Bassi Distributing Explores New Dimension with Chep

WATSONVILLE, Calif. — When Chep entered the U.S. pallet market
with its pallet rental program, many pallet manufacturers were wary. Others, however, have
seen the entry of ‘big blue’ as an opportunity to bring stability to their
business, to even out the ups and downs of sales.

George Bassi Distributing is one of those companies that saw an
opportunity and has become a producer for Chep USA. Company president Dean Bassi said the
relationship with Chep has added a new dimension to Bassi’s business.

When Chep needed a manufacturer on the West Coast, they recognized
Bassi’s reputation for building quality pallets. It was David Fullington at Express
Lumber, one of Bassi Distributing’s lumber suppliers, who convinced Dean and his
brother, Michael, chief financial officer, that partnering with Chep would benefit their
company.

When Bassi signed on to build Chep pallets last spring, many changes
were in store. Before Chep became its biggest customer, Bassi ran one eight-hour shift
five days per week. In order to meet the requirements of the Chep account, the company
increased the work force at its Watsonville location from 60 to 100 in the span of one
week and went to two 10-hour shifts, seven days per week.

There were "a lot of growing pains," admits Dean, but he
credited a "real good team of employees who knew what they were doing" with
making the successful transition. Experienced workers trained new employees until they
were able to work alone. It took about a month, Dean said, for the new workers and the
added production capacity to begin functioning in a routine fashion.

George Bassi Distributing is located south of San Francisco between
Santa Cruz and Monterey along the coast of Monterey Bay. Named for its founder and
original owner, George Bassi launched a trucking business in the 1940s with one truck and
a single trailer. He hauled produce from the central valley of California to Oregon. As a
back haul, he took lumber from mills in Oregon and northern California. After World War II
and the onset of the pallet industry, George quickly saw a need and figured he could fill
it. There were no companies in the Pajaro and Salinas valleys that manufactured pallets.
George decided to capitalize on his connections in the lumber business and began building
pallets for local canneries and frozen food companies. In those early days he and his
workers used hatchets instead of hammers. The canneries made up the bulk of the
company’s volume until the 1970s, when it developed accounts in agribusiness.

Dean and Mike returned to the family business about three years ago.
Although they had grown up around the company, Dean, Mike and their older brother, George
Jr., had careers outside of Bassi Distributing. Dean, 31, had his pallet recycling
business, Mike 45, was a farmer who grew specialty vegetables for restaurants in Monterey,
and George Jr., 50, was an electrician until he recently retired. George gave his sons a
couple of options: the family could get out of the business or the sons could return and
take responsibility for managing it. Dean brought his pallet recycling business into the
company and became president. As chief financial officer, Mike’s duties include
buying lumber; he also continues to have a hand in his organic farming business. George
Jr. is preparing to return to the business to supervise maintenance. (Their father,
retired from the business for some time, died last summer at age 82.)

Today, Bassi Distributing supplies pallets from its Watsonville
location — it has grown from one acre to 10 — to customers throughout California
and in Nevada and Oregon. It has a second facility in Holtville, Calif., located about 60
miles west of Yuma, Ariz. that employs about 30 workers and serves customers in southern
California and Arizona.

In addition to the increased manpower it needed to handle the Chep
account, Bassi also had to increase its nailing capacity substantially. The company added
two Viking Explorer pallet assembly machines to build Chep block pallets. The two new
Viking nailing machines were installed just after the first of this year. Besides the two
new Viking Explorers, Bassi is equipped with four other Viking nailers — three
Duo-Matics and a Turbo-Max — and five FMC nailing machines.

Since the company buys cut stock, it has minimal lumber manufacturing
or remanufacturing operations. Nearly all material comes already sized for assembly —
deck boards, stringer, and blocks, although some bundles of material are cut on an LM
Equipment Company package saw. Bassi manufactures some of its own blocks, sawing them from
4×6 cants on six Whirlwind chop saws. Stringer material that has not been notched goes to
Hazledine and Bob Hanna notching machines, and some deck boards are processed on a
Hazledine chamfering machine. "We try to stay away from having to do any
milling," said Mike.

The company also added a paint booth at Watsonville to coat the Chep
pallets in their characteristic blue color. Two men feed stacks of pallets into the booth
for painting, and two more stencil the Chep name and logo onto the blue pallets. Before
putting in the paint booth, the Chep pallets were painted in a secluded spot of the yard
"on a very calm day," Mike said with a laugh.

The Viking Explorer can assemble both block and stringer pallets. The
Explorer has an aluminum jig frame designed for the Chep block configuration. To change
over to a stringer configuration, the jig is replaced with another, and the correct
nailing scheme is entered into the Explorer’s computer controls. Changing between the
two can be done in as little as 30 to 45 minutes. Bassi intends to keep the two Explorers
set up almost exclusively for the Chep block pallet configuration. Chep stringer pallets
require a staggered nailing pattern. For Chep stringer pallets, Bassi uses the Turbo-Max
and, to a lesser degree, one of the Duo-Matics. If the company receives a large order for
Chep stringer pallets, it can change over an Explorer.

Chep stringer pallets generally require more lumber, have tighter
tolerances and different nailing configurations than a GMA pallet. Accordingly, they take
longer to build and require more attention during the manufacturing process. For example,
the Turbo-Max can produce from 1,500 to 1,800 GMA pallets per shift but only 900 to 1,000
Chep pallets. The difference is due to the staggered nailing pattern and partly to the
increased number of nails. In addition, since Chep pallets require stricter tolerances,
the machine is operated at a slower pace to ensure they are met.

Factors that persuaded Mike and Dean to deal with Viking included the
company’s reputation and experience, the availability of the machines, the
capabilities of the Explorer, and price. Viking personnel spent considerable time at Bassi
setting up the new Explorers so they would consistently produce block pallets to meet
Chep’s tolerance limits. The Viking team was "wonderful to work with," said
Dean.

Bassi’s pallet production varies throughout the year because of
the seasonal nature of its accounts. The company produced 1.2 million pallets in 1998,
using 30 million board feet of lumber. About 80% to 90% of its volume is the 48×40
footprint, although it also makes a number of specialty pallets, including a small number
that are manufactured by hand at nailing tables. Bassi supplies customers with about 50
other types of pallets, including Euro designs, block and SPEQ™ pallets.

With its growing pains behind it, George Bassi Distributing is equipped, capable, and
focused on supplying Chep in a partnership it hopes will prove fruitful for both and on
continuing to serve its customers in the agribusiness industry.

WATSONVILLE, Calif. — When Chep entered the U.S. pallet market
with its pallet rental program, many pallet manufacturers were wary. Others, however, have
seen the entry of ‘big blue’ as an opportunity to bring stability to their
business, to even out the ups and downs of sales.

George Bassi Distributing is one of those companies that saw an
opportunity and has become a producer for Chep USA. Company president Dean Bassi said the
relationship with Chep has added a new dimension to Bassi’s business.

When Chep needed a manufacturer on the West Coast, they recognized
Bassi’s reputation for building quality pallets. It was David Fullington at Express
Lumber, one of Bassi Distributing’s lumber suppliers, who convinced Dean and his
brother, Michael, chief financial officer, that partnering with Chep would benefit their
company.

When Bassi signed on to build Chep pallets last spring, many changes
were in store. Before Chep became its biggest customer, Bassi ran one eight-hour shift
five days per week. In order to meet the requirements of the Chep account, the company
increased the work force at its Watsonville location from 60 to 100 in the span of one
week and went to two 10-hour shifts, seven days per week.

There were "a lot of growing pains," admits Dean, but he
credited a "real good team of employees who knew what they were doing" with
making the successful transition. Experienced workers trained new employees until they
were able to work alone. It took about a month, Dean said, for the new workers and the
added production capacity to begin functioning in a routine fashion.

George Bassi Distributing is located south of San Francisco between
Santa Cruz and Monterey along the coast of Monterey Bay. Named for its founder and
original owner, George Bassi launched a trucking business in the 1940s with one truck and
a single trailer. He hauled produce from the central valley of California to Oregon. As a
back haul, he took lumber from mills in Oregon and northern California. After World War II
and the onset of the pallet industry, George quickly saw a need and figured he could fill
it. There were no companies in the Pajaro and Salinas valleys that manufactured pallets.
George decided to capitalize on his connections in the lumber business and began building
pallets for local canneries and frozen food companies. In those early days he and his
workers used hatchets instead of hammers. The canneries made up the bulk of the
company’s volume until the 1970s, when it developed accounts in agribusiness.

Dean and Mike returned to the family business about three years ago.
Although they had grown up around the company, Dean, Mike and their older brother, George
Jr., had careers outside of Bassi Distributing. Dean, 31, had his pallet recycling
business, Mike 45, was a farmer who grew specialty vegetables for restaurants in Monterey,
and George Jr., 50, was an electrician until he recently retired. George gave his sons a
couple of options: the family could get out of the business or the sons could return and
take responsibility for managing it. Dean brought his pallet recycling business into the
company and became president. As chief financial officer, Mike’s duties include
buying lumber; he also continues to have a hand in his organic farming business. George
Jr. is preparing to return to the business to supervise maintenance. (Their father,
retired from the business for some time, died last summer at age 82.)

Today, Bassi Distributing supplies pallets from its Watsonville
location — it has grown from one acre to 10 — to customers throughout California
and in Nevada and Oregon. It has a second facility in Holtville, Calif., located about 60
miles west of Yuma, Ariz. that employs about 30 workers and serves customers in southern
California and Arizona.

In addition to the increased manpower it needed to handle the Chep
account, Bassi also had to increase its nailing capacity substantially. The company added
two Viking Explorer pallet assembly machines to build Chep block pallets. The two new
Viking nailing machines were installed just after the first of this year. Besides the two
new Viking Explorers, Bassi is equipped with four other Viking nailers — three
Duo-Matics and a Turbo-Max — and five FMC nailing machines.

Since the company buys cut stock, it has minimal lumber manufacturing
or remanufacturing operations. Nearly all material comes already sized for assembly —
deck boards, stringer, and blocks, although some bundles of material are cut on an LM
Equipment Company package saw. Bassi manufactures some of its own blocks, sawing them from
4×6 cants on six Whirlwind chop saws. Stringer material that has not been notched goes to
Hazledine and Bob Hanna notching machines, and some deck boards are processed on a
Hazledine chamfering machine. "We try to stay away from having to do any
milling," said Mike.

The company also added a paint booth at Watsonville to coat the Chep
pallets in their characteristic blue color. Two men feed stacks of pallets into the booth
for painting, and two more stencil the Chep name and logo onto the blue pallets. Before
putting in the paint booth, the Chep pallets were painted in a secluded spot of the yard
"on a very calm day," Mike said with a laugh.

The Viking Explorer can assemble both block and stringer pallets. The
Explorer has an aluminum jig frame designed for the Chep block configuration. To change
over to a stringer configuration, the jig is replaced with another, and the correct
nailing scheme is entered into the Explorer’s computer controls. Changing between the
two can be done in as little as 30 to 45 minutes. Bassi intends to keep the two Explorers
set up almost exclusively for the Chep block pallet configuration. Chep stringer pallets
require a staggered nailing pattern. For Chep stringer pallets, Bassi uses the Turbo-Max
and, to a lesser degree, one of the Duo-Matics. If the company receives a large order for
Chep stringer pallets, it can change over an Explorer.

Chep stringer pallets generally require more lumber, have tighter
tolerances and different nailing configurations than a GMA pallet. Accordingly, they take
longer to build and require more attention during the manufacturing process. For example,
the Turbo-Max can produce from 1,500 to 1,800 GMA pallets per shift but only 900 to 1,000
Chep pallets. The difference is due to the staggered nailing pattern and partly to the
increased number of nails. In addition, since Chep pallets require stricter tolerances,
the machine is operated at a slower pace to ensure they are met.

Factors that persuaded Mike and Dean to deal with Viking included the
company’s reputation and experience, the availability of the machines, the
capabilities of the Explorer, and price. Viking personnel spent considerable time at Bassi
setting up the new Explorers so they would consistently produce block pallets to meet
Chep’s tolerance limits. The Viking team was "wonderful to work with," said
Dean.

Bassi’s pallet production varies throughout the year because of
the seasonal nature of its accounts. The company produced 1.2 million pallets in 1998,
using 30 million board feet of lumber. About 80% to 90% of its volume is the 48×40
footprint, although it also makes a number of specialty pallets, including a small number
that are manufactured by hand at nailing tables. Bassi supplies customers with about 50
other types of pallets, including Euro designs, block and SPEQ™ pallets.

With its growing pains behind it, George Bassi Distributing is equipped, capable, and
focused on supplying Chep in a partnership it hopes will prove fruitful for both and on
continuing to serve its customers in the agribusiness industry.