Did you know that Pallet Enterprise has the world’s largest database of wood pallet information? Much of this content remains valuable for pallet businesses today. In this article, the first of a series, we tap into that store of knowledge on a particular topic. In this issue, we share some custom packaging hot takes.
Why Get into the Custom Packaging Business?
The custom packaging business significantly differs from doing high-volume pallet orders. Custom crating can be complicated and often involves smaller order quantities. It requires a different perspective than for pallets regarding sales, cost estimation, design, fabrication, and, in some cases, onsite assembly at customer locations. It may require additional materials and equipment than what is needed for your pallet business. So why do it?
The short answer is that it opens new revenue opportunities, and there can be less competition and higher margins for expert producers. One company, Larson Pallet (now Larson Packaging Company or LPC), faced a declining market for regular wood pallets in the early 2000s.
“We were staring at a declining market,” owner Mark Hoffman told Pallet Enterprise in 2021. “The market was shrinking, and recyclers were growing and taking over the 48×40 business.” He realized that the business needed to move in a different direction. The company had some design experience through pallet design software.
“We liked the design aspect,” Hoffman said at the time. “We knew how to cut and nail wood and plywood together. And we thought crating was a big adjacent market opportunity in our area that we were not taking advantage of. We felt it was our next logical step.”
But How Do We Do It?
It is one thing to decide to do custom packaging. It is quite another to have or develop the necessary skills to pull it off. In the case of LPC, they initially looked outside the company to hire the needed expertise. They soon onboarded a salesperson and some assemblers with crating experience, beginning a journey that would to be central to their future growth.
Another company, Robison Industries, found that once you have a basis in custom packaging, one way to grow expertise is by accepting challenging projects. Robinson relies on a can-do approach. When customers come with unique needs, the company embraces them. Initially, it proceeds through trial and error, eventually standardizing processes and buying the equipment needed for efficient production.
“It was really an entrepreneurial mindset to try new things,” company co-owner Ralph Rupert of Robinson Industries stated in a 2023 Pallet Enterprise article.
What Equipment Do You Need?
While custom crating assembly is largely manual, wood packaging providers utilize various equipment depending on their product mix. Aside from typical pallet stock cut-up equipment, companies regularly use panel saws and CNC machines. Some sophisticated operators employ robots for challenging tasks such as positioning large plywood sheets, as well as boring and fastening them. In the case of LPC, it also was using specialized equipment such as a waterjet cutting machine to make foam-based packaging in addition to die press and box-making machines.
Digital technologies also have been expressed enthusiastically in some articles, whether computer-aided design (CAD) programs to quickly generate crate designs or ERP systems to improve business efficiency, including shortening the sales cycle.
“The first thing customers want to know after the price is what is the OD (outside diameter) and how much does it weigh,” Stan Jorey of Ox Box stated in a 2017 article while emphasizing the importance of his company’s enterprise resource planning (ERP) system. “If we can make the computer provide that, it makes things a lot easier.”
Product Differentiation: What Goes into a Crate?
Crating systems have become increasingly sophisticated. They are designed to meet the needs of an ongoing stream of unique use cases. Packaging solutions must strive to prevent damage to the product and facilitate safe handling during the shipment, but also meet other regulatory and customer requirements.
Crates can utilize various materials including foams, moisture barriers, desiccants, steel or corrugated. Crate features such as knock-down design, anchor points, viewing ports, access doors and ramp doors may be desirable in some applications.
J&L Wood Products, for example, reported in a 2023 article that it builds overseas crates requiring moisture-absorbing paper lining and corrosion-resistant coatings or vacuum sealed bags. The crates are heat treated and stamped to meet ISPM-15 requirements for heat treatment and certified wood packaging, depending on the country where they will be shipped.
The company also builds shock pallets to absorb vibrations during transportation. The pallets are specially designed and use foam blocks in the runners, allowing for more shock absorption during transit.
Another company, Valley Box Company, shared some of its product protection practices regarding trade show crates. In a 2019 article, Alicia Guillette, vice president of the company discussed their evolving approach to preventing abrasion to delicate trade show materials. Previously, Valley Box layered ¼” foam over plywood and then covered it with a low-weave polyester carpet. Then the company transitioned to wool felt as a better solution. It’s thick, dense, soft attributes made it the perfect solution for lining cubby slots to allow the customer to easily slide trade show panels in without worry of nasty scratches.
Specialty Packaging Requires Laser Focus on Customer Service
Customer service is a critical task for some custom packaging providers, covering aspects such as traveling to sites to take measurements and perform assembly and coordinating transportation. “Our on-site packing is definitely our niche,” said April Francis of Express Packing & Forwarding in a 2018 article. It accounted for 35% of the company’s business at that time. Whenever possible, wood boxes and skids are built at Express Packing and then shipped in knock-down form to the job site, she said.
Crate durability, repair and recycling are also increasingly important considerations. For instance, Valley Box offers painted wood boxes to increase the lifespan of a reusable container, adding ultra-violet protection. Paint also aids in color-coding identification, looks professional and increases the visual appeal of the delivered product.
The bottom line is that the custom wood packaging business is significantly different than doing common pallets, but many companies have climbed the learning curve and come to excel in this niche. If you have an interest in custom packaging or another topic of interest, don’t forget to check out the Pallet Enterprise archives at www.palletenterprise.com. A lot of good ideas await.
