New Partner Helps Rekindle Florida’s Pallet Services
Florida pallet recycling business is invigorated after industry veteran takes on new partner.
By Diane Calabrese
Date Posted: 2/1/2000
PLANT CITY, Fla.—A forklift kindles a romance. Healthy portions of tenacity and expertise ignite a company after a financial collapse. And a new partner invigorates an already solid approach to a business.
Those are just the basic elements of the story of Pallet Services, a company that churns out 40,000 recycled pallets each month. The business, with headquarters in Plant City, which is located about half-way down the Florida peninsula and just east of Tampa, is co-owned by two couples, George and Diane Bernico and Mark and Sonia Tighe.
Diane has the corporate title of chief executive officer, Mark, president, and George, general manager. Sonia is employed by a publishing company and does not have a day-to-day role at Pallet Services.
George and Diane established the business in 1993 and partnered with Mark and Sonia in 1997. The short history both ends and really begins there.
The longer history of Pallet Services spans three decades. It stretches to the early 1970s and Chicago, where George entered the pallet business with a previous partner. At the time, George worked in grocery warehousing. He witnessed a colleague start a profitable pallet business, and George knew he was looking at a growth opportunity. "There was little competition [in pallets] then," he
From his first foray into the pallet industry, George focused on pallet recycling. Soon after launching the business in Chicago, he moved it to Oshkosh, Wisconsin, where he ventured briefly into making new pallets. "I tried new pallets long enough to know that unless you have a bunch of money to invest, you are not going to make money on them,"
Oshkosh is where George and Diane met in 1980. She came in looking for a job. "I asked if she could stack GMAs 15 high," said George. She could. He was impressed. Diane had worked for K-Mart and was an experienced forklift driver. They married and decided in 1981 to move to Florida and start over.
In Florida, their pallet recycling business prospered, and they decided to sell it in 1991 under an owner-financing arrangement. George and Diane tried something totally new: they bought and operated a marina at Fort Walton Beach on the coast of the Florida panhandle. "I had the most fun year of my life in Walton Beach," said George.
Unfortunately, under its new ownership, the pallet business they sold was foundering. The business quickly unraveled and the new owner went bankrupt. Under the terms of the owner-financing arrangement, George and Diane were hit with a financial loss. "We lost over $1 million on that business," he said. They assessed their options and decided to sell the marina and return to the pallet business.
They launched Pallet Services in the same location in 1993. Because of the bankruptcy, they were unable to obtain a line of credit. They had to pay for supplies "a couple of hundred dollars at a time."
"I like to start [a business] off, watch it grow," said Diane. She and George started and sold several other businesses besides their original pallet company. Diane has bolstered her business expertise with formal study. She studied business as an undergraduate student and since then has added classes in accounting and other subjects.
As soon as the new business started to stabilize, the Bernicos thought again about selling it. That was how they met Mark, a potential buyer. Mark, an experienced pipefitter, and his wife, Sonia, had moved to Florida when she was transferred by her employer. Dissatisfied with the work available in Florida for pipefitters, Mark earned a real estate license and tried sales. He quickly concluded, however, that the real estate business was not for him. About four years after arriving in the Sunshine State, Mark decided to buy a business.
Working with a broker, Mark looked at several different businesses, including pallets. "I looked at Pallet Services two or three times," Mark recalled. The exploratory visits allowed Mark and George to become acquainted. The chemistry between them was strong enough so that both agreed to alter their plans and become business partners. Mark and Sonia bought a 50% share in the company a little over two years ago.
George gives Mark a lot of credit for bringing energy and fresh ideas that helped invigorate the company. As for Mark, he has enjoyed being in business and in the pallet industry, although at first he knew virtually nothing about pallet recycling. "I’d welded off pallets," Mark said, "but I didn’t know a pallet from a silver dollar."
He learned quickly, and things changed rapidly. Pallet Services opened a second facility in early 1999 in nearby Lakeland, where it sorts incoming pallets. The company handles about 2,000 pallets daily combined at both facilities.
In late 1999, Pallet Services contracted with the pallet rental company PECO to sort, grade and warehouse PECO pallets. The Lakeland facility takes the biggest portion of that work and functions as a PECO depot.
The bright red PECO pallets have a diamond logo and the words "Owned by PECO, Inc." stenciled on them. PECO makes a concerted effort to recover pallets that may "leak" from its rental programs, including compensating pallet recyclers for handling and storing PECO pallets. (Recyclers who recover PECO pallets may report them to the company by calling the rental company toll-free at (888) 799-PECO.)
Plant City is in a region known for its agriculture. In Florida, Plant City and strawberries are virtually synonymous. The community of 25,000 has a strawberry festival in the spring. It does not take its name from anything that has to do with growing plants, however. The community’s namesake is Henry Bradley Plant. Plant City has a strong local economy independent of agriculture and is home to 90 manufacturing, distribution and warehouse facilities.
Strawberry growers are on the list of Pallet Services’ customers; shipping the fruit requires a special kind of pallet to handle the "flats" or trays of strawberries. "The board spacing on a strawberry pallet is designed with 12-inch center boards," explained George, "so every strawberry flat lands on a board." The design prevents flats from sagging, which can lead to damaged fruit.
Other important customers of Pallet Services include makers of computer paper, meat processing plants, and produce growers. The company has about 85
Repairing and rebuilding broken or damaged pallets is the company’s main trade. Pallet Services normally does not use new lumber to recycle or repair pallets. It recovers good lumber from discarded or damaged pallets and uses it for repairs.
Wood that cannot be reused is sold to companies that grind wood fiber. "I had a grinder for several years," said George, "but it was too noisy and too messy." An incinerator was eliminated because of environmental concerns.
Mark and Diane staff the Lakeland facility and also handle purchasing. Eleven people work at the Plant City location. "All employees are specialists," said George, who is responsible for sales. "They don’t switch jobs."
The Plant City location is nearly four acres, and the company has four buildings with about 9,000 square feet under roof. The Lakeland facility includes a covered dock of about 7,500 square feet and 40,000 square feet of outdoor storage space. There are concrete loading areas at both sites.
One thing the company is known for is speed, George said. The company can load a flat-bed tractor-trailer with nearly 600 pallets in 12 minutes, he said. For big loads or long hauls the company uses common carriers.
The two newest pieces of pallet recycling equipment at Pallet Services rank at the top among the machines that George has evaluated. Both were purchased from Pallet Repair Systems.
The company bought a Pallet Repair Systems J60 bandsaw dismantler in early 1999 — trading in a Pallet Repairs Systems Triad disc-type dismantler — because it anticipated a heavy influx of Euro pallets, but it never materialized. "We got out of Euro pallets, which we did for two or three years, because they became too hard to come by," said George.
The company decided to keep the J60 bandsaw dismantler. It feeds used lumber to the machine that George considers the star of the lumber recovery operations, a Pallet Repair Systems MJ60 Optimizer reclaim saw. "The MJ60 produces boards faster than anything we ever had," he said. "We are now as many as 10 stacks ahead." The company also is equipped with a Pallet Repair Systems single-head disc-type pallet dismantler.
George has had a business relationship with Pallet Repair Systems since 1993. He attributes the close relationship he has with the machinery supplier to the performance of Pallet Repairs Systems’ products and the personal service of sales representative Jeff Williams. "Jeff has walked us through every purchase," said George, "including leasing and financing." Moreover, when exchanges and upgrades had to be made, "Jeff has always been willing and able to do them."
The supplier’s machines have been a boon to Pallet Services, said George. They have resulted in "the biggest production change I have ever witnessed in my 30 years in the business," he said.
Repairs and pallet assembly work are performed with Duo-Fast nailing tools.
Other people in the pallet industry helped him early in his career, said George, and taught him a lot. He singled out John Soper in Chicago and Sal Sanacola in Milwaukee, men he labeled "true pioneers in the pallet recycling industry."
When he is not working, George enjoys fishing, boating — he has a 16-foot rig — and golfing. Diane also likes to fish. Her other interests are exercising at a gym, working on her house, and reading. Mark and Sonia also enjoy golfing.
Before he became a journeyman pipefitter, Mark earned a degree in sociology at the University of Kansas. He is happy with the decision he made to become a business owner, but he has a pragmatic view of the blend of the upside and downside to being in business.
"Owning your own business, you have more freedom than in a nine to five job," said Mark. "Sometimes you have to live and breathe it, though."
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