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Crating Company Focuses on High Margin, Specialty Containers, Service
Caseworks Crating & Shipping: Arizona company focuses on high margin, specialty containers; Caseworks Crating & Shipping also provides a wide array of services for its customers.
By Thomas G. Dolan
Date Posted: 4/1/2008
TUCSON, Arizona — Lester Weinman, president of Caseworks Crating and Shipping, runs an unusual business. His company builds custom crates ranging from small containers to ones that are big enough to ship a 57-foot-long airplane wing and anything in between – fine art and heirlooms, furniture, motorcycles and more.
Lester got into this business through an unusual route, too. He founded a business in 1984 that manufactured hotel furniture. “We would crate and ship our furniture in small quantities, such as sample rooms,” Lester recalled, “but we found the local craters were unreliable, so we started making the crates ourselves.”
That was in 1987. Lester later hired a salesman to market the company’s crate manufacturing capabilities, and it developed into a little niche of specialty shipping crates. Then came 9-11. People stopped traveling, and Lester’s hotel business dropped off by two-thirds. Lester and a partner sold the equipment and building and bought out three other partners, and Lester and his other partner kept the crating business.
“We had already found that the production crate market was a bit competitive, so we decided to go after the smaller quantity specialty crate with the larger margin rather than the other way around,” said Lester. “We developed our business around that philosophy.”
Caseworks has annual sales of about $1.2 million. Lester’s extensive customer base includes accounts in industrial businesses, electronics, medical, aerospace, art galleries, security, retail, recreation, government agencies, liquidators, and online auctions.
Caseworks employs 10 workers. The company has a shop of about 12,000 square feet.
Although Lester left furniture making behind, he brought with him the same kind of woodworking craft. “Most of our crates require some kind of custom woodworking,” Lester said.
Lester learned some things about the container industry the hard way, through trial and error. “We once sold to a large government agency,” he recalled. “We sent a professional quotation and delivered it just the way it was specified.”
The agency was not satisfied, however, because it had not planned how to lift a 140-pound cargo into the top opening of the crate. “We could have come back and said, ‘You didn’t read the quotation,’ ” said Lester. Instead, he acknowledged the miscommunication and modified the crate with side panels for easy loading. “We always take care of the customer, and he’ll come back,” said Lester. “That’s our philosophy. We’ll go to the ends of the earth to deliver good customer service.”
Lester was called on another occasion to quote a job that initially had been awarded to another crate manufacturer. The customer sold a CNC milling machine about 6 feet square and 8 feet high. When the crate arrived, the side panels were too short.
“The crate maker wanted the customer to dismantle the machine to fit the crate and thought he was an idiot because he would not,” said Lester. “He…didn’t have our philosophy for being successful: you have to treat the customer as king. Everybody says it, but not everybody does it.”
Issues of accessibility and weight are very important in designing a wood container, Lester said, and he’s learned to ask the pertinent questions up-front. “Weight is important not simply for the package but the crate itself,” he explained. “If the top panel weighs 120 pounds, we’ll suggest maybe having two panels of 60 pounds each, which makes it easier to handle.”
The crates manufactured by Lester’s company include all hardware, such as casters, hinges, handles and locks, as well as foam cushioning.
Lester’s company is equipped with a variety of lumber remanufacturing equipment. The shop has radial arm saws, a pin router, a variety of Safety Speed panel saws, two bandsaws, two CNC stops for the radial arm saws, and Senco and Delta pneumatic nailing tools.
The company recently added a Baker Products notching machine. “I noticed some of my guys were cutting notches with a worm-drive circular saw,” said Lester. “They said, ‘Don’t bother me. This is dangerous.’ ” That worried me. We’ve never had anybody injured.”
It led to his decision to purchase the Baker Products notcher. “When you’re making square corners by hand, they’re not as strong,” said Lester. “They can splinter or crack. The Baker notcher makes beautiful notches. and it takes five minutes rather than half an hour for the job. And you have to put two hands on the button so your hands are not near the cutting area, and it’s totally safe.”
“We hire experienced, skilled workers,” Lester said. In his market area, the average crate worker earns $7.50-$9 an hour. “We start at $9 and go up to $15.” Employees are allowed to work flexible schedules between 5:30 a.m. and 5:30 p.m.
Lester hired a computer programmer to design proprietary software for designing crates and containers. The software produces a professional quotation proposal in three pages. The first page lists the terms, including the price, freight amount, and other details. The second page is a bill of all the materials, including size, quantity, and weight, along with instructions as to methods of fastening or locking. The third page displays an illustration of the container.
“This software took three to four years to develop and cost $65,000,” Lester said. It has been worth it, however. “Now it takes about five to 10 minutes to design a complicated crate and two or three minutes for a more basic one.”
That is quite a feat since most of the company’s crates are custom designed. “On our Web site, we’ve had 20 to 30 basic crates with standard prices, but we have not sold more than 100 of those in the past four to five years,” said Lester. “When we talk to a person, we find out his needs, whether it’s a big machine, a windshield to a car, a TV, or a painting. We’ll provide the foam and packing to protect it.”
Lester believes he offers a service unlike anyone else, so he charges for it too. “If someone is shopping for price, I’m not going to beat the competition,” he said. “I normally charge 10 to 40 percent higher than the competition. When you’re building a shipping crate, the end result is you want to get the package safely to its destination. There are all kinds of contingencies you have to prepare for.”
A recent potential customer needed a crate to ship a machine valued at $170,000. Lester’s price was $4,100. “My price was very high, and he felt he could find someone to do it cheaper. I told him I understood completely. But, from my point of view, I thrive on having no problems. If the product is damaged, his customer is going to be mad at everybody – me, the manufacturer, the trucking company. It takes an enormous amount of time to file a claim to satisfy the customer after it’s too late. I’d rather take care of him in the beginning.”
Lester’s prices vary greatly because the crates are custom and differ widely. Nevertheless, prices average about $705.
“In the hotel furniture business, if someone wants a cheaper product, you adjust by using cheaper materials. So, a nightstand might hold up for three years instead of seven. You exchange quality for price. But I found I couldn’t do that in this business. I learned from experience, the hard way.”
Lester recalled a customer in the early years of his business who purchased a box to ship a family heirloom from Tucson to Michigan. “The box got crushed, and the shipping company dropped it off on the lawn in the snow. For a savings of $100, that’s not worth it.”
Lester continues to learn. Another market he sells to is businesses that exhibit at trade shows and need a crate or container to ship their display. “Our crates are reusable and can last between five and seven years if they’re taken care of,” he said.
One problem Lester has noted is that many crates only provide two-way entry for a forklift. When they are stored in a warehouse, a forklift operator may have to jab or poke it with the tines in order to maneuver it into a position to be able to lift it; those actions can damage the container. To overcome that challenge, Lester usually builds crates to allow four-way entry.
“Another example,” Lester explained, “is that most companies will put a bolt through the casters and put a nut on it. This is said to make it stronger, and we used to do that ourselves. But the problem is that when people at the trade show rip off the caster, they also take out the floor of the crate. So now we lag bolt the casters from the outside, so that the casters can be ripped off with no damage to the crate.”
Tucson is home to businesses that buy surplus airplanes and sell the parts. “We live in the airline junkyard capitol of the world,” said Lester. He services some of the companies, supplying crates to ship just about every part of an airplane. “Last year we crated six C-10 cargo plane wings that were 57 feet long and 17 feet wide. We’ll crate anything as long as somebody can lift it.”
He also helps customers with shipping throughout the world. Lester is a licensed freight broker and has business relationships with transportation companies, so he can provide shipping as well as the crate. “Last Thursday, we got a call from a lady who was not happy with her previous shipper,” he said. “She needed some GM motors to go to Hong Kong. We sent two by air freight and four by ocean.”
It is not just large cargo that poses a challenge for crating. Recently, a Las Vegas company did a proposal for a casino in China. The proposal and other promotional materials were contained in eight exotic boxes, each 20x36. They were shipped in two master crates. The total cost was $24,000, about 10-12 times the normal cost. “We got this job over the Internet,” Lester said. “People have trouble finding the kind of services we offer.”
There are competing crate and container businesses in Arizona, Lester acknowledged, but some of his business comes from far outside the state. Tucson has three other container companies, and Phoenix has 20-30. “But we get business from Phoenix all of the time,” said Lester.
“And when I get a call from New York City, 2,600 miles away, I figure there must be many more craters much closer,” he added. “What I believe is that they’ve seen our Web site, and we make it easy for them. He’ll get the quote within a short period of time. We’ll make the crate tomorrow to ship tomorrow if needed. I’ve never lost a sale for not being able to deliver on time. For local companies, we also provide packaging services.”
Lester and his wife, Debbie, have two grown children, Jeffrey and Wendy. “We now have six dogs to compensate for the children gone,” Lester said.
A self-styled ‘workaholic,’ Lester gets to Caseworks about 8 or 9 am and often works until 2 a.m. — six days a week. “A lot of people enjoy things like football, golf, or fishing,” said Lester, 64. “But I’m glad to get out of bed in the morning to come to work. This is my fun.”