RANCHO MIRAGE,
This year’s annual meeting had a lot of things going for it in addition to the weather and proven location: a strong slate of speakers and a very good turnout from members.
Clearly, the efforts of the association staff and members to revitalize the organization the last five or six years have gained momentum. The association added 13 new members in the past while losing only two, and one of those two plans to rejoin as soon its financial position improves. Activity at the association’s Web site (www.westernpallets.org) also has increased, according to
A common theme at the meeting was the importance for returning attendees to welcome new members and take time to get to know them. The WPA wants to ensure that its organization is the most friendly association in the industry and does not fall into the trap of becoming an ‘old boys’ club.’
Pat Sherry of NEPA Pallet & Container was elected president for the coming year, and Kelly Bennion of Challenger Pallet was tapped for vice president. Ken Conklin was re-elected secretary-treasurer. Tom Thayer was elected to a three-year term year on the board of directors; elected to one-year terms were Jay Brickell of Viking Engineering, Jeff Calavan of Northwest Hardwoods, Ian Carter of North American Industrial, Jim Whiteside of Vandermeer Forest Products, and Tye Winsor of Metolius Forest Products.
Pat recognized outgoing president Greg Vipond of
As usual, there were plenty of opportunities for golf at some stunning
The Changing World
Ed has seen a lot of changes in the pallet industry. Of the core group of 22
Ed visited his first pallet company in 1967, Potomac Supply in
Change has been profound. In the past 10 years manufacturing technology has not changed dramatically, but there have been other new developments, such as pallet leasing and the introduction of colored mulch. Global phytosanitary rules have become an important issue in recent years.
“More and more the pallet industry finds itself responding to things that are outside its normal sphere of control that are related to our products and our customers,” said Ed, referring to issues like leasing and the global phytosanitary rules.
“Leasing has been very positive in some ways,” he said, pointing to the growing importance of third-party pallet management services. “It shows what is important to customers. They want a solution that is not going to be a hassle for them. Networking and pallet management are going to be issues of the future.”
The pallet industry will be more involved in managing pallets and unit loads in the future, according to Ed. Besides the operational aspects of pallet manufacturing and recycling, pallet suppliers will find themselves involved in managing pallets. Pallet management services, provided by establishing cooperative networks with other pallet companies, will have to be seen as seamless to the customer.
In the future, there will still be a need for pallets to be made and repaired, Ed noted. “The operational needs are still there. Will you be out in the cold in 10 years time? No, not if you are really good at what you do.”
Market acceptance of block pallets suggests that they will become increasingly important in the future, Ed noted. He paraphrased the comments of a CHEP executive from another meeting. “Why do you think we have block pallets? We have block pallets because our customers want block pallets. They got a taste of block pallets, and they like what they see.”
“If I was going to be looking at my radar screen, pallet management and networking – that’s it,” Ed remarked. “There are three North American pallet industry trade associations, and all of them are in this room today. Networking is extremely valuable.”
Ed referred to a recent study that estimated 64-71 million pallets are exported annually from the
The lumber market has been very tough recently, he observed, and there are no longer any sacred cows when it comes to buying lumber. In the past, pallet companies would never have considered buying imported material, but things are changing. South American lumber may be an option for pallet companies that are close to ports. “I see a greater international impact on our lumber supply in the future,” Ed remarked.
In discussing technology, Ed said his gut instinct is that radio frequency identification (RFID) is here to stay. Pallet manufacturers probably will not be involved in installing the tags on pallets in the short run, he believes, although the new supply chain technology certainly involves their products.
Attending trade associations meetings is important in building relationships with other pallet companies and networking, Ed noted. “The golf is nice, the dinners are nice, but the most important thing you do is build relationships,” he said. “When you get back home and pick up the phone and share problems and solutions, and if we help customers manage their assets, that is going to be part of a long-term cure to help keep our industry viable.”
“Wooden pallets are not likely to lose their place in the marketplace because they are made of wood,” Ed concluded, “but we may lose out on individual niches if we don’t provide customers with the services that are of most value to them.”
Salvage Timber
Opportunities
Chris Zimney of the California Department of Forestry and Fire Protection talked about
Environmental and regulatory pressures have led to an inadequate cut and a lack of thinning that has fostered wildfire, he said. “
In spire of the hurdles facing the forest products industry, however, Chris believes there are “some really neat opportunities in the future.” The opportunities revolve around a managed harvest of small trees in the forest understory as part of wildfire prevention and also salvage logging of dead timber in three counties in southern
“I think there are really some unique opportunities for San Diego, San Bernardino and Riverside counties to get active” in recovering lumber from this resource, said Chris. Some pallet companies already are involved in harvesting or using this source of timber, including Century Pallets, Southland Forest Products, Pico Rivera Pallet, and Pallet Masters.
The Southern California Biomass Disposal Assessment, currently being written, indicates that 30 to 70 million board feet of salvage timber will be available annually, depending on merchandisability. “With the larger sizes, the shelf life is about 18 months,” said Chris, so companies must act quickly if they want to seize this opportunity.
For the Department of Forestry, one challenge is to get landowners with dead timber connected with loggers who will remove them and other businesses that want to use the wood. “As everybody knows, this is dead and dying timber,” said Chris. “It’s the rotten apple concept. It’s sitting there with a limited shelf life.” Given the pallet industry’s flexibility in using low-grade lumber, he believes that pallet companies may play a greater role in using this resource.
“What one mill down there is doing right now is cutting old material and trying to recover relatively low-grade utility material out of it,” said Chris. Grants are available to help companies use this resource, and he encouraged those in the audience to explore opportunities to obtain federal grants for the purpose of setting up small sawmills in the region.
Trucking Shortages
Gary Amoth, president of Gary Amoth trucking in Buhl,
Driver shortages are a real problem for trucking companies. “The driver pool is dwindling at an alarming rate,” said
Shippers and receivers can help ameliorate the drive shortage by becoming more carrier friendly, including allowing flexible shipping and receiving hours, said
“Freight rates are going up,” he concluded, “so be sure to pass them along.”
Phytosanitary Rules
Bruce Scholnick, president of the NWPCA, talked about global phytosanitary rules for wood pallets and packaging.
Countries are implementing international standards for phytosanitary measures. “But what is troubling is the language they add,” said Bruce. For example,
The debarking issue is a major problem for the pallet industry, according to Bruce. The European Union requires that wood packaging must be made from debarked round wood, and that dunnage similarly must be made from bark-free round wood. These requirements will drive up pallet costs, Bruce observed.
“They are going to implement this in all 25 of their countries the first of March if we don’t do anything about it,” he said. “There is nothing in the standard that suggests that you have to have debarked or bark-free wood. There is also a statement in the standard that says that a country cannot ratchet the requirements unless there is valid and reliable scientific justification. And according to the Animal and Plant Health Inspection Service (APHIS) and the Canadian Food Inspection Agency, there is no valid and reliable justification for debarking wood.”
Bruce and Karen Wanamaker, the NWPCA’s vice president of industry and government affairs, have been lobbying for support from APHIS and the U.S. Department of Agriculture on the issue of debarking. “There is some strong feeling that it (debarking) would be dropped if it went to an overall (EU) vote,” said Bruce. Some countries, such as
The NWPCA is devoting resources to worker safety and is involved in an alliance with OSHA and another organization to develop industry best practices. OSHA has targeted pallet businesses in recent years. Companies have been slapped with steep fines for workplace safety violations, and regulations have been extremely complicated.
The NWPCA responded by turning to Adele Abrams, a safety expert and litigator, and launching a safety program that includes a safety manual and consultation services for members. The goals of the safety efforts are to improve workplace safety and reduce operating costs. “We want to lower your worker’s compensation premiums,” said Bruce. “That’s really what we have in mind.”
Psychology of Selling
Gordon Hughes, executive vice president of the Canadian Wooden Pallet and Container Association, discussed insights into the psychology of selling.
In a hypothetical example, he noted that a company would have to increase
The subconscious is very powerful and helps direct us through many daily tasks without conscious decision making, Gordon noted. For example, when we are driving in traffic but lost deep in thought, the subconscious directs us to stop for a red light. “Like red lights, there are some powerful words that the subconscious reacts to,” said Gordon.
‘Now’ is one such word. “All of us watch TV,” said Gordon. “Buy now, or by now you are wondering what to do. ‘Now’ is a direct order to the subconscious mind to move forward. If you say to your customer, ‘By now we should be moving forward,’ he’s saying, ‘Okay, let’s get going to the next step.’” The word ‘now’ is also effective in letters or e-mail communications, Gordon suggested.
Another world that triggers a positive response in
In another test, the subjects went to the front of the line and asked if they could get ahead; they told the people at the front of the line that they needed to cut in because they would fail a course if they did not turn a term paper in on time. Ninety-eight percent of the people said yes while only 2% said no.
In a third test, the subjects asked permission to get head because, they explained, they needed to make photocopies; 94% of the people said yes and 6% said no.
The study showed that the word ‘because’ can be a powerful, positive persuading influence – even when not substantiated by compelling reasons for compliance.
Gordon related the study to
Another useful word to trigger a subconscious response is ‘stop.’ “It causes a pause,” Gordon noted, as in, “ ‘Let’s stop to make sure your needs are being fulfilled.’ ” Another word, ‘but,’ helps the customer to forget everything that has been said previously. “ ‘You like what my competition has to offer, but are you still open to looking at how we can continue to do business?’”
Another psychological
New Composite
Pat Winters of Hunter Paine Enterprises, a new WPA member company based in
Although it is significantly more expensive than solid wood, it offers dramatically more durability as well as a quick way to attach RFID tags in a protected area of the pallet – two reasons why pallet companies may want to take a close look at Lexite, said Pat. It has been approved for military applications, he added.
Pat described Hunter Paine as a boutique engineering company that looks for leading edge technologies to add value for stakeholders. The company has invested about $4 million in developing Lexite, which was successfully tested at Virginia Tech and now is in production in a 120,000-square-foot plant.
Lexite is made from recycled tires, paper and glass. The hard outer shell is made of layers of paper and fiberglass. Lexite’s strength can be modified for a specific application by different combinations of the layers. The interior cavity is filled with polyurethane foam.
Hunter Paine is seeking to work with pallet companies to develop Lexite pallets for pools where the higher cost of the material can be spread out over the extended life of the pallet. The company will offer introductory pricing to enable businesses to test Lexite applications.
Virginia Tech Services
Dr. Marshall (‘Mark’) White, director of the
The combined use of wood pallets and corrugated cartons represents the single largest domestic use of wood fiber, Mark noted. “What you and your customer decide in the supply chain has a huge impact on wood fiber utilization.”
Both the paper and pallet industries “are doing a remarkable job” in recycling, said Mark. “A significant portion of the unit load is recycled fiber,” he said, “and that’s great news for the industry…This has an impact on our timber utilization, and on health safety when the product fails, as well as on our environment both from a landfill point of view and carbon emissions point of view.”
The Center for Unit Load Design takes a system approach to pallet design that focuses on the entire unit load design and performance. The approach examines the interaction between packaging, pallet and handling equipment. “If you understand the interaction between packaging and the pallet, you can offer a greater service to your customer, and I believe it can be very profitable,” said Mark.
The Center for Unit Load Design offers short courses on the Pallet Design System software, unit load design and corrugated packaging design as well as short courses in international standards for phytosanitary measures in wood packaging.
Another service the center provides is identification of wood eating insects. Even if a pallet has been properly treated to eliminate pests for export shipments, it may become infested after it reaches its destination country, Mark noted.
“As soon as you set it on the ground in
Insects may be sent to the Center for Unit Load Design for identification. “We can identify it and give its life cycle and determine whether it is a regulated insect (under ISPM 15), and most of the time they are not,” said Mark.
The Pallet Design System software program was developed and is supported by Virginia Tech. (The program is owned and distributed by the NWPCA.) The center offers a telefax PDS service for pallet companies that use the program infrequently.
The center has two fully equipped laboratories to test pallets, packaging and unit loads. Testing services are available on a fee basis. The center is also developing a searchable database for its members.
Perhaps the most valuable service provided by the center is one-on-one consultations with its staff, Mark suggested. The center receives about 16-18 inquiries daily – about a dozen from pallet industry members and the remainder from pallet-using businesses. “It is the service that is by far our most valuable service to the industry,” said Mark. “We don’t know all the answers, but generally we can find the answers.”
Unit load storage and distribution logistics systems consist of three interacting components, noted Mark. They are the pallet, the distribution packaging, and the unit load handling equipment. The pallet is the most important of the three because it is the interface – it carries the packaging and comes into contact with the handling equipment.
“Designers of these three components typically work independently with the goal of designing the lowest cost component,” said Mark. “What is needed is a system design approach that includes an understanding of how the packaging, pallets and unit load handling equipment interact. A common vocabulary is needed to allow the designers of the system components to communicate efficiently.”
Pallet manufacturers do a marvelous job of cutting costs, eliminating 5-10 cents from the cost of a pallet, which can make or break a sale, Mark noted. When taking a system approach, however, a few extra cents spent on a pallet with a stiffer deck can produce several dollars in savings in overall reduced packaging requirements.
“I’m not taking about saving 10 or 15 cents,” said Mark. “I’m talking about savings of $5 a unit load, $10 a shipping load.”
Mark also discussed the new packaging sciences study option for undergraduates at Virginia Tech’s department of wood science and forest products. Graduates of the new program will have a broad, interdisciplinary education in transport packaging and unit load system design.
Virginia Tech is soliciting pallet companies to provide summer internships for students in the new program. The internships would be a good way for companies to evaluate a student’s suitability for employment after graduation, Mark suggested. Interested pallet companies should contact Virginia Tech.
The Western Pallet Association holds its annual meeting on Martin Luther King Day weekend each January. Whether networking with peers and suppliers, industry information, or just golf and good weather top your agenda, plan on attending next year. Contact the Western Pallet Association for more information or visit the Web site at www.westernpallets.org.
