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Father and Son Complement Each Other to Grow Mass. Pallet Company - Eagle Metal 3-in-One Work Table Helps Recycler Upgrade Pallets, Revenues
Mass Pallet: Father and son complement each other in New England pallet recycling business; new Eagle Metal equipment enables company to upgrade used pallets and increase revenues.

By April Terreri
Date Posted: 12/1/2006

HUBBARDSTON, Massachusetts — ­Ask Frank Iacaboni and his son, Anthony, owners of Mass Pallet Inc., what is their secret to establishing a successful business in just 10 years, and you will likely hear: “What we have here is a combination of ‘old school’ and ‘new school’ Italians, and we each complement the other very well,” said Anthony, 32.

   Although they might disagree on some things, one thing is certain: each respects the other’s opinions. “Mass Pallet has gone to new heights in the past six months, which is strictly attributable to my son, Anthony,” said Frank, 62.

   “I handed my son a well-oiled machine,” he added, “and he has greased it to the point where it’s more successful than when I handed the company over to him.”

   The most significant change at the company in recent months has been the purchase of an Eagle Metal Products 3-in-One work table. Texas-based Eagle Metal introduced the new work table in 2005. It can be used by pallet recyclers for three tasks: to splice stringers, repair stringers, and as a work station to build or repair a pallet. A jig for stringer splicing is inserted into the table top, providing a unit for splicing operations; with the jig removed, the table can be used for repairing stringers or as a work station.

   Anthony went to the Richmond Expo pallet trade show in Richmond, Va. earlier this year. “The most important thing we really wanted to purchase was this machine,” noted Frank. “It’s already paid for itself in two months, and it’s turned out to be a real money-maker for us.” Frank initially did not want to make the investment.

   Mass Pallet does as good a job or better than anyone else in the industry, according to Frank and Anthony, who must compete with about five other pallet suppliers within a 30-mile radius. The company is based in Hubbardston, in north-central Massachusetts, less than 20 miles northwest of Worcester.

   “We give our customers top-notch quality, on-time performance, and we are very courteous,” said Frank. “These things have carried us to where we are right now, which is one of the major players in central Massachusetts.”

   Frank’s oldest son, David, 39, will join the family business early in 2007 to take charge of plant maintenance.

 

Second Career

   This is not a family born into the forest products industry, but it is a family with lots of business connections and good relationships within the surrounding community.

   Frank was semi-retired from his coffee catering business when he was approached by a friend in 1997 with the idea of starting a pallet company. An old, decrepit pallet plant in the area was for sale.

   “I knew the person who had owned it,” Frank recalled. “I knew he had been successful in this business, so I went to pick his brains.”

   “We live in Leominster,” he added, “which used to be the major plastic capital of the world. And we also had so many connections in major corporations that it wasn’t a question of if we’d be successful because of the people we knew in the industry.”

   Frank saw a veritable diamond-in-the-rough when he looked at the old pallet facility; eventually, he bought it. “It was a broken-down building, and water had leaked into the offices. It was really a total wreck,” he said.

   The shop, which contained 10,000 square feet, and three offices were soon renovated, and Mass Pallet began operating. A second shell of a building – with only a dirt floor – was soon added as the business quickly grew. The newer building also has 10,000 square feet and is currently being used to repair pallets. “We are still not sure what we will use that building for, but it is slowly morphing into a state-of-the-art facility,” said Frank. The two buildings sit on four acres of a 16-acre parcel of land, so the company has room for future expansion.

   Sales have increased regularly since Mass Pallet began operating. The company reached its highest sales volume, $1.6 million, in 2005, but its steady, growing performance has not been without challenges. “We have lost major corporations moving out of the area and out of the country,” said Frank, or customers moving to pallet rental pools. “But somehow, we overcome these changes. We live by the phrase that ‘every crisis makes us stronger.’ ”

   Mass Pallet has not experienced a serious decline in its 10 years of business, according to Frank, although 2006 sales will not be as high as 2005. The company remains financially stable, as Frank and Anthony adjust to the flow of the market’s peaks and valleys.

   “When we turn the key in the morning at Mass Pallet, we know we own the property, and that gives us a lot of breathing room,” said Frank. “We make changes when it’s absolutely necessary – like having to lay people off if we have to, or cutting to a skeleton crew. We watch our expenses closely, recognizing that losing customers is part of doing business nowadays.”

   The Eagle Metal 3-in-One work table has enabled the company to improve #2 or B pallets into a higher grade, #1 or A, which fetches a higher price, noted Anthony. About 10% of all incoming GMA cores can be upgraded from B pallets to A pallets with the Eagle Metal 3-in-One work table, he said. “This is very significant because you are talking about almost doubling the price of each pallet.”

   The stringer splicer on the Eagle Metal 3-in-One work table particularly helps Mass Pallet to meet the demand for unusually long stringers. “We might have a requirement for a 74-inch stringer, which is a tough size to come by in a large volume,” said Anthony. “All I have to do is take two pieces of wood and plate them together with the splicing machine to get a usable 74-inch stringer. We have zero waste here.”

   The installation of the Eagle Metal equipment went very well, as did dealing with the company’s sales representative, Clarence Leising. “Clarence is very knowledgeable, and dealing with him is a pleasure,” said Anthony. “He came down here personally and explained the machine. It was a real learning experience for us. The machine works great, serves its purpose, and does just what it was advertised to do.”

   Mass Pallet has evolved over the years. Although it formerly was devoted 100% to pallet recycling, now about 75% of its business is recycled pallets and the other 25% is manufacture of specialty pallets.

 

Mass Pallet Operations

   Most incoming pallets at Mass Pallet arrive from a variety of food and grocery distribution centers as well as from agribusiness stores and other businesses that accumulate excess pallets. The company has a fleet of 40 trailers, with many left at customer locations to be filled with surplus used pallets. The Mass Pallet plant has 12 docks for shipping and receiving and is equipped with eight forklifts. The business employs about 25 workers.

   Used pallets are moved to benches where they are sorted and repaired as needed. Twelve workers are involved in these pallet recycling operations. Another six workers usually are devoted to repairing GMA pallets, and another two assemble custom or specialty pallets. The mix may change, depending on changes in market and demand.

   The lumber recycling operations involve about four men. Pallets that are not repaired are disassembled on two Smart Products bandsaw dismantlers that are usually operated by one man, and the recycled lumber is cut to length either on an auto-feed Smart Products trim saw operated by another man or a Smart Products chop saw. Reclaimed lumber is fed to a rotating round table, where the fourth worker sorts and stacks the used lumber. Theses operations dismantle about 1,000 pallets daily to recycle the used lumber.

   The man running the chop saw takes used stringers and cuts them to appropriate length, and used deck boards are cut to length on the auto-fed trim saw. “It’s a streamlined process,” said Anthony. “We wouldn’t have been able to take on the new, specialty pallet business without this equipment.”

   Finished pallets are put into inventory, stored either in the company’s buildings or truck trailers. “A lot of our A grade pallets go directly onto trailers because we have a hard time keeping up with that type pallet since there is such a demand for it,” said Anthony. The company contracts for most of its trucking services. “We make all the local deliveries ourselves,” Anthony said.

   About four of the largest customers use their own trucks and trailers to pick up pallets. “We give them a better price, and we always have a trailer-load ready for them to go,” said Anthony. “This idea is to my father’s credit.”

   About half of the company’s pallets are in storage areas ready to ship and the other half has yet to be processed. “We are working to have more of a percentage on the finished side,” said Anthony. “Hopefully it will be about 70-30.” At the same time, he strives to have a “nice nest egg of repairable pallets” on hand so employees have work.

   Weekly production is about 10,000 pallets. “About 7,500 of those are repaired from incoming GMA cores, and the rest are ‘combo’ pallets or completely remanufactured with recycled materials,” said Anthony. ‘Combo’ pallets are made from a combination of new and recycled lumber, usually about half and half. “This is good for customers who want a brand new-looking pallet, but they don’t want to pay a brand new price,” said Anthony.

   The company disposes of waste wood in several ways. Some is stored in the yard, where local residents can pick it up for free for firewood. The rest is supplied to another company that grinds the wood.

   Mass Pallet is equipped with Stanley-Bostitch pneumatic nailing tools and uses Stanley-Bostitch collated nails. Saw blades are supplied by Country Saw & Knife.

 

Specialty Pallets

   “I am a hands-on bandsaw operator,” said Anthony, “and when I was down in the ‘pit’ cutting up the pallets, I could never stop thinking of how I could make things better. I finally told my dad that we needed to spend money on a new Smart Products trim saw and a roundtable for the specialty market.”

   Frank was hesitant at first to make the investment, but the company bought the equipment, and it has paid off significantly. The additional Smart Products equipment enables the company to reclaim used lumber more efficiently and to remanufacture it into recycled components for custom pallets. “This business sector is growing, and this is where I want to take the company,” said Anthony. “The profit margin is greater, and it’s less of a competitive market.”

   The company is able to generate revenues from pallet removal services, too. When it provides pallet removal services, the company benefits two ways. It earns revenue from the service of taking away the surplus pallets, and the cores can be repaired into recycled pallets or dismantled to reclaim lumber that will be used to build or repair used pallets.

   Some common sizes supplied by the company are a 42x42 pallet for a company that manufactures a type of lock, 48x42 for a customer that manufactures polymer material. Most common sizes are the 48x40 GMA and 48x48. “We make a 36x40, considered a Gaylord pallet for the plastics industry, since we are in the plastics capital of the country,” said Anthony. “For one customer we make a 50x50 pallet,” explained Anthony. “I put two new stringers on the outside, and the middle stringer and all the deck boards are recycled. We assemble them all by hand, and they look like brand new pallets.”

   About 50% of its volume is supplied to companies in agribusiness, about 40% to the plastics industry, and the remaining 10% to other industries, such as metals and groceries.

   “For one customer we make a 50x50 pallet,” explained Anthony. “I put two new stringers on the outside, and the middle stringer and all the deck boards are recycled. We assemble them all by hand, and they look like brand new pallets.”

   The company buys some pre-cut lumber for making ‘combo’ pallets and for customers that prefer new repair parts. Mass Pallet buys both hardwood and softwood cut stock, but mostly dense hardwood and
aspen.

   A few customers require heat-treated pallets for export shipments. Mass Pallet contracts with another company for pallet heat-treating services.

   Mass Pallet offers good pay and benefits to its hourly and salaried workers. “If it weren’t for these guys, we wouldn’t be able to expand the business the way we are,” Anthony said. The company also employs about six men under a prison work release program. “They work very hard,” said Anthony, “and if they prove themselves, we will hire them when they get out.”

   The company also financially supports various local nonprofit organizations and activities, including special events, sports and charities.

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