Insights from Promat 2007
By Rick LeBlanc
Date Posted: 1/22/2007
This year's ProMat 2007 show in Chicago included about 700 exhibitors showing off the latest and the greatest in the materials handling world. From a pallet perspective, the show typically provides a good read on what is going on with alternative material pallets and large players in the industry.
From a pallet management perspective, companies such as CHEP, IFCO Systems and iGPS were prominent as well as a number of alternative material pallet suppliers. Regional or local wooden pallet companies were not visible, nor seldom are at this kind of event. Below are my observations from the show floor.
If You Build It (RFID), Will They Come?
Maybe yes, maybe no. CHEP was showing off its new composite block design as well as a forklift attachment it calls the Blue Guardian.
The top of new CHEP composite blocks are recessed on the end and side to allow the use of a thicker stringer board without increasing the overall height of the pallet. The Blue Guardian is a forklift mast attachment that provides a rubber cushion against the center block to prevent fork tyne impact damage. It will be offered in some fashion to CHEP clients, and it seems like a good idea. There is a similar product from the Raymond fork lift people called the 'Pallet Dawg.'
Another leading edge CHEP offering is its Plus ID pallet, which comes equipped with 3-in-1 CHEP tags (including RFID chip, barcode as well as an actual identification number). While I didn't discuss this directly with CHEP, I heard from others who were familiar with the situation that to this point demand has been very modest, at least by CHEP standards. The majority of customers still haven’t seen fit to pay the up charge for RFID.
One leading industry journalist commented that generally the hoopla surrounding RFID had tapered off this year. "A lot of companies are finding the ROI just isn't there," he said. As a counterpoint, I went to an RFID presentation where the presenter rattled off cases where there had been a positive ROI. Bottom line, there are some mixed messages coming back from all sides.
The iGPS exhibit was another active display, featuring a video clip of CEO (and former CHEP CEO) Bob Moore explaining the value of its program. iGPS, which offers a 100% plastic pallet pool, is the newest player in the pallet rental game. The iGPS booth used a stack of some pretty rough looking wood pallet cores as a backdrop. Even though it always rubs me as blatant misrepresentation, the scrap wood pallet pile is one of those images that plastic pallet people used to trot out many years ago.
Until the iGPS booth, I hadn't seen the scrap pile tactic used in awhile. I have a mind to float out some pictures of broken expendable plastic pallets, but so much for splitting hairs. The iGPS pallet is a very nice looking unit, with a weight of 47 lbs. It features an injection molded plastic base and a twin sheet thermoform plastic top deck, welded together.
It has an RFID chip imbedded in each corner. I was told by iGPS that they currently have 11 or 12 customers, who they can't talk about due to confidentiality agreements, and have their production for the next two years already committed to customers.
During the show iGPS publicly announced that one customer, Mattori, an Arizona based melon and broccoli grower, would begin tests this winter. Its management team is stacked with some heavy hitters, including Moore, and Rex Lowe, also formerly of CHEP, as well as Ron Reed, formerly a packaging executive at Wal-Mart. There were a number of other ex-CHEP people at the show marketing pallets and related products for other companies.
Over at IFCO, there was an upbeat sales team and a flat screen that showed off their range of offerings.
Existing Solutions Find New Traction
Suppliers that have been long time show veterans are catching a breath of fresh air due to a stronger economy. Alternative material pallets were strongly represented, as they usually are at this type of event.
Clyde Witt of Material Handling Management commented to me that the contingent of plastic pallet vendors seemed as large as ever. While the usual group of quality manufacturers were present, such as Orbis, Rehrig Pacific and Trienda, there were the usual stream of newer entrants. There were some Asian entries with very good pricing, including plastic pallets rackable to 2,000 pounds for around $40.
There were some well known European producers, including Craemer, marketed by Granville Plastics, and Utz. Most plastic pallet companies seemed to be offering a lightweight expendable pallet in the $10 range for truckload quantities.
There was a lightweight steel pallet from the South of China, with pricing "between wood and plastic.” While I think that lightweight steel might make some inroads that type of sales line always drives me crazy. When I suggested to the sales person that this put the price in the "narrow" range between $4 and $120 that pretty much put a lid on our conversation. There were a number of metal pallet container suppliers with a surprisingly strong Asian contingency.
I don't think I've ever picked up as many business cards before with non-North American telephone numbers. The markets are getting more global all the time. Steel container people seemed bullish on their product lines. They say that steel has regained some of its shine for durability as resin costs have increased, and plastic pallet and container applications have been around enough years to make a realistic comparison.
Corrugated was well represented by at least four manufacturers. These suppliers showed a surprising range of pallets beyond the traditional shipping skid. Products included collapsible pallet containers, reusable pallets, insulated pallet containers, end of aisle displayers, and over-sized pallets.
One paper pallet manufacturer displayed a 13' long pallet used for vinyl siding. He says he sells 10,000 per month. Freight becomes a factor for paper pallets, so some paper pallet manufactures are partnering with companies in other parts of the country for component assembly closer to pallet users.
Other News
Other exhibitors familiar to wood pallet people would be the APA, which ran a booth, as well as the Center for Unit Load Design from Virginia Tech. The Center was represented by Ralph Rupert and Bonnie Maccubbin. Ralph, the new Director of the Center, said that the Center had garnered enough good leads on the first day of the show that they could have packed it in happily after the first day.
Beyond pallets, the ProMat show always provides a few eye openers. Two favorites this time around included a portable automatic wrapping machine that can be brought to the load, as well as automatic guided vehicles that stop and go around unexpected objects like people. Of course, there was plenty of robotics and other automated storage and material handling systems. Some of these may eventually find greater application within the pallet industry.
