(Editor’s Note: Bill Biedenbach of Allegheny Recycled Products was chairman-elect of the board of directors of the National Wooden Pallet and Container Association during 2002 and likely will be elected chairman at the association’s annual meeting Feb. 22-25. He agreed to be interviewed by Pallet Enterprise. Our questions and his responses follow.)
ENTERPRISE: As a recycler, what are the most pressing issues facing your business?
Biedenbach: Whether you’re a recycler or a new manufacturer, one of the most pressing issues facing the industry today is end users moving their facilities to countries that don’t have the regulatory burdens, tax consequences and labor costs they sustain in the U.S. NWPCA sits on the executive council of the National Association of Manufacturers. We’re working with them to create a positive business environment for all manufacturers, one that will encourage American business to build their products here.
Other issues facing us all are the availability of raw materials, costs, insurance, the general economy, and regulations, particularly those related to international shipments of wood packaging materials.
ENTERPRISE: With increasing demands from customers and a market that gets more competitive each day, are the good times over for pallet recycling?
Biedenbach: Customers have always made demands, there has always been competition and both will be with us in the future. The pallet industry is a maturing market, which means we’ve had time to see things go up and down. But it has also been around long enough to see that it is an enduring market. Some people are doing well today because they have directed their focus to niche markets. Others are concentrating on specific customers who have provided a stable, long-time foundation for their business; they have developed unique customer service for this base, usually a consultative or team approach to servicing that account.
ENTERPRISE: What are your top five priorities as the new NWPCA chairman?
Biedenbach: The only priorities that count are not Bill Biedenbach’s; they’re those of the membership. Members have told us through surveys, phone calls, e-mails and other communications what they want and need, and the association has a strategic plan in place, developed by our committees and approved by our Board, that will serve to deliver value based on member priorities.
I do have one personal priority, which is to increase member participation in the governance process. Any member who feels out-of-the-loop or not in control of membership value can change that at any time by signing up for one of five NWPCA committees. We need every category of member involved to make sure that we’re not only meeting the needs of the collective group, but also each category of member – new manufacturer, recycler, broker and associate. They are four spokes of one wheel. If one of the spokes collapses, the wheel collapses. Each is independent, but necessary to the functioning and success of the organization.
ENTERPRISE: As recyclers have become more prominent in the association, we have heard some old-time manufacturers make comments about losing “control” of “their” association. What can the NWPCA do in the future to better balance the sometimes differing interests between pallet manufacturers and recyclers?
Biedenbach: As I’ve said, our most pressing interests are shared ones. If an issue does come up that uniquely affects a segment of our industry, we must face it as a group, with one voice. We can’t go to legislators or regulators as sub-groups of a fractured industry – not if we want to be successful. We are one industry and what hurts one group hurts us all. That’s not to say we can be all things to all people. We can’t. We must focus on the priorities our members direct. But when we go to outside the pallet industry, whether it’s to end user groups or Washington officials, we need to be united – one for all and all for one.
ENTERPRISE: Why did you initially join the NWPCA? What have you received from your membership?
Biedenbach: When I got started in the pallet business ten years ago, I was starting from ground zero. I needed to learn a lot and I needed to learn it fast. I had always heard the saying, if you want to get rich, take a rich man to lunch and ask him how he did it. In fact, Charlie Harris, who took me under his wing, told me that if I didn’t get something out of an NWPCA conference, I was sleeping or not paying attention.
I ended up at an NWPCA conference where I received the keys to success from new and recycler operators. They helped me build my business at a better rate than the average for the industry. And learning how to do things better didn’t stop at that first conference. I continue to learn year after year, and my business keeps doing well as a result – even during difficult economic years.
ENTERPRISE: Explain the role of the NWPCA in the phytosanitary issue? How has the association worked to represent/protect the interest of the wood pallet industry?
Biedenbach: NWPCA is wearing many hats on the phytosanitary issue. We are an advocate on this issue for our members with international and national regulators. We voiced our concerns on various aspects of the early drafts of the IPPC long before it was finalized and most of our main points of objection were eliminated from the document or revised in ways our members can live with.
NWPCA has also had to play a public relations role in doing effective damage control with end users. There has been so much confusion around this issue that many end users were beginning to consider alternative materials. NWPCA wrote articles for our strategic alliance of end user associations, which is part of the Deliver the Goods trade promotion program. These associations, representing high volume pallet users, used the information in NWPCA’s Fact Sheets and Washington Alerts in their own publications. This communication served to alleviate the fears of end users and promote the continued use of wooden pallets in international shipments.
We are also a clearinghouse of information for phytosanitary changes. We were the only group who spoke at the Department of Agriculture hearings in support of the continued use of wood pallets for international shipments. Environmentalists want the U.S. to mandate the elimination of wood in favor of alternative materials. Because we have been uniquely involved in hearings and meetings with APHIS, we have an obligation to report to our members what way the wind is blowing in Washington.
ENTERPRISE: Realistically, what can the NWPCA do to address the concerns many recyclers have about unfair practices by proprietary pallet management companies?
Biedenbach: The association supports the betterment of the whole industry. As passionately as I might feel personally on the issue, NWPCA can neither take sides in legal disputes nor comment on unresolved court cases. The association has had members call our headquarters and ask us to kick other members out for a variety of reasons including poor quality pallets that give the industry a bad name, non-payment for a cooperative venture, unfair competitive tactics, and so forth. The association, for all of our many industry roles, cannot take positions that address individual company issues and reside outside our mission.
ENTERPRISE: How has your company dealt with the issue?
Biedenbach: As a recycler I share many of these concerns. My company deals with that issue the same way we deal with every competitive issue – by building quality pallets and delivering exceptional customer service.
ENTERPRISE: In 25 years, how will the pallet industry be different?
Biedenbach: The industry will be stronger, more marketing oriented and customer service committed. As part of that, most pallet manufacturers will be selling additional products. We’ll be more of a one-stop shop for end users.
There will also be a greater barrier to entry into our industry because of equipment and overhead costs. There will be more company sales and mergers. These two things will result in fewer pallet suppliers, but we’ll still be an important industry providing an essential product and service.
ENTERPRISE: How will the globalization of trade affect the industry in the future?
Biedenbach: Globalization is going to be behind some of the changes I just described (above). Also, international size standardization is coming. Gunilla Beyer chairs the ISO Size Standardization Committee on which Mark White is a member. If those issues ever are finalized it will have a negative impact on the competitive nature of all manufacturers, since one of the strengths of wood over alternative materials is our ability to customize our product.
On the flip side, size standardization is going to improve the quality of the product produced. Customers will look at pallets even more as a commodity, which is going to drive the need for manufacturers to get smarter in the way they market their companies.
ENTERPRISE: Does the association plan on doing anything different or better next year to improve its services to its members?
Biedenbach: This association has a long history of constant improvements. This striving for increased member value started years ago with Bill Sardo. Every year since day one it has gotten better and it will continue to do so.
NWPCA started a direction three years ago that has proven very effective in enhancing what the association does for its members as evidenced by the growth in membership during those years. The programs that were initiated at that time will be continued and built on during my administration. We’ll evaluate it, tinker with it, make it better – but we’re not going to stray from something that’s working and working well.
ENTERPRISE: Some members have been concerned about the high staff turnover at the association. Does the NWPCA have most of its team members in place for the foreseeable future?
Biedenbach: Emphatically yes!
To expand on this I can tell you that whenever I go to Virginia to meet with the NWPCA staff, I’m struck by how lucky we are to have attracted such highly skilled people to handle the day-to-day activities of the association. Bruce Scholnick brought with him an impressive background in strategic planning and marketing that has introduced a new energy to our association. He’s also great at tearing down artificial barriers and getting us to look at the way we’ve always done things with a new, fresh perspective. It’s helping us move the organization forward and meet new challenges. Edgar Deomano, who has his doctoral degree in wood drying from Virginia Polytechnic Institute and was a colleague of Mark White’s, is amazingly knowledgeable and experienced. We’ve never had someone with his advanced education and background filling the position of technical director. I wish I could talk about each staff member, but I’ll simply say they are all tremendous.
ENTERPRISE: How has the NWPCA reached out to users to educate them about the benefits of wood pallets?
Biedenbach: The trade promotion program has never been more effective – in terms of getting out a positive image with end users and doing it cost effectively. We have nearly 80 strategic alliance partner associations whose members are high volume pallet users in industries identified by members as the most important to the future of their businesses. Our alliance is getting bigger and stronger all the time. The Pallet User website is attracting end users and driving their business to our online member directory. We know this because they visit the site then call NWPCA headquarters with additional questions or e-mail us through a uniquely designated e-mail address. That online activity can be tracked.
In addition to NWPCA communicating positive information about wood pallets and containers to end user associations, end users are telling us their needs and expectations. We have a great panel of end users scheduled at our upcoming Annual Leadership Conference – IBM and Armstrong World Industries have committed. We’ve also added another perspective – the retailer. Our Trade Promotion Committee decided in their 2003 planning that since retailers are influencing the decision-making on pallet purchases, we should include them in our end user mix. The Vice President of Transportation for Wal-Mart will be offering that perspective in Florida. By finding out what end users will need in the next five or ten years, our members can get out in front of those changes.
ENTERPRISE: Please update us on the latest news the association has on the IPPC standard, especially the NWPCA’s work on setting up a program for fumigation.
Biedenbach: I don’t know if your readers are aware of the fact that our industry almost lost the option of fumigation as a treatment method for international shipments. When the European Union Emergency Requirements were introduced in 2001, APHIS said they would only recognize heat treatment as a method for pest eradication, even though E.U. regulations allowed fumigation. NWPCA urged APHIS to reconsider. When it looked like they were holding fast to their position, NWPCA appealed to officials at the Department of Commerce who had an interest in maintaining a free flow of trade internationally. Our efforts to bring the agencies together were successful and fumigation was recognized by APHIS and entered into the E.U. protocol for wood packaging materials.
Now, as we enter another phase with the IPPC, there will be new requirements for not only treatment, but also marking and certification. There is no existing program for fumigation that will meet IPPC requirements so NWPCA has been working with APHIS and we have been designated the program manager for this endeavor. We are doing this to give our industry the option of using fumigation. Some will use it as a transitional method until they decide what kind of heat treating equipment they would like to use. Others, particularly recyclers, will use fumigation as their preferred, long-term treatment option. We expect this program to be fully operational when the IPPC suspension is lifted in the middle of 2003.
