Gary Sharon is executive vice president of Litco International, which specializes in bio-based, environmentally sustainable distribution and transport packaging solutions. Litco manufactures INCA™ Engineered Molded Wood™ pallets and core plugs, and it recently began manufacturing extruded wood fiber blocks for block pallets.
Pallet Enterprise: How has COVID-19 affected your business and operations?
Sharon: COVID-19 is a huge distraction on top of the usual challenges associated with running a small business. The health risk of employees infecting each other has been the primary concern for the past 11 months.
At the onset it was unknown if we would be allowed to operate, if our customers would be able to accept deliveries, and if we could continue to generate revenue and get paid from customers. Thanks to lobbying work by the industry and the National Wooden Pallet & Container Association staff, the pallet sector is considered ‘essential’ to keep goods flowing through the supply chain.
Last March, some of our employees were anxious about coming to work, and this created a stressful atmosphere. Those employees were offered an optional layoff. The reduction in staff forced us to consolidate activities within the remaining workforce. Although challenging, we quickly learned that we were able to run a couple of departments more efficiently with fewer people.
Pallet Enterprise: Tell us about your latest project at Litco – making extruded wood fiber blocks for block pallets. Why is it needed in the market? What are the reasons to use Litco blocks over sawn solid wood blocks?
Sharon: Litco specializes in processed wood fibers. Traditionally we have used those fibers to compression mold a number of products. The most popular product line is our INCA™ Engineered Molded Wood™ pallets. These pallets are made in molds placed in a 1,200-ton press.
Since processing raw fibers for both compression molding and extruding are very similar, it seemed like a natural progression for us to extrude products made from wood fiber.
Two years ago, we decided to make extruded wood blocks for use in one-way and export solid-wood pallets. Litco’s mid-to-long-term plan is to increase the number of extruders at our Dover plant and to produce blocks in our Sardis, Mississippi, plant if the demand dictates.
This move also puts us in position to seek other extruded high-end products that could potentially serve a variety of markets.
Compared to solid-wood blocks, the benefits of extruded wood fiber blocks for pallet manufacturing are reductions in labor, costly lumber, wood processing costs, and heat-treat time because extruded blocks are very low moisture and meet ISPM-15 requirements.
Compared to overseas suppliers of extruded and molded wood blocks, pallet manufacturers can get ours faster and easier without the long lead times compared to waiting 8-12 weeks from overseas. And they can order as few as two pallet loads at a time. There’s no need to carry a lot of inventory.
For pallet users, extruded blocks lower the cost of ownership of the finished pallet because they are durable and produce a durable pallet. Pallets made with extruded blocks are more likely to hold up in multi-step supply chains and are more likely to be compatible with automated and robotic equipment because extruded blocks have consistent height dimensions. Unlike solid wood blocks, extruded blocks are not prone to splitting, which can lead to fastener withdrawal, pallet failure and product damage.
Pallet Enterprise: In your opinion, what do packaging users get wrong the most when it comes to specifying pallets or wood packaging?
Sharon: Buyers typically are pressured to choose their suppliers based on the low end of the price spectrum of bids. The true cost of this approach begins to surface once the pallet leaves their plant and enters the rigors of the supply chain, and their customers lodge a complaint about damaged pallets and goods.
Generally speaking, purchasing managers are not trained to evaluate the performance level of a pallet. This is unwise as the pallet is the foundation of the entire unit load and acts to protect their goods and helps to ensure they arrive safe and sound.
Somehow, marketing and sales people need to track down the person in the plant that is specifying the pallet design and educate them on the importance of choosing a pallet based on the proper design. Fortunately, there are tools that a pallet sales professional can use to help them, such as the Best Pallet™ and Pallet Design System (PDS)™ software programs.
