LANCASTER, Penn. -- United Pallet started rebuilding pallets with the basics: wood in the form of cants, a 10-inch table saw, a bucket of nails and a hammer. Working with the minimum essentials is one way to gain a thorough understanding of how pallets are made, and Ralph Farris, president of the company, is glad to have had the experience.

Ralph and his stepfather, Paul Rainer, who holds the title of corporate secretary and treasurer, are shareholders and employees of United Pallet. Today, United Pallet focuses on pallet recycling.

The hammer did not last long as the tool of choice for driving nails into hardwood lumber. Within 24 hours, Ralph bought a battery-operated Paslode nailing tool to do the work.

Ralph and Paul started the business in their spare time at night and on weekends. Other than the power nailing tool, it was a pretty ‘bare bones’ operation for about a year as they worked out of Ralph’s garage and on an adjacent concrete pad.

In order to make deck boards when they started, Ralph ran the cant through the table saw once, then flipped it over and ran it through again to finish making the cut. They took the lumber out to the concrete pad for assembly. It was time consuming work. Even with part-time help, working a full day on the weekend, Ralph and Paul could only build 50 or 60 pallets per man at most. Still, they were able to take care of customers that wanted 100 or as many as 200 pallets, and they gradually built a steady base of customers.

United Pallet was big enough to support Ralph full-time in late 2000, and he resigned his job as transportation manager for a large company. Paul continues to work in the business on a part-time basis.

United Pallet originally was organized as a division of Disposal Services Agency Inc. in January 1999. Ralph started with another shareholder, and they planned to broker pallets. (Ralph and Paul subsequently bought out the other shareholder.) In his capacity as a transportation manager, Ralph had learned something about brokering, and he was good at getting on the phone and helping customers get what they needed in their time-frame and at the price they were willing to pay. "When the company originated, we were happy doing brokering," said Ralph. "Paul came on board and had the foresight to conclude, 'We need to do our own pallets.' " That's how the building enterprise began in Ralph's garage.

Ralph and Paul quickly became convinced the growth potential for their business was in pallets. They phased out the brokering of rental trailers and cardboard recycling, which were among the activities of Disposal Services Agency.

By the end of the first year, United Pallet had moved into a 4,000-square-foot building. In the spring of 2000, Ralph and Paul went to Richmond, Va., for Expo Richmond, the East Coast Logging and Sawmill Equipment Exposition. The trade show is a major venue for pallet industry machinery and equipment.

At Expo Richmond, Ralph and Paul took a special interest in Smart Products, which manufactures pallet recycling equipment, and also Stanley-Bostitch, which manufactures power nailing tools. By the spring of 2001, Ralph and Paul had invested in a Smart Products band saw dismantler and chop saw and added Stanley-Bostitch power nailing tools. In the spring of 2002, the business had grown to the point where they moved their operations into a 14,000-square-foot building.

United Pallet’s main focus is pallet recycling -- rebuilding and then selling used pallets -- and the company is oriented heavily to the GMA market. About 98% of its business is in recycled GMA pallets, Ralph estimated. The company also makes some custom pallets and brokers a small volume of pallets.

United Pallet brokers orders when a customer has a one-time need for new pallets. In that case, "we hunt down, price and deliver," said Ralph. Occasionally the company gets orders for plastic pallets, which it collects, stores and re-sells. "Most people are looking for a very small number of plastic pallets" for in-house use, he said.

The investment in pallet recycling equipment gave the company a big boost in production. "Our company really took off with Smart," said Paul. United Pallet repairs 25,000 to 30,000 pallets per month and now has 15 employees, some of them part-time.

Production on the Smart Products dismantler and chop saw varies to some extent with the operators, said Ralph. Another factor is whether the pallets being disassembled have been constructed with nails or staples. Ralph summed up the performance of the machines by saying, "Smart does a very fine job."

United Pallet normally uses one worker to run the Smart bandsaw dismantler to reclaim lumber; daily production is about 400 pallets or more. The chop saw operator cuts the lumber to length and also distributes the used components to the company’s six pallet repair tables, replenishing boxes at each work station. The Smart chop saw can cut as many as four stringers at once or deck boards stacked to 6 inches. The Smart equipment has proven to be "low maintenance," said Ralph, even though it is running eight hours per day, five or six days each week.

United Pallet relies on each worker at a repair table to inspect a pallet and determine whether it requires repair or should be dismantled for parts. However, Ralph is considering changing operations in order to have a single point for sorting incoming pallets; only pallets needing repairs would be moved to the repair tables, and others would go directly to the dismantler.

United Pallet’s building has nine loading dock doors, so there is ample room for loading and unloading trucks. It is a big improvement over the company’s first facility, which had no dock and required a hand jack to unload trucks.

United Pallet serves a wide range of customers, including businesses in the food and furniture industries. Being located in Lancaster, Penn. is a good vantage point for serving customers in Pennsylvania, New Jersey, Delaware, Maryland, and Washington, D.C. Lancaster, a city of about 55,000, is situated about 35 miles southeast of Harrisburg, the capital of Pennsylvania.

"We do all pick-ups and deliveries ourselves," said Ralph. Like other pallet recyclers, the company leaves trailer vans at locations of larger customers to collect excess pallets. When the trailer is filled, United Pallet drops off an empty one and retrieves the full load. United Pallet has a fleet of 22 trailers and two tractors.

United Pallet relies 100% on reclaiming and recycling used lumber from pallets for repair stock. "We buy no wood whatsoever," said Ralph.

Waste and scrap wood is hauled to another business that grinds it into mulch; no money changes hands between the two companies.

Ralph and Paul are considering a number of changes to the company’s operations. For example, they are considering adding pallet tops as a product and also combination pallets -- pallets made of both new and used lumber. They are also looking at ways to automate, such as adding stackers and conveyors, and are in discussions with pallet machinery suppliers.

When they began, they had a limited knowledge of pallets and pallet assembly. "As far as putting pallets together," said Ralph, "I didn't know anything." Overall, it was "just hands on, jumping in and working in the mud" that got the business off to a good start.

With their industry and business backgrounds, however, Ralph and Paul had experience in management, sales and customer service. They learned about pallets as fast as they could and added their other expertise. "Customers want a good price, quality, on-time delivery and service," said Paul. Those points are the marketing focus of United Pallet.

"We do twenty-four-seven delivery," said Ralph. "We have an automated phone system, and I carry a pager." When a customer leaves a phone message, Ralph is paged immediately. He checks his messages right away and contacts a driver that is available on call. The customer gets the pallets he needs.

"There's a wonderful opportunity in the pallet industry," said Ralph. "You get to deal with a wide array of customers, know their operations." There is a lot of satisfaction in "knowing your pallets are being used by major companies," he said, and it is good to know you helped them.

Ralph’s commitment to helping customers is very important to the business, said Paul. "Ralph does a great deal of customer service," he said. That includes "face-to-face" meetings and dock checks to assess and anticipate customer needs.

Ralph and Paul have lived in Lancaster since 1976. Paul said he enjoys being in the pallet business because of "the opportunity to be your own boss and control your own destiny, the opportunity to grow."

Prior to becoming a shareholder and part-time employee at United Pallet, Paul held management and executive positions at small companies. Like Ralph, he is keenly aware that customers want to ship products in the most economical way. "Helping them save money" on pallets is important, he said.

Above all, said Ralph, "We want customers to stay." He wants to sell a good product, one that does the job and keeps customers coming back. "Working with them to help them solve their problems" is important, he said.

Ralph will confer with clients, evaluating their pallets and assessing whether they are over-built and can be scaled back to reduce costs and still perform properly. He always ensures the pallets are built correctly to do the job. Honesty, said Ralph, is his highest priority in all dealings with customers.

Reaching out to customers is a philosophy that United Pallet shares with the company from which it bought its first important equipment, Smart Products. What he has appreciated most about Smart Products, said Paul, is the availability of its representatives. "One thing I found when I called," he said, is that someone is "right on the phone" and ready to help.

Paul and Ralph do not have much leisure time, but when time permits they like to go fishing. "We enjoy a little fishing," said Paul. "We hope to get in a day or two."

"The company is growing so rapidly," added Ralph.