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Utah Pallet Recycler Takes the Express Lane to Growth
Pallet Express: Utah family has built a strong pallet recycling business in less than eight years; company automates sorting, repair operations with new line from Pallet Repair Systems.
By Rick LeBlanc
Date Posted: 5/1/2001
SALT LAKE CITY, Utah — Pallet Express has grown in less than eight years from a new start-up to a dominant pallet recycler in its market region.
Like many pallet businesses, Pallet Express is a family-owned and operated enterprise. It is operated by four brothers. To top it off, they were joined by their father after he retired from the military.
Pallet Express does things that the best-run pallet companies tend to do. It has a strong customer service focus. It strives for stable, long-term customer relationships. It also strives for consistent pallet availability, rather than a ‘here today, gone tomorrow’ approach taken by some recyclers who heavily discount prices at some times of the year and have no stock at other times.
Pallet Express has a tight-knit, productive work force that it compensates well. As you might expect, this has helped minimize employee turnover. Another secret of the company’s success story has been in making the work easier — and the workers more productive — by investing in new automated equipment. The company’s most recent and ambitious project to date was the installation last year of a new Pallet Repair Systems (PRS) automated sorting and repair line.
Jeff Streadbeck founded Pallet Express in 1993 after having worked with his brother, Dave, in a landscaping business in Virginia. When he moved back to Utah, Jeff worked at another pallet company, along with his other brothers, Mike and Jon. Mike and Jon repaired pallets while Jeff drove a truck. This was the Streadbecks’ introduction to the pallet industry.
"We learned many good things in working for another pallet company," Mike recalled, "but we also learned many things we did not want to perpetuate in our company."
Subsequently, Jeff left to start his own pallet company. He was joined by Dave, who by this time had also returned from Virginia. They eventually brought Mike and Jon into the business. Their father, Larry, a civilian employee of the Air Force, was instrumental in working behind the scenes during the early years. "He kept us legal," Jeff said. "He made sure the taxes got paid and the computer worked." Larry joined his sons in the business after retiring from the Air Force in 1998.
The brothers range in age from the mid-to-late 20s through the mid-30s. Larry is now 57. The family has roots in Utah that go back generations — the Streadbecks’ ancestors arrived in the state with the Mormon migration. All of the Streadbecks are actively involved in the Mormon faith.
The brothers initially went their separate ways after high school. Jon and Mike furthered their educations at Weber State University in Utah.
When Jeff was a driver for another pallet company, it had tried repeatedly to get a certain major account without success. Jeff approached his boss and asked for permission to attempt to get them in, but he was discouraged from trying because his boss had been personally rebuffed at least twice. Jeff was successful in getting the contract for them and started working on-site with a small crew. Soon, however, problems arose between the customer and the pallet company’s home office, which constantly caught Jeff and his crew ‘in the middle.’ When it became apparent that the ties were going to be cut, the customer approached Jeff about working for them directly in the same capacity but as an employee. Jeff considered the offer but declined. Later he asked the customer about submitting his own bid and was encouraged to do so. He approached his boss about going out on his own, and his boss encouraged him until he learned that Jeff was considering submitting a bid for the company’s customer. He fired Jeff immediately and told him he would never make it on his own. The next day, the customer gave the pallet supplier one week’s notice that it was terminating its contract, and the company accepted Jeff’s bid and awarded a contract to him. Pallet Express was launched, offering pallet repair services to its first customer. Mike continued working for Jeff’s original employer, and Jon subsequently worked for the pallet supplier, but after a couple of years they both joined Jeff at Pallet Express.
The company started with a flatbed truck, and the brothers worked on-site for customers prior to leasing their first facility. Pallet Express later bought land and a building in Salt Lake City and added an adjoining parcel for a total of 3 acres.
Jeff holds the title of company president, Dave is vice-president, Mike is plant manager, Jon is in charge of transportation, and Larry looks after finance and technology. They are not particularly concerned about titles, though. In fact, when Pallet Enterprise visited the company’s facilities, the management team seemed quite fluid. The Streadbecks took turns being interviewed while responding to phone calls or directing the company’s activities.
Jeff handles sales for Pallet Express. About 10-12% of sales volume is handled through brokers; for the most part this involves servicing regional locations for national accounts handled by those brokers.
There is a core of family members and other personnel that has been key to the success of Pallet Express. Jeff had an extensive list of employees he wanted to single out for their contributions. Heath Paterakis, for example, is a remote site manager. Steve Low is the company’s maintenance guru who is responsible for everything from the grinding system to forklifts and trucks, computerized controls, bar coding system, optical sensors and hydraulics, and more. "Steve’s welding skills and diagnostic skills have been invaluable," Larry said.
"Dave has tried to keep ahead of needs as he upgrades the maintenance area and maintenance tools," Larry added. "We have recently added a new Migmaster 250 to upgrade our welding equipment and have expanded our ability to fabricate some needed items."
The longest serving employee is Dave Barton, who currently drives tractors and previously managed a remote site; he has pretty much done every job there is, according to Jeff. There are lead employees for the remote sites as well as grinder operations, wood recovery and pallet repairs.
The company’s strategy has been to stress long-term service to customers along with consistent supplies of pallets and stable prices. It has been the company’s experience that competitors often undercut prices at times when used pallets are abundant but are not able to supply customers when core supplies are tight. "For some customers, constantly hopping around to save a nickel on pallets is important, but far more customers want long term price and service stability," said Jeff.
Pallet Express has worked steadily to improve its facility after purchasing a building. "Improvement is a constant thing with us," said Dave. "There is always something that can be better if we just keep after it." Improvements have included hundreds of yards of concrete, a Challenger grinding system with an auger-fed truck loading building, and an eight-bay loading dock to accommodate semi-trailers. The building was expanded — doubled in size — to make way for the new automated repair line.
The business has grown steadily. It began providing on-site dock ‘sweep’ services for a major grocery retailer. The following year it added another location, and Pallet Express still holds these two contracts. The company recently won a contract to provide dock sweep services at a new major grocery distribution center.
The Streadbecks began thinking about automating pallet repair operations in 1997. They hoped that automated equipment would make it easier on workers and reduce turnover. "Whenever there are problems, you can lose good employees," said Jeff. "We wanted to extend the working life of our repairmen." Pallet Express had found that pallet repair workers generally only stayed 3-5 years. "Automation was a way for us to retain long-term employees," said Jeff.
The company evaluated systems from a number of vendors before deciding to choose PRS. Dave enjoyed a good relationship with PRS when Pallet Express was still quite small. "We knew we could count on them to work with us after the sale," David said.
The Streadbecks considered ideas from various sources as they researched options for pallet repairs. Pallet Enterprise, pallet industry events, and tours of other companies were helpful, Larry indicated. "We especially would like to thank Thomas Sorge and Alan Miceli of Pallets-R-Us in New York," he said. "Their kind hospitality and candor in discussing their growing pains were very much appreciated."
To expand its pallet repair operations, Pallet Express more than doubled the size of its building from 6,000 square feet to over 12,000 square feet. The PRS line is set up in the new addition. The installation began in July and was completed by October. The new system is credited with increasing production about 30%, according to Mike.
The PRS line is an example of how careful design can eliminate a lot of the handling in pallet recycling operations. Unsorted pallets are brought by forklift from the yard or trailers in the loading dock. Stacks of incoming pallets are placed onto powered Hytrol rollers, which position each stack onto a tipper. (After placing a stack onto the in-feed, the forklift drivers can wheel to the left and pick up a stack of repaired pallets to take on the return trip to the dock; this is a very productive layout that minimizes empty forklift travel.) The stacks are tipped and the pallets are fed to the sorting station operator.
The sorter has five choices. Pallets that can be turned around and immediately used again are routed to out-feed stackers, which are conveniently located in close proximity to the in-feed rollers. The other four sorting categories are damaged lead board, damaged interior board, missing slats ready to repair, or pallets to be dismantled.
Pallets that require removal of deckboards are conveyed to the PRS Pallet Doctor deckboard remover, which automates the process. The PRS Pallet Doctor uses a high-speed bandsaw blade to quickly and cleanly remove any deckboard from a pallet. A scrap conveyor automatically carries away boards that have been removed.
The idea behind having the PRS Pallet Doctor to remove damaged deckboards was to speed up the process and reduce the work load on repairmen. "Removing lumber takes a lot more time than replacing lumber," noted Mike. "We did time studies over several hours, looking at how long it took to remove lumber versus replacing lumber and stacking it up. We had time trials on all of those things." About 16% of incoming pallets are routed through the PRS Pallet Doctor for removing damaged deckboards, either interior boards or leading-edge boards.
Pallets with only damaged leading-edge boards are processed on an Industrial Resources End Clipper. The Industrial Resources End Clipper is a disc-type dismantling device. The discs are relatively maintenance-free, according to Steve.
Once damaged deckboards are removed on either the PRS Pallet Doctor or the Industrial Resources End Clipper, the pallets then are conveyed to the top level of a two-level conveyor that feeds the repair stations. The repairmen slide the pallets onto their work tables, replace the missing deckboards, and then slide them onto the lower conveyor for return to the stackers.
Unrepairable pallets are conveyed to the wood shop, which houses a bandsaw dismantler and a PRS Triad. The PRS Triad is a triple-head, disc-style pallet dismantler. It is a single operator machine designed to cleanly remove a complete pallet deck in six seconds. An optional deckboard sweep system quickly moves the recovered components to the sortation table for further processing. Stringers flow automatically out the back of the machine and are taken away by a transfer conveyor.
Dismantled material is stacked directly into bins or placed onto the turn-table, which eliminates the need for staff to pack recovered lumber any distance. The turn-table positions material in close proximity to the correct bin.
Recycled deckboards from both dismantlers are cut to size on a PRS Optimax Millennium single-end trim saw. The PRS Optimax Millennium is a chain-fed trim saw and can handle up to four different lengths without change-over.
The idea behind the design of both the repair-sort line and the wood recovery system was to eliminate as much as possible the redundancies in handling pallets or lumber.
A Challenger grinding system takes care of wood components that cannot be reused. Magnets remove the nails from the ground wood fiber, and Pallet Express recycles cardboard, too. The ground wood fiber is conveyed up to the auger-fed truck-loading building. It is sold as boiler fuel. The only thing that goes into the landfill is office and lunchroom garbage," Mike said proudly, pointing out the recycling logo that decorates the attractive Pallet Express trailers. The company currently is running 45 van trailers and 3 diesel tractors.
Pallet Express estimates that it processes about 42,000 pallets weekly, considering all locations. "We almost exclusively do 48x40 recycled," said Jeff. New lumber is used only when a regular customer requires a custom size. Pallet Express makes ‘combo’ pallets to fill these orders, using reclaimed components and supplementing with new cut stock as required.
The repair line has five work tables although there is room for eight. Pallet Express uses Stanley-Bostitch nailing tools. The repairmen apply bar code labels to finished pallets that identify the worker and the grade of the pallet. The lower conveyor moves finished pallets back toward the stackers. Before it reaches them, a bar code scanner ‘reads’ the label on each pallet, and the pallet is automatically directed to the appropriate stacker by grade.
Information captured by the bar code labels and scanner is uploaded automatically into the company’s computer system, providing Pallet Express with important data about production on the repair line and its inventory of finished pallets. The company uses the system for measuring productivity, inventory control, and recording attendance and time of the repair workers, Larry said.
Pallet Express turned to Jerry Swita of Bar code Labeling Systems in Salt Lake City, UT. He provided a packaged solution including labels, bar code reader, printer, label re-winder and computer software.
When Pallet Express was still planning the new automated line, some pallet companies with experience in automation advised firing the current employees and starting the new system with new hires. The idea was that new employees would be more receptive to the faster pace of the new line.
Pallet Express chose to stick with its existing work force. "We have been very successful (in rolling out the new repair line) with the old employees," Jeff reported. Open communication and trust between workers and management are integral to the Streadbecks’ approach to running their company, he said.
The commitment of Pallet Express to its employees is evident by the considerate approach it took during the start-up of the new system. "There was a lot of debate at first about what the best approach would be," recalled Jeff. "We tried to make the transition as smooth as possible." The company made a commitment to keep employee earnings at the existing level even if disruptions associated with the major ramp-up impacted piece rate income. To further complicate matters, since the equipment and system would make the repair work easier, productivity was expected to increase, and the repair incentives paid for each pallet would need to be reduced. Pallet Express assured the repair staff that compensation would remain steady during the transition while it determined the new piece rate.
Pallet Express has enjoyed relatively good worker retention. Many Pallet Express long-term employees are on piece work and make good wages. New hires start at $7.00 per hour, well above minimum wage. As it has grown, Pallet Express has added benefits, such as paid vacations, holidays, and sick days.
One key factor in the close ties between employees and management is that both Jon and Jeff are fluent in Spanish while Mike is improving also. There is a good two-way flow of communication. Jon and Jeff honed their Spanish speaking skills during two year stints of mission work — Jeff in Equador, Jon in southern California.
Pallet Express has about 40 employees at the main plant and on-site locations. The company normally operates one shift although it may run quite late during times of peak volume. The company has customers in both grocery products and industrial accounts.
The day Pallet Enterprise visited Pallet Express, three off-site workers from the distribution center arrived. Things were caught up, and they had reported to the office for re-assignment. Aside from sorting pallets, employees also sort and stack reusable plastic containers (RPCs) for return to pallet suppliers. The distribution center is still ramping up; so far it serves only about 30 stores, but this number is expected to double shortly.
PRS president Jeff Williams acknowledged that the use of bar codes enhances the effectiveness of the automated pallet repair system. "A great deal of the efficiencies gained by the system are realized with the bar coding," he said.
"When we design a system, we want to maximize the efficiency of the repair-sort processes and maintain quality control," he added. "The automatic transfer system takes effective management to do both. We had no reservations including it in the Pallet Express design. In my opinion, their constant communication with their employees improves every aspect of quality on the production floor."
"We have enjoyed working with the Streadbeck family. As an equipment vendor it is very gratifying to form a partnership with your customer that helps them flourish. Pallet Express is a perfect example of the American dream realized through hard work and honesty."
Situated in a rapidly developing region with key customers continuing to flourish, Pallet Express is looking forward to continued growth. With more capacity still available from its new PRS line and a skilled and seasoned work force, it is ready for the challenge.
(Editor’s Note: See photos on pages 86-87. For more information on Pallet Repair Systems, its services or products, contact the company at (217) 546-8864, fax (217) 546-8925, or Web site at www.pallet-repair.com.)