The Pallet Factory Increases Production of New Pallets

MEMPHIS, Tennessee — “Whatever it takes” to get it right for the customer, “we do it,” said Michael Doyle, founder and president of The Pallet Factory Inc.

            With its three locations, two in Tennessee and one in Kentucky, The Pallet Factory manufactures new pallets and recycles used pallets to the fullest extent possible.

            Since its inception in 1977, The Pallet Factory has focused mainly on lumber recovery and pallet recycling. In the last three years, however, it increased new pallet production significantly. The company is currently producing about 40,000 new pallets per week.

            One of the biggest changes at The Pallet Factory in recent years has been this move to increase new pallet production. New pallets now account for about 33% of pallet production. Total weekly pallet production is about 110,000, which includes new, combination, re-manufactured and recycled pallets.

            For manufacturing new pallets, The Pallet Factory relies on sawmills to supply it with pre-cut pallet deck boards and stringers. Virtually all (95%) of the cut stock is hardwood, according to Mike’s son, Joshua (Josh), who is vice president. The company has suppliers in Tennessee, Kentucky, Arkansas and Missouri and buys in truckload and railcar quantities.

            In its recycling operations, The Pallet Factory receives about 85,000 used pallets weekly. It dismantles about 13,000 pallets per week to reclaim used deck boards and stringers for repair stock and to assemble pallets of recycled lumber.

            The Pallet Factory has been buying heat-treated spruce-pine-fir (SPF) and aspen pallet stock from Canada for some time, said Josh. That will soon change, however. By mid-year, the company will be heat-treating pallets with a Converta Kiln and be a certified supplier of heat-treated pallets. It will continue to buy some SPF because it has customers that request it for disposable pallets; the finished SPF pallets will be heat-treated.

            Plant manager Jaime Doyle, Mike’s nephew, researched kiln and heat-treating equipment suppliers before choosing the Converta Kiln Inc. dry kiln and pallet sterilizer. Converta Kiln is based in Bartlett, Tenn., not far from the Memphis branch of The Pallet Factory, and the convenience of its proximity was a plus.

            The Pallet Factory selected Converta Kiln for many reasons, said Josh. “They’ve been building kilns for 35 years,” he noted. “It’s the best-built kiln on the market. The burner is 3.5 million BTUs. We can charge and heat-treat 630 48×40 pallets every two hours.”

            Three temperature probes are configured so “as soon as the third probe clicks to 133 degrees, the core temperature,” it “takes just 45 minutes” from that point to complete the treatment, said Josh.

            The Converta kiln-sanitizer will enable The Pallet Factory to meet the requirements set by the International Plant Protection Commission (IPPC) for treating softwood and hardwood wood packaging. (IPPC specifications for phytosanitary requirements dictate a core temperature of 133 degrees Fahrenheit in order to eliminate the risk of wood-eating insects.) “We will be using propane or natural gas,” said Josh, switching back and forth between whichever fuel is cheaper.

            Although The Pallet Factory has strong roots in pallet recycling, adapting to meet customer requirements has led to growth in a number of directions.

            And customer requirements may be quite varied. “We have a company that orders 21 different pallet sizes from us,” said Michael, ranging in size from 36×31 to 77×25. If a customer needs crates or other kinds of packaging, The Pallet Factory will supply them.

            There have been considerably supply and price pressures on low-grade hardwood markets in recent months, Josh noted. He pointed to the strong demand for rail ties and flooring, which compete with the pallet industry for raw material. Prolonged wet weather, which hampered logging, compounded the scarcity — and corresponding rise in prices.

            Michael serves on the board of both the National Wooden Pallet and Container Association (NWPCA) and the Western Pallet Association (WPA). He also is a member of the Canadian Wood Pallet and Container Association. Involvement in the pallet industry trade groups gives him ample opportunity to observe industry trends.

            To counter the shortage of low-grade hardwood, Michael began to buy eucalyptus pallet stock from South America. “It’s a hardwood that’s relatively dense,” he said. Josh likens eucalyptus to poplar in density.

            The Pallet Factory has locations in Nashville and Memphis, Tenn. and Lexington, Ky. The company purchased a new 40,000-square-foot plant on four acres in Nashville two years ago. The new plant is equipped with a host of MSI (Machine Specialists, Inc.) pallet recycling equipment: bandsaw dismantlers, Trim-Trac trim saws, and a sorting system with four tracks. The Nashville plant also has a Viking Champion for automated nailing of some pallets.

            (Editor’s Note: Automated Machine Systems Inc., or AMS, now owns MSI and all new MSI equipment carries the AMS nameplate. AMS, which is headquartered in Jenison, Mich., purchased MSI in early 2003.)

            “Our Memphis facility is our most automated,” said Josh. The Memphis plant has four Viking nailing machines: three Viking Turbo 505 machines and a Viking Champion. An automated pallet repair line is designed for nailing ‘on the fly’ and features MSI equipment. MSI bandsaw dismantlers, MSI Trim-Trac saws and an MSI un-stubber are used in the pallet dismantling and lumber recovery operations.

             The 40,000-square-foot Memphis plant is designed to realize the full benefits of automation in pallet recycling. MSI de-stackers dispense unsorted pallets one at a time at the start of the line. Pallets requiring prepping – typically, removing a damaged leading edge deck board – are slid off the line and then returned. Otherwise, every pallet moves toward the automated sorting area. Prepped pallets are repaired by workers nailing ‘on the fly’ as the pallet moves by on the conveyor. Pallets are graded and sorted at the end of the line and stacked automatically, and pallets to be disassembled are routed to dismantling operations. The automated sort and repair system can accommodate pallets of various sizes.

            The company uses reclaimed pallet components for repair stock and to assemble pallets made of used lumber.

            The four Viking automated nailing machines are used for new pallet assembly. Custom pallets and small runs are assembled manually with Stanley-Bostitch power nailing tools and fasteners. Local companies supply saw blades and bulk nails.

            The Pallet Factory has a fleet of 450 trailers and 17 single-axle tractors. Trailers are left at customer locations to be filled with surplus and damaged pallets; when a trailer is filled, it is retrieved and another empty trailer left in its place.

            With 210 employees, The Pallet Factory runs two shifts at Memphis and Nashville and one shift in Lexington. There is an hour-long break between the day and evening shifts in Memphis to give the maintenance crew time to check and service equipment. Jeff Moran is the maintenance supervisor in Memphis.

            Automation “has been good for us,” said Michael of the Memphis plant, which was upgraded in 1998. “It’s taken the back-breaking” work out of handling, repairing and sorting pallets.

            The innovations in Memphis are illustrative of the philosophy of The Pallet Factory, said Randy Averesch, comptroller for the firm. “We’re a progressive company,” he explained. “We’re not afraid to try to use new things.”

            Keeping pace and moving ahead at the same time are twin goals for The Pallet Factory. To train workers, the company often contracts for short courses to be taught on site in such subjects as wood grading and equipment use.

            The Lexington plant has been in place for 14 years. It focuses exclusively on pallet recycling. Pallets that cannot be easily repaired are moved to one of the other plants.

            Wood waste from the Memphis facility is burned. “We have incinerators,” said Michael. “They’re all EPA-approved.” Wood waste from Nashville and Lexington are hauled to another company that uses it to make mulch.

            When customers request fumigation, The Pallet Factory contracts with a pest control company to fumigate pallets on-site in Memphis.

            Over the years, The Pallet Factory has expanded to meet whatever request a customer may have. Even in Memphis where automation is the watchword, the company does a lot of custom work. “We do a lot of odd size, scratch, by hand,” said Michael. Besides making new, ‘combo’ and recycled pallets, the company also builds crates and containers.

            The Memphis location gives The Pallet Factory good access to markets and customers in Tennessee, Missouri, Arkansas and Mississippi. The plant delivers pallets to customers within a 200-mile radius – about the same distance served by the Nashville and Lexington plants.

            Memphis is a cosmopolitan city with ties to the newest technologically based industries and the strong tradition of American agriculture. The city and the surrounding region provide a rich mix of manufacturing customers that need pallets. GMA pallets are a large core of the business, but over the years The Pallet Factory has diversified more and more into non-GMA pallets.

            “We try to be a people” company,” said Michael. That means serving and also doing the most possible for employees. “We’ve always wanted to be able to furnish medical insurance for all our employees.” This year the company began providing Blue Cross-Blue Shield health insurance coverage for all employees. The Pallet Factory also has a 401K program to allow employees to save for retirement.

            Being a board member at NWPCA and WPA has been valuable, said Michael. “I think the more active you are, the more proactive you can be.”

            Michael has a great deal of insight into the pallet industry thanks to his years of experience. “After you’ve been in it for 27 or 28 years, you get to know what’s happening,” he said.

            As busy as he is, Michael gets to take time away from the business for two activities he enjoys. “I like to hunt and fish,” he said, “mainly for the fun of it.”

            State-of-the-art facilities have been essential elements in the success at The Pallet Factory, said Michael. Perhaps equally significant has been the total pallet management that the company can offer clients, guaranteeing customers a steady supply of fresh pallets and quick removal of used pallets. The Pallet Factory can also help customers with pallet design.

            “It’s been challenging,” said Michael. But he clearly enjoys being able to work in an industry that he believes is poised for more automation and more significance in the future.