Effectively running pallet rental depots is at the heart of the growth strategy for James Jones & Sons (Pallets & Packaging) Ltd. The company took over operations this January at a new £2.5 ($3.25) million automated pallet inspection and repair site in the UK after signing an agreement with IPP. The facility at Bardon Hill (near Leicester) marked the latest expansion of the group’s service network.
The new facility replaces a former nearby site managed by IPP, and the state-of-the-art installation will initially process more than three million reusable pool pallets per year. IPP is one of the major pallet rental providers in Europe, along with LPR, and, of course, CHEP. Bardon Hill is the biggest IPP service center of its kind in Europe. James Jones took over responsibility for 3 LPR plants in 2017 and these were quickly improved and are performing extremely well.
The company now operates from 14 strategically located sites manufacturing new pallets and packaging and pallet inspections and repairs in the UK, serving the major pools—CHEP, LPR, IPP, and EPAL. Its automated Grangemouth, Scotland, facility for CHEP is its largest, with a throughput of six million pallets annually.
“We have built a strong business and excellent reputation for service and quality in the field of pallet inspection and repair operations with all the closed loop pallet pools, and we are delighted the close working long-term relationship we have developed with IPP has now led to James Jones taking over operations at the Bardon Hill site,” stated Gil Covey, executive chairman at James Jones & Sons (Pallets & Packaging) Ltd.
“This is a flagship operation on a new site with state-of-the-art machinery and we are confident that using our expertise will result in a great success for us, IPP and its customers,” he said, emphasizing the long-term approach that the company takes to business development.
James Jones & Sons Ltd is the UK’s most diversified, family-owned timber processor with annual sales now in excess of £180 ($234) million. The company operates 20 sites across the UK and employs almost 800 people. With operations including five sawmills, it currently produces four million new pallets annually and handles up to 25 million pallets per year through its pallet inspection and repair centers. The company has also made significant investments in engineered wood joist (I-joist) capacity and now supplies 45% of the UK market.
Covey is quick to explain that there are two elements that run throughout all of the James Jones operations – timber products and quality focus. “This is really how it makes sense,” he said.
About 30% of James Jones timber production is sold to pallet and packaging manufacturers, including to its own pallet manufacturing sites. James Jones & Sons (Pallets & Packaging) purchases a major proportion of its lumber needs from James Jones mills. “We trade at arm’s length,” Covey explained. “So, we are buying freely and from James Jones competitors. Equally, James Jones sawmills are free to sell to our competitors as well, so we all we know the market well. We are market focused, and that way we can be truly competitive.”
The relationship between IPP and James Jones goes back 14 years to when the pallet pooling provider first entered the UK market. With its reputation for quality, James Jones (then Unit Pallets) had already cemented its position as a leading supplier of new pallets to the major pools. Covey’s company, Unit Pallets, was purchased by James Jones in 1999, marking the sawmiller’s direct entrance into the pallet sector. In 2011, it also acquired Larch, which manufactured stringer (2-way) pallets for the construction industry, broadening the product range. In 2016, the company purchased TWP, another pallet manufacturer, which again increased its block (4-way) pallet capacity.
New Repair Line Features
At Bardon Hill, incoming stacks of pallets are automatically unstacked and presented to pallet inspection locations. Good quality pallets are immediately sent for stacking, while defective pallets are diverted for repair. It is an “over-under” system. Pallets are transported by overhead track to one of several repair tables. After repair, pallets are placed on the lower conveyor to a corner saw, a nail-press unit to ensure there are no exposed nail heads, and then to a single-pallet paint system. The painting unit reduces paint usage compared to the previous situation.
The inspection and repair installation at Bardon Hill was supplied by Pallet Sorting Systems (PSS), a Netherlands-based specialist in pallet inspection and repair equipment. In business for 12 years, it has customers in the Netherlands, Belgium, France, England, Ireland, Portugal, Poland, Denmark, Norway, Germany, Romania.
“We are project-oriented and offer turn-key solutions,” owner Roel de Vries explained. “We have all the (required) disciplines in-house to work this way.”
De Vries stated that his equipment can increase the efficiency of pallet sorting by over 300% and pallet repair by 25%. “The machine parts are modular, which means that the machine can always be adjusted over time and grows with the company,” he added.
Covey describes their Grangemouth, Bardon Hill, Stretton and Castleford locations as practical and sensible approaches to automation for inspection and repair. At this stage, he does not believe that robotics, due to the price, is an economically viable approach for repair. He intends to continue monitoring the opportunity, however. He recognizes that variables such as increased labor shortages or insurance claims might change the calculation in the future. “We have to keep an eye on it,” he said. “So, we are.”
A Cultural Shift for Employees
Workers at Bardon Hill have undergone a series of changes. “We took over the existing workforce, and we had to change working practices in a new facility,” Covey said, discussing the move from manual methods to working with sophisticated machinery, as well as involving multiple employers.
One thing that James Jones did was to introduce a new pay structure aimed at encouraging increased productivity. Output levels rose very quickly. And while gratifying, it was at a level that he expected to see. “We know what we’re doing because we’re getting it (good productivity) at the other plants so there’s no reason why it should be radically different here, when you make allowance for the machinery, of course,” he said.
“I think we’ve got a critical advantage because we’re timber people,” Covey stated. It has been noticeable, in plants previously run by transport companies, that the morale of the workforce improved rapidly when James Jones took over and they realized that they are at the heart of their employer’s operations.
Market Focus
“We operate in a very tough industry,” Covey observed, explaining his company’s decision to expand pallet repairs for the pool providers versus other areas of the pallet market. “You win an order and you lose an order for new pallets. Pallets are not always regarded as so important to all of these customers. We are well placed to compete in the new pallet market but it is essential to find complementary business.
“But for the pools, it’s different,” he continued. “For the pools, the most important asset on the balance sheet is the pallets. So, they take those pallets very seriously. They send in inspectors. They want to make sure we use the right species of timber, that pallets are assembled with the right equipment. That it’s the right nailing pattern, that they’re dried to the specification that they should be and that they are repaired to the required standard. It is all about quality and life cycle costs.
“We welcome this because it means that people who are cheating can’t get away with it because they are so heavily regulated,” Covey continued.
Another attraction with the pooling market, Covey added, is the standard pallet, which allows the company to enjoy the benefits of automation. “These are long-term deals with big customers and standard pallets so that we’re able to automate,” he said. “And we are prepared to invest in automation. We are looking for secure, sustainable, and equitable long-term deals. We are more interested in our niche and doing the job properly rather than just generating sales growth for the sake of it.”
Because of the scale of pooling inspection and repair operations, he noted that it is difficult to compete if you don’t have the money and expertise. “So, this is why we chose this niche,” he concluded, and we are very glad we did as it fits well with our high-quality new pallet and packaging manufacturing and of course the ready supply of pallet timber from our own sawmills is a crucial advantage.”
