value in both reuse and wood, reusable wood systems are not an easy sell. They are typically a capital investment instead of an expenditure. This makes it different from both a selling and an accounting perspective.
Marketing reusable wood packaging systems requires a different mindset. Our industry is in the service business, not the container business. The purchasing agent is often the last person we want to talk with about this issue. Getting to the right person is a key element in the process. If the purchasing agent (PA) is not willing to carry the ball, one must get around him to the correct person, but it is often wise to make the PA the hero if possible. Panel members agreed that third party logistics is the answer to making dollars in the long run with reusable containers. Once a supplier provides a valuable service to many departments within a company, that supplier is difficult to displace, but it will typically require doing plenty of homework, being well prepared, and delivering a convincing argument. Returnable systems are not an easy sell, they require an investment in time and energy. Know your competitor and his selling points.
Ask anybody in the wooden container industry and they will say the same thing. Wood is the way to go! Wood has many pluses, but unfortunately conventional wisdom in the real world often says otherwise. The advantages that wood has over plastic include: (1) Design flexibility — no molds, dies or fixture changes are required. (2) Repair — parts are easy to repair or replace. (3) Disposal — Wood is both recyclable and biodegradable. (4) Insurance cost — fire insurance costs are higher for plastics. (5) Storage space — foldability of many wooden containers requires less space than most plastic containers. (6) Labor handling costs — wood requires less time to construct and disassemble. (7) Cargo space — more space for equivalent outside dimension. (8) Temperature — wood is more temperature tolerant. (9) Strength — tests show that wood containers can be more rugged. (10) Conductivity — wood offers greater protection from heat and cold. (11) Marketing — flat surface offers easy identification options, while paint on plastics often wear or wipe off. (12) Weather resistant — wood is less susceptible to leakage and will absorb moisture, while moisture condenses on plastic.
Paul Pascarella stated it well, "There is a problem trying to change the overall policy of a customer, but it brings dividends to all involved. Third party logistics sounds like a lot to order, but it ranges from total involvement with a customer’s systems to outsourcing some or all of the reverse logistics functions." All panelists stressed the need for more promotion of wooden packaging.
Sourcing Off-Shore Wood Products
Louis de La Valette of Worldwide Building Products Corp. spoke about the availability of pine plywood from Brazil. Seventy-five pine plywood mills in southern Brazil are now producing both US agency certified and non-agency certified plywood from a sub species of Southern Yellow Pine. There are 15 million acres of these forests in southern Brazil. Eighteen of the mills are in a Brazilian association for quality. They will produce made-to-order thicknesses, length, and width. Brazilian plywood has become much more prominent in just the last couple of years. Louis emphasized that non-agency plywood is price stable, unlike the plywood markets we are accustomed to.
The complexities of international trade create the opportunity for problems seldom encountered when dealing with domestic plywood suppliers. Paperwork is complex, shipments are more often delayed, shipping damage more prevalent, and claims can be tricky to negotiate. It is in the buyer’s best interest to deal with an experienced, reputable importer who can handle these issues.
Louis said that Brazilian mills peel veneers a little thinner than in the U.S. He was unaware of a completed study comparing U.S. and Brazilian plywoods. Most Brazilian plywood does not come from certified forests.
The most common Brazilian grade available is a C+/C grade. Their C+ grade has knot holes filled with putty and sanded. The 1/2" Brazilian plywood is a five-ply product, and the 5/8" plywood has from five to seven plies.
University Packaging Programs and Wooden Packaging
It is said that unfortunately wooden packaging is almost unknown in most university packaging programs. Dr. Tim Weigel, assistant professor from Clemson University, is to my knowledge the only packaging school faculty in any packaging program with a solid background and interest in wood packaging.
Clemson is the only Southeastern university with a packaging program. Its emphasis is on food packaging. It has nine faculty with 200 students and a master’s degree program. Other packaging programs exist at Michigan State University (the best known and most prominent), California Poly State, Indiana State University, Rochester Institute of Technology, San Joe State, University of Illinois at Champaign, and University of Wisconsin at Stout.
To answer the question what do packaging majors learn about wood containers while at school, Tim stated, "Mostly almost nothing."
Tim gave a Clemson point of view. Wood is a major packaging material. Universities should hire some faculty with a background in wood science and possibly include wood packaging in graduate classes. Industry should fund basic research such as short courses in wood packaging.
Clemson has a Sonoco Packaging Science Laboratory which they would like to expand for wood packaging courses and for wood research. Tim suggested that Coalition participants could help him and his program by talking with them, providing program support with guest speakers, supplying wood container samples, sponsoring internships/coops, and assisting with workshops and seminars.
The Coalition plans to continue building on what it started here. It hopes to have Dr. Diana Twede to speak in Chicago next February. Diana is a well known leader from Michigan State’s established packaging program and is in the process of writing a book on wooden packaging. Keep posted for the upcoming February Coalition meeting if what you have read the last two months about this May’s Atlanta meeting interested you.