DES MOINES, Iowa — When Bob Etzel Sr. bought Pallet Brokers, a small pallet repair and recycling business, he was ahead of the curve. It was only 1979, but he believed that pallet recycling could become an important service to manufacturing companies and other businesses that used shipping platforms. In succeeding years, as the pallet recycling industry grew to match his faith in it, Bob’s business grew as well.
The small business that Bob purchased nearly a quarter century ago has enjoyed consistent success, and now it is one of Iowa’s important suppliers of new and used pallets. Now under the leadership of his son, Bob Etzel Jr., the business continues to evolve and grow, adding pallet manufacturing operations, for example. It also has taken an innovative approach to producing pallet lumber.
Bob owned and operated Mid-West Pallet Co. in Kansas City, Mo., but he sold it when his father asked him to come home and join Pallet Brokers. He joined his father in the business in 1995. Bob’s father decided about three years ago to diminish his role in the company and eventually retire, so Bob has taken over full responsibility of the business.
“He’d done well and grown the business to where he was content with it,” Bob said. “But he knew there was opportunity for someone who wanted to be a bit more aggressive, so he told me if I wanted to come and work with him, I would pretty much have a free hand. He was in his middle 60s and didn’t want the growth for himself, but he didn’t mind taking the company further if he had some help. The first year of working together, we nearly tripled our volume.”
Pallet Brokers, which employs 11 workers in its operations, has been especially forward-looking in terms of its lumber production. With a thin kerf portable sawmill, Bob has discovered how to significantly reduce lumber costs. He obtains logs from the urban Des Moines area and surrounding farms and manufactures them into cants on a Wood-Mizer portable band sawmill. The cants are remanufactured into pallet lumber with equipment supplied by Sam Baker.
In the integrated business, the lumber for pallet manufacturing is only a few days removed from harvest. The portable sawmill enables Pallet Brokers to add value to the wood instead of paying another company for the process. Bob has dramatically enhanced his company’s ability to thrive in a very tough market, and using the portable sawmill also provides some significant benefits to the environment.
Ironically, the success of the pallet recycling business led Bob to consider manufacturing new pallets. Recycled pallets have gained so much acceptance in the marketplace in recent years that many pallet-using companies have begun to use both new and recycled pallets, Bob noted. Some times they are used interchangeably or to meet specific requirements.
“Many of our existing customers, firms that have been with us for one decade, two decades, or even longer, were either asking about or actually purchasing both new and recycled pallets,” said Bob. “We pride ourselves on the service we provide our customers. About three years ago we came to the conclusion that if we wanted to continue to offer what our customers needed in today’s market, we had to provide both options.”
Pallet Brokers sells pallets to manufacturing businesses and also to other pallet suppliers. In fact a considerable volume of its production is sold to other pallet suppliers.
Though he realized that providing full service as a pallet supplier meant venturing into pallet manufacturing, Bob did not leap into it blindly. “I spent a lot of time studying magazines like Pallet Enterprise, talking to people in the industry, and looking at equipment,” he said. “I know the industry is competitive, and I wanted to make sure we did this right. The stability of our client base with recycled pallets demonstrated to us that we had a good reputation with them. We wanted those customers to feel as good about the job we were doing with new pallets as they did about us as a pallet recycler.”
The cost of lumber is a challenge for pallet manufacturers, Bob noted. “I originally planned to buy cut stock and assemble the pallets,” he said. “But by the time you buy lumber through traditional channels, the landowner the tree came from, the logger, the mill that processed the log, the shipper, the broker, and everyone else involved in bringing lumber to market has taken a cut. And that doesn’t leave much room for the end user. In a competitive market like ours, you’re only going to be able to make10 to 25 cents on a pallet, and you have to be good to do that.”
Setting up a large sawmill adds complexity and costs for a pallet manufacturer, however, and Bob considered various sawmill machinery and wood processing options. The approach he finally settled on and installed turned out to be striking in its simplicity and unique in its ability to allow Pallet Brokers to be competitive in a very tough marketplace. He found the solution at Wood-Mizer Products.
Wood-Mizer is a leading manufacturer of thin kerf, portable band sawmills. With more than 30,000 units in the field, the company’s customers produce literally billions of board feet of lumber per year.
A Wood-Mizer portable sawmill is productive, easy to operate and very inexpensive compared to industrial sawmill equipment, Bob noted. A Wood-Mizer portable sawmill capable of sawing thousands of board feet per day costs less than a pick-up truck used to tow it, he observed. In addition, a person who operates a machine on a traditional resaw line can learn to mill logs on a Wood-Mizer with minimal training. Bob chose a Wood-Mizer LT-40 Super Hydraulic portable sawmill for his pallet lumber operations.
In order to control lumber costs, many pallet manufacturers buy cants or lumber and resaw the material into appropriately sized stock. With the Wood-Mizer, Bob was able to integrate his business. By using logs for raw material and milling them on the Wood-Mizer, he avoids the added cost of purchasing cants or dimension material. Integrating the business has saved him as much as 25% on raw material costs, he estimated.
Another reason Bob invested in the Wood-Mizer was its portability. Although he is not particularly mechanically inclined, Bob chose a diesel-powered sawmill so he could use it in remote locations if needed. Buying logs and milling them off-site would allow him to leave the slabs behind and eliminate dealing with the residual material, he noted.
So far he has operated it as a stationary sawmill, but the Wood-Mizer LT-40 is easily towed and can be set up in 15 minutes. Bob envisions using it for off-site work in the future. “At some point that could become a very viable option,” he said, “so I wanted the ability to do that.”
Bob buys logs from a number of different sources. He buys a few at a time from farmers and small landowners and also buys truck-load quantities from logging contractors. The Wood-Mizer is set up outdoors in the Pallet Brokers yard. A Bobcat is used to retrieve logs from inventory and take them to the portable sawmill. On the Wood-Mizer, Bob removes slabs, squares up the log, and sizes the cant for resawing. The Bobcat also is used to move the cant into the plant.
The company’s building contains about 8,000 square feet and is located on about five acres of land. Pallet Brokers has 13 trailer vans, but most of them are used for additional storage on the company’s property. Instead of tractor-trailers, the company relies on 24-foot trucks for pick-up and delivery.
Inside, the plant is equipped with Sam Baker machinery to remanufacture the cants into deck boards and stringers. The first stop is a Kent chop saw to cut the cant to appropriate lengths. The sized cant material then is pushed along a section of roller conveyor and stops at a Kent three-head horizontal band resaw system. The Kent three-head resaw has an automated return system, so it only requires one operator. The man running the resaw system feeds it the sized cant material coming from the chop saw or a piece that has traveled back from the return.
Sam was instrumental in helping Bob expand into pallet manufacturing. “He spent hours and hours and hours with me on the phone,” said Bob, advising him about manufacturing processes and machinery. “He kind of walked me through from taking a tree to turning it into a pallet, why you would do things one way and not another way.” Sam also has provided very good service and support, he added.
Finished lumber is stacked manually and moved by pallet jack to a Rayco nailing machine or to work benches where employees are building new pallets by hand. Finished pallets assembled on the Rayco machine are stacked automatically and rolled forward to the shipping dock.
A two-head notcher supplied by Sam is used for notching stringers of four-way pallets. The machine does double duty for recycling: a used, two-way pallet can be put through the notcher, transforming it into a four-way pallet.
The company’s operations are designed to start with the log and turn it into a finished pallet at the loading dock with a minimum of labor. With its efficient manufacturing operations, Pallet Brokers has a capacity well above current production levels.
“This is a very small market for a city the size of Des Moines,” Bob said. “We could manufacture 6,000 or more pallets per day if we needed to, but at present we do a little over 1,000 new units per day. Only three men are needed to do that. We will run the saws for a day, size for a day, and then build pallets. We could probably consistently run up to 2,000 per day with our current workforce. Above that we would have to consider adding people.”
The company manufactures new pallets in such sizes as 36×42, 40×48, and 44×44. Small orders are assembled by hand with power nailing tools while the Rayco is reserved for large runs. Bob purchased the Rayco used and has been operating it about two years. The Rayco can assemble about 1,500 pallets in eight hours, according to Bob.
Pallet Brokers produces about 1,000 recycled pallets daily. It repairs and resells pallets and also remanufactures pallets from reclaimed components. All repairs are made with reclaimed lumber. Some common pallet sizes that Pallet Brokers recycles are 32×32, 36×36, 36×48, 36×96, 40×48, 42×44, 42×48, and 48×48.
The primary machine in the company’s recycling operations is an Industrial Resources Pass Two, a disc-type pallet dismantling machine. Unlike some other pallet recyclers, though, Pallet Brokers does not send reclaimed material to a trim saw station to be cut to the appropriate length. The recycled lumber is sorted by dimensions, Bob explained, and then used as stock for pallet repairs and remanufacturing. A deck board that is too long, for example, is nailed to the pallet and then simply trimmed to the right length with a hand-held circular saw.
Bob uses a contractor to grind waste material on the premises of Pallet Brokers. He gives the contractor scrap from the recycling operations but sells him the waste from the pallet lumber operations. The contractor markets the grindings for livestock bedding and also makes colored mulch.
The Wood-Mizer LT-40 not only helps Pallet Brokers to be profitable, it makes a contribution to conserving natural resources. According to the U.S. Forest Service, forest products companies that use trees from urban areas and surrounding farms help to reduce greenhouse gas emissions; the reason is that unharvested trees, when they decay or burn, release carbon into the atmosphere. Buying small quantities of logs from sources in urban areas, farmers and landowners also reduces to a certain degree the need for large-scale harvesting of rural forests; it also provides additional income to farmers and woodlot owners, reducing the financial pressure on them to convert forests to agricultural land. Without companies like Pallet Brokers using logs that come from urban areas and small farms, the wood could wind up in a landfill, burned, or used for lower-value products with less potential for reducing carbon.
Improving production efficiency and reducing costs can help a company compete and serve its customers. Pallet Broker’s use of a portable band sawmill demonstrates how innovative thinking can improve a company’s operations and benefit the environment as well.
