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N.J. Recycler Seeks a Greener, Profitable Future: Tony Pallet Uses Trace Equipment to Pursue a Green Mission
Tony Pallet: The motto of this New Jersey pallet supplier is ‘Keeping it Green for the Next Generation’, and the company’s managers intend to steer the business into greener waters.
By Carolee Anita Boyles
Date Posted: 8/1/2008
Tony Pallet’s motto is “Keeping it Green for the Next Generation.” It’s a slogan they’re proud of, and a course they’re following. The company’s growth over the next few years should be very interesting as the officers of Tony Pallet deliberately steer the company into greener waters, including green energy.
Wood pallet recycling itself is a green business because it revolves around reusing and recycling a highly renewable raw material. While that may be enough for some companies, Tony Pallet’s commitment to recycling goes beyond just wood. “We also recycle nails,” said Peter Comune, the company’s general manger. “We make a conscious effort to recycle as many of our products as possible.”
Peter’s goal for the future is to pursue that motto, “Keeping it Green for the Next Generation.” That means doing little things as well as big things in an environmentally friendly manner.
“Last Christmas, we gave trees to our customers to plant,” he said. “We gave out the trees, with instructions for planting and received very positive responses from everyone.”
Backyard Business Becomes Major Recycler
Tony Pallet began as a simple family-run business in Newark, N.J., 30 years ago, originating in the back yard of the late Anthony (Tony) Russo.
“Anthony started the company out of his back yard,” said Peter, Anthony’s son-in-law. “He was a truck driver, and saw a lot of pallets in many locations; then a light bulb went off. He started picking them up and repairing them in his back yard and reselling them; he saw a need and he fulfilled it.”
Before long Anthony’s “backyard business” grew to the point that he was able to purchase land in Newark, N.J., eventually owning over four acres.
During the early years, Tony Pallet was located on Route 21 which is a major artery in Newark. That helped the company develop a “presence” in Newark, and made Tony Pallet very familiar to the businesses that would become its customers.
“Due to some redevelopment in the area about five years ago, we decided to relocate,” Peter said. The company moved about a mile away and has been able to maintain its reputation. “Because of our original location on Route 21 for approximately 22 years, Tony Pallet became a landmark in the area. Many people referred to Peter’s father-in-law as Tony Pallet instead of Tony Russo.
After Anthony passed away in 2004, his sister Vera Russo took over the business. Under her leadership, what began as a small family business now has become a well established business entity, with Vera and Peter the only two members of the original family still working there.
“Since Vera assumed the presidency, we’ve modeled ourselves like a big corporation,” Peter said. “We did a big marketing blitz in 2006 where we changed our logo, upgraded our Web site, increased our marketing budget, and added signage to our trailers with the new logo.”
Although there are several other pallet companies in the area, Peter said Tony Pallet has made a point of providing outstanding customer service.
“Our whole business is based on customer service,” he said. “We often obtain business from companies who are unsatisfied with the service of their current provider.”
Peter said Tony Pallet works hard at following through on everything they say they’re going to do, as well as having a personal touch that many businesses (in many industries) have stopped providing.
“We don’t have automated phones,” Peter said. “Someone always answers the phone during business hours. And we do have an automated answering service after hours so customers can always leave a message for us.”
“If someone needs an odd size pallet, they call us,” Peter said. “We have a reputation for our extensive inventory.”
Recovering from Disaster
Two years ago, disaster struck the company. In March of 2006, fire of unknown origin swept through Tony Pallet, destroying most of the company’s equipment and shutting down operations.
“The fire wiped out all our wood recovery operations,” Peter said. “We lost all our machinery, the structure, and even our electricity. It was really bad. The fire actually melted the steel I-beams in the building.”
“There was a three-week investigation, which affected some of our operations although the company was able to meet all of its customers’ needs,” Peter said. “We were forced to use new material to repair pallets for almost two weeks.”
“I started contacting our insurance companies right away, and stayed on that very diligently,” he said. “I also started trying to find equipment right away. One of the companies I talked to was Trace equipment, and I ended up getting a lot of our new equipment from them.”
Before long Tony Pallet was back in business as usual.
After the fire, Peter said, one reason he went with the Trace equipment was to get the most efficient operation in terms of money, labor and price, and Trace gave him that. In addition, the equipment has been almost entirely trouble free.
“We had one time that we needed a hydraulic part on the dismantler,” he said. “Mona at Trace sent the part overnight, and we were back up and working the next day.”
Tony’s Business Philosophy
According to Peter, the business that Tony Pallet does today is about three quarters pallet recycling and one quarter new pallets.
“One of the unique things we do is count every piece of wood—and by that I mean every pallet and every piece of lumber—that comes through the door,” he said. “From there, pallets are separated into good, repairable, and not repairable. But we go one step farther: we also separate them by size.”
Most of the pallets that come into Tony Pallet are coming from repeat customers, which include UPS, Toys R Us, Barnes & Noble and Liz Claiborne.
“Right now we have about 40 trailers dropped at our customers’ facilities,” Peter said. “We do get a few people who come in off the street who bring us pallets, but the majority of the pallets come from existing customers.”
Once the pallets are separated into categories, the repair process begins.
“We only repair what we need to repair,” Peter said. “That means, if we don’t have any 48x48s on order for the week, and we have 200 of them in inventory already, we don’t repair any that size.”
Wood to repair pallets comes from a couple different sources. Some pieces come from pallets that aren’t repairable; others come from pallet sizes that Tony Pallet can’t use.
On the new pallet side of the business, most pallets are custom sizes, and most of them are large. Pallets are designed to customer specifications using AMS’ PalDraw software. Tony Pallet purchases new lumber, either as 2x4x14-foot cants, or as precut pieces.
“Our main lumber supplier is Brown and Schramm Lumber Company in Pennsylvania,” Peter said. “We also buy from a few other companies, based on market price and on what’s available. Most everything comes in precut, but we do cut a few pieces from 2x4s, and we have a notcher and do some notching. But we don’t purchase raw material.”
For dismantling pallets that can’t be repaired, Tony Pallet has a Trace three-head dismantler and two Trim Trac trim saws. This whole part of the operation is automatic.
“When the pallet is put on the dismantler, it separates the runners from the boards,” Peter said. “The boards go on a conveyor, and from the conveyor they go onto one of the trim saws and are cut to size. The runners are sent to a revolving turntable and are stacked. Then the other trim saw is used just to cut boards when we need a particular length.”
Other equipment in the facility includes a chop saw from Trace equipment and two Hawk band saw dismantlers.
“We use the bandsaw dismantlers for larger size pallets and block style pallets,” Peter said.
Tony Pallet maintains a work force of about 50 employees. It takes great care to be sure its employees are very safety conscious.
“We brought in an OSHA consulting service in 2006, with a follow-up in 2007,” Peter said. “So we’re OSHA compliant.”
And unlike many other pallet operations, Tony Pallet leases some of its workers.
“We’ve been doing that since about 2004,” Peter said. “We only lease the yard workers and the truck drivers. We have final say on the hiring process, but the leasing company runs all the background checks, and makes sure everyone is legal to be in the country. When we saw all the immigration issues coming about we didn’t worry, because we already knew we had everything under control.” The leasing company also handles payroll and worker’s comp insurance.
“That makes everything easy for us because we can focus on business,” Peter said. “And it reduces the cost of our worker’s comp insurance, because the leasing company is pooling more employees together.”
Besides the two pallet operations, Tony Pallet also has a mulch operation that uses a Bandit Beast grinder.
“The wood for the mulch operation comes in part from pallets that can’t be repaired,” Peter said. “Plus, we do some wood recovery from our customers. We take in wood that’s not pallets, such as plywood, wooden boxes, and crates. I’ll take anything that’s just wood that we can run through the grinder.”
This isn’t the usual mulch operation that many pallet manufacturers have.
“We’ve teamed up with an area mulch company, R. J. Transport,” Peter said. “He brings me four empty walking trailers, and comes back and gets them when we’ve filled them. He takes the mulch to another company in Pennsylvania that dyes the mulch and sends it out to landscapers and garden centers.”
Beyond its grinding operation, Tony Pallet is active in the community by sponsoring an area softball team and helping non profit programs with scrap pallet removal.
Is Wood Energy the Future?
Tony Pallet also has been looking at getting involved with biofuels or another “green” industry.
“With the wood that we generate, we’ve been trying to get into that arena,” Peter said. “That’s where I’d like to see the company go in the next few years.”
Although the pallet operations can expand, and Peter expects them to do so, he really sees the “green” side of the industry as the area Tony Pallet needs to look at for future revenue growth.
“I definitely see us doing something with wood waste or biofuels in the near future,” he said. “We started looking at wood pellets about three years ago. I don’t know if that’s going to be our direction, or we’re going to be working with wood or sawdust. But that’s definitely in our future, and somewhere that we’re headed.”