Why Nelson Finds This Materials Handling Article Interesting

Each year Modern Materials Handling sends out a survey to all of its readers. Bob Trebilcock, executive editor of Modern Materials Handling, wrote an article based on the results.

So why do we at Nelson find this article interesting? Let's ask our team!

Which line of the article is the most interesting to you and why?

"A number of factors go into the decision to buy a certain type of pallet. And, while purchase price remains the most important factor, cited by 56%, it was down from 63% of readers the prior year. Cost per use was cited by nearly 40% of respondents, suggesting not only that cost is important, but that readers are getting more than one trip out of their pallets.”

The fact that more people are looking at cost per trip vs. cost of purchase indicates that more pallet users are approaching their decisions as better informed consumers. Hopefully, we are leaving behind the purchasing agent who only focuses on how much a pallet costs to buy instead of how much it costs to use, how much it can save if properly designed, and more significantly how much it saves if it reused. A better educated customer is a better customer.
David Caltrider, President

“The industry is really becoming more consultative and service based rather than product based.”

Why, because manufacturers and distributors are getting better and better at reducing distribution costs. Warehouse space, material handling equipment, transportation, safety, product damage, and packaging designs all influence the total cost of distribution. Companies that are progressing in their respective industries can no longer afford to look at these as standalone variables. Instead, companies must understand the relationships between all of the distribution system variables in order to optimize their system. In turn, vendors that sell into these markets must also understand these distribution system variables and take a much more consultative approach towards selling their individual products and services.
Rich Reiher, Vice President

"For instance, although 39% of readers say they have not experienced any issues in procuring used pallets, 27% report that the quality of used pallets has deteriorated; 27% say that fewer used pallets are available; and 15% say they have become more expensive. Of those readers who have experienced price increases, 48% have seen a spike of 5% to 9%, and 24% have seen a spike of from 10% to 14%."

I was surprised that 27% of readers say that the quality of used pallets has deteriorated. This may be because more inexperienced people are flipping loads of used pallets these days and don’t take the time to correctly sort and clean them, like we do at Nelson. I think that this shows the opportunity that we have to further put Nelson ahead of the pack in the used plastic pallet market. The quality of our used pallets, as well as our steady availability and pricing, are things we should continue to stress when talking to customers about used plastic pallets. More and more people are becoming aware of the option of a used plastic pallet and the high margins cannot be ignored.
Mike Simon, Midwestern Sales Executive 

"Cost per use was cited by nearly 40% of respondents, suggesting not only that cost is important, but that readers are getting more than one trip out of their pallets.
Other leading factors include: 53% strength, 50% durability, 43% customer requirements, 40% reusability, and 32% availability."

Though cost is still most important at 56%, the additional factors listed show that pallet users are looking for the ‘right’ pallet. Those respondents are the ones we want to work with by designing the correct pallet for the correct application at the right price.
Kent Longardner, Technical Sales Manager

"Those projections are supported by Modern readers: 34% indicate they used more plastic pallets during the last 12 months, compared to 27% who reported they were using more plastic pallets in last year’s survey; 33% expect to increase their usage of plastic pallets in the next 12 months."

The article was interesting because it gave a detailed breakdown of both wood and plastic growth projections. It also confirmed some of the reasons why the customers are choosing a plastic pallet instead of a wood pallet. Also, the statement about the industry becoming more service-based described Nelson’s core strength, spot on.
Mike Cunneen, Director of Sales and Marketing

"A number of factors go into the decision to buy a certain type of pallet. And, while purchase price remains the most important factor, cited by 56%, it was down from 63% of readers the prior year."

The part I find most interesting is that the percent of customers just looking at price has gone down from 63% to 56%. They still focus on price, but are giving other factors like straight performance, cost per use, and interactions with packaging more consideration. I’m encouraged that more customers are recognizing that the true cost of shipping a product goes beyond just the pallet price.
John Clarke, Technical Director

“The industry is really becoming more consultative and service based rather than product based.”

Whether the pallet is plastic, wood, or a corrugated type of packaging, we have learned to identify the customer’s requirements and offer an intelligent option that can safely transport their goods. Many buyers are now understanding that an improvement to the type of packaging they use may save more money by the time the product is delivered to the customer; rather than just focusing on the initial cost of stacking product onto a pallet. As a consultative salesperson, we have to be able to offer effective solutions to customers in addition to low cost products.
Jonathan Haynes, Sales Representative

To read Mr. Trebilcock's article yourself, just follow this link to "Reader Survey: Talking pallets with Modern's readers."

We want to hear from you. Do you agree with the readers of MMH? From wood to plastic, what do you believe is most important in pallets? Let us know by commenting below.

Post by: Kaitlin Manning, Creative Director