It’s been about two years since First Alliance Logistics Management (FALM) launched a freight initiative with a goal of helping pallet companies reduce their logistics costs. And according to First Alliance’s president, Glenn Merritt, the initiative continues to expand making pallet logistics possible over longer and longer distances.
Glenn said, “We have been able to build on that offering, and have added additional freight companies and 3PLs to our transportation arsenal.”
In 2008, First Alliance launched a freight service for pallet companies, leveraging its capabilities in the logistics sector to help provide lower cost freight for pallet companies. The premise remains that the expertise of pallet companies is in producing pallets, and that First Alliance, with its knowledge of logistics, including carriers and lanes, can offer expertise to help reduce inbound and outbound logistics costs for those companies.
“One of the things we have learned,” Glenn emphasized, “is that we can economically ship pallets great distances.” Shattering a long standing rule of thumb that assembled pallets cannot be profitably shipped more than about 200 miles, the Alliance has successfully shipped pallet trailers by intermodal TOFC from Tampa, for example, to Atlanta, New England to Chicago, or Rhode Island to St. Louis.
Glenn is quick to emphasize that this is not a regular opportunity. It can emerge because of higher priced regional markets being a bit out of balance. “It can only happen when freight rates are depressed, in a lane from an area where pallets accumulate, to a market with good demand,” he said.
Being a veteran logistics industry executive before taking the driver’s seat at First Alliance Logistics Management, Glenn is well connected to some industry insiders, such as the rail lines that offered the attractive rates. He noted however that Jarrett Carroll, FALM’s Operations Manager was instrumental in working with the rail roads to uncover those lanes where there were intermodal equipment balancing needs as well as pallet imbalances, the perfect scenario for shipping longer distances at lower costs.
Glenn stated that one of the company’s core values is to operate as a very ethical business. “There is no way we would do something for a short term gain that would tarnish the reputation of one of the partner companies,” said Glenn.
It has been 15 years since First Alliance was formed by 20 leading pallet companies, and to this day remains owned by 16 of them. Collectively, those companies have annual revenues of around $500 million, with operations spread across 50 locations. In addition, First Alliance also has a contract network of another 200 locations to deliver its services to the U.S. market.
First Alliance offers a variety of services including pallet recovery, dock sweeps, pallet brokerage, consulting and others. Glenn characterized FALM as being techno-centric, and pointed out that it has invested over $250,000 in its current tracking/business operating system.
Glenn takes a broad view of the importance of business relationships between the partners, pallet providers, as well as customers. “Our pallet suppliers are just as important to us as our customers, because you can’t have one without the other,” Glenn observed.
While originally First Alliance steered clear of the extremely competitive 48×40 pallet business to concentrate on other segments, it has now fully entered the 48×40 category. “A few years ago it became apparent that there were opportunities for a respectable provider who would give honest dock sweep counts to get into the 48×40 market,” Glenn said. It’s more than ethics though, it’s timely pickups, effective management reporting, and continual price monitoring that retains the business relationship. “We now have 6 dock sweeps with multi-billion dollar customers. My only regret is that we didn’t enter this market at the turn of the new century.
“With our dock sweeps, we sell pallets to smaller pallet companies, giving them access to cores from major dock sweeps that they would not otherwise have,” commented Glenn.
First Alliance continues to be involved in a number of innovative enterprises. One project has been retrofitting the interior of the entire fleet of trucks for a major snack food producer. Trucks were retrofitted with lightweight aluminum, ergonomically friendly gravity feed shelving, which not only improved fuel economy of the trucks, but also driver satisfaction. With everything better positioned to minimize reaching, injuries have been prevented while driver productivity has improved. Because the driver can make more stops, the company, as well as the driver, makes more money. The conversion was undertaken for over 1,000 delivery trucks over the course of 18 months. The project also involved driver training and scrap material recovery.
First Alliance was originally conceived by its founding partners as an entity to bridge separate successful pallet companies to what they believed would be the future of the pallet business, Glenn reminded. It was launched when national level pallet procurement, retrieval, pooling and dock sweeps were all looming on the horizon. Glenn believes that First Alliance remains as a successful model for the future of the industry.
To find out more about First Alliance Logistics Management, visit www.palletalliance.com.
