Wirebound Container Industry Expects Modest Yet Steady Groweth
Specialized segment of container industry expects modest yet steady growth; new product readied to compete against reusable plastic in agricultural market.
By Tim Cox
Date Posted: 2/1/2000
Wirebound containers, those crates made of thin wood slates and held together by wire and commonly used for shipping certain types of produce and also industrial products, have been around longer than pallets. It is a market that still continues to show steady if modest growth, however, and the industry is poised to introduce a new product to go up against modern-day competitors.
The wirebound container industry is inextricably linked to Stapling Machines. The New Jersey-based company is credited with originating loop-closed wirebound boxes. It began manufacturing wirebound box-making machines in 1904 and today is the only U.S. manufacturer of such equipment.
Stapling Machines closely follows the markets for wirebound containers, noted Dave Dixon, the company’s executive vice president. The market for wirebound containers is about $125 million to $130 million, he said, and is almost evenly divided between two broad segments, agricultural and industrial. Annual sales of wirebound containers for industrial applications are about $60 million while sales for agricultural applications range from about $65 million to $70 million. A standard wirebound produce container may sell for $1.25 to $1.60; wirebound containers for industrial applications may sell for anywhere from $3 to $90. About 20 plants manufacture wirebound containers.
Common industrial products that are shipped in wirebound containers include forgings, castings, cast iron bath rubs, insulators, and boilers. In the agricultural market, sales are targeted mainly to growers or packers of sweet corn, green beans, squash, and various types of greens.
The market for industrial wirebound containers continues to grow at an annual rate of about 5%, according to Dave. The growth is being supplied both by the growth of customer businesses in the market itself and new opportunities within the market, he indicated. "The reason for it is the durability of the container. It can be used for products that tend to be abused in transit or are delicate — it gives them protection." The agricultural market is growing, though more slowly, at rates of about 2% to 3% annually, he said.
Corrugated has a much larger share of the market for containers used for shipping fresh fruits and vegetables, Dave conceded, 80% or more compared to only 7% for wirebound. However, the reason is at least in part because wirebound containers serve a niche within the produce market. The niche is essentially those applications where corrugated does not perform well, such as produce that requires hydrocooling — ice or ice water — and produce that is in transit for long periods of time and must be adequately ventilated.
One of the nation’s premiere forest products companies, Universal Forest Products, recently entered the wirebound market. Universal acquired Atlantic General Packaging in Warrenton, N.C. in early 1998. Atlantic already had wirebound container manufacturing operations, including 12 machines supplied by Stapling Machines; it’s marketing efforts are focused particularly on industrial markets.
There are several advantages of wirebound containers, said Andy Galombeck, whose career has been with Universal and now is industrial sales manager at Atlantic. They require less board feet of wood material, which makes them more competitive on price against a nailed wood box, for example. Yet wirebound packaging solutions offer high strength-to-weight ratios, which makes them well suited for applications where multiple stacking and outdoor storage are considerations. "We win in efficiency and cost of material," said Andy. Wirebound containers also can be produced quickly in large volumes, he noted.
Dave ticked off a number of other advantages and benefits of wirebound containers. They are not affected by moisture, a characteristic that makes them especially applicable for shipping and storing heavy loads in environments of high humidity — they can be stored under load outdoors, for example, depending on the contents. They are more durable and resilient yet lighter than a conventional nailed box. They are economical; prices for produce containers may run slightly more than corrugated, depending on the grade of corrugated material, but are much lower than plastic. The only significant drawback with regard to corrugated is that graphics are more easily printed on paper and with better quality, although this is a consideration mainly for agricultural markets and not industrial products. Wirebound containers also permit visual inspection of contents throughout the shipping cycle, which helps pin-point liability in the event of damage.
Wirebound containers also can be re-used. If damaged, wirebound containers may be recycled through grinding; the wire may be removed from the ground wood fiber with the use of magnetics, just as pallet nails are. Like scrap pallets, the resulting wood fiber is suitable for boiler fuel, animal bedding, and mulch.
The two most common methods of processing raw material into wooden components for wirebound crates are resaw and veneer operations. Manufacturers of wirebound crates for fruit and vegetable markets typically have veneer operations because the containers are made with very thin slats. Suppliers to industrial markets mainly manufacture material through resaw operations because the wood components are slightly thicker. Veneer operations tend to require larger capital investment, although a veneer line will yield more board feet than a resaw operation. Wirebound container manufacturers tend to use hardwoods because the material is stronger, Dave indicated.
Material can be resawn on the same machinery used to resaw material into pallet components. Saws must have the capability to cutting to 3/8-inch. In addition, a saw is required to cut cleats to length and a miter saw is used to cut angles on cleats. Some wirebound container manufacturers also may plane material. "That basically would be it," said Dave, besides stitching machinery.
Unlike the pallet industry, where companies can buy cut stock or pre-cut material from other pallet companies or sawmills, sawmills and lumber remanufacturers typically do not produce wooden components for wirebound packaging, according to Dave.
Stitching machines can produce about 1,000 typical fruit and vegetable containers per hour. They have various levels of automation and may require about three to eight workers to operate. Like pallet assembly machines, they can be set up for different sizes and configurations. Pallet-like bases for some containers are made on a separate machine, and the two components are attached. Wirebound containers are shipped to the customer in knock-down form and then assembled with simple hand tools.
Stapling Machines has worked with wirebound container manufacturers to develop a new wirebound container, and Dave expects it will spur "substantial" growth in the agricultural market. The new, shelf-ready produce container has an open top and slats that are oriented vertically instead of horizontally. The manufacturing concept, however, is the same; the wood components are stitched together with wire.
The new container was developed in direct response to the entry of plastic containers into the produce industry. Like plastic, it streamlines merchandising because the container is designed to go directly to the retail shelf; store customers select produce directly out of the box. The retail-ready package will save labor for grocers and stimulate sales, said Dave. "It gives the product a farm-fresh perception to the consumer." Manufacturers of the containers are just beginning to market them, he said. They can be re-used, but they are economical enough so that container management — tracking and counting — is not required, he said, "like you would have to do with plastic containers."
"We’re having success with that strategy," Dave added. "Retailers are starting to recognize the potential liability of plastic containers." Plastic containers require a significant investment of resources for the logistics of tracking and managing the units, he suggested.
Dave also foresees new growth on the industrial side coming in applications for shipments of bulk liquid loads that would pair a wirebound box with an interior package, such as a plastic bag that would actually contain the bulk liquid.
In addition to supplying stitching machinery, Stapling Machines provides various research and development support services for its customers and potential customers. For example, the company offers to do feasibility studies to help determine if a wirebound container manufacturing operation is potentially viable. Stapling Machines also operates its own complete package testing laboratory. The laboratory is equipped to, among other things, test packaging materials and containers made of other materials.
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