Materials Handling Keeps Valley Industry Moving
YOUNGSTOWN, Ohio — As goes American manufacturing, so goes the materials handling industry.
Materials handling is a broad sector of the economy that goes largely unnoticed and little remarked outside the industry. But it stands as the lynchpin that connects the very components that go into a final product and the commercial use of that product, say industry specialists. Everything from forklifts, pallets, cranes, storage, racking systems, lift and conveyance systems, and packaging operations make up this vast and vital link in the global supply chain.
“Material handling operations are often unseen to the public,” says William Petro, president of Century-Fournier Inc. in Boardman. “Few people realize that it’s a business all its own.”
Indeed, the distributors and manufacturers of materials handling equipment in the region enjoy a steady market in which demand has trended upward since the Great Recession.
According to the U.S. Bureau of the Census, new orders for domestically manufactured materials handling equipment grew 8.1% during 2014 compared to the previous year for a total market value of $37.4 billion. Shipments rose 4.5%, while demand was up 5.4%.
“I’m backed up with work,” Petro says. Century-Fournier supplies, but does not manufacture, a diversity of materials handling equipment such as loading dock equipment, racking systems, industrial storage and conveyance machinery.
Petro explains that the industry is much more than a mere supplier of equipment to manufacturers and distributors. “This is not a business that is just supply,” he says. “Each piece of equipment needs to be thought through, and get some sense of what does work and what doesn’t work.”
That requires planning and an understanding of how to best use a particular piece of materials handling equipment, Petro says. “You look at the problem, and conceptualize the best solution. Sometimes it’s the nature of the systems. Sometimes it’s equipment that solves the problems.”
Century-Fournier supplies manufacturers, warehouses, distribution centers, and institutional operations, such as hospitals, Petro says. “Business continuously improves, not exponentially, but steadily.”
The automotive industry is performing well across the country, and that’s had a direct effect on Century-Fournier’s sales, he says. “There are a lot of sub-suppliers to the industry that we have opportunities to do business with.”
The region’s automotive sector is driving companies such as Valley Industrial Trucks Inc., Boardman, to what could be a very strong year, says the president and owner of the company, Jim Hammond.
“With the [Chevrolet] Cruze going like gangbusters, it’s keeping everybody busy,” he says. The Cruze is manufactured at GM’s Lordstown complex.
Valley Industrial Trucks leases, rents and sells forklifts, personnel equipment, boom lifts and scissor lifts mostly to manufacturing operations in northeastern Ohio and western Pennsylvania. Valley Industrial also operates a service department. “Almost all of our business is tied to manufacturing,” Hammond says.
All of the company’s segments are performing well, he reports. “Business is probably up over 10% from 2014, and 2014 was one of our best years.”
A strong manufacturing economy regionally, plus the need for companies to replace their aging fleets of lift trucks, has helped business over the last several years, Hammond adds. “There were a number of years when the market was down and companies didn’t replace their fleets,” he says. “Now, they have to replace them.”
Hammond says the lift-truck industry is moving from internal combustion engines that run on diesel and liquid propane to electricity. “The trend is toward more electric power units,” he says. “It’s more evenly split than ever before.”
Valley Industrial recently received high honors from Clark as it won its Dealer of Excellence Award, one of just five in North America so recognized. “We’re really proud of that,” Hannond states. 2016 will mark the company’s 60th year in the Youngstown area.
Much of Valley Industrial Trucks’ business is lease and rental agreements, although its service department remains very busy. “We’re looking to hire technical people to support our service department,” he says. “We’re actively recruiting.”
A strong manufacturing sector – along with a better credit environment and a new business model – is similarly helping Direct Forklift Co. in New Middletown boost its sales, says Carl Stitzel, president.
“Last year, we opened a new wholesale division in Boardman,” Stitzel says. “We do parts, sales and rentals in New Middletown, and now wholesale in Boardman.”
Stitzel says his company’s wholesale division is opening an entirely new market for the company throughout the country, and in some cases, the world. “It’s opened up a lot of doors,” he says. “I’m working on a proposal for a paper mill in Kenya.”
The wholesale business has a relationship with several banks, and when equipment comes off lease, Direct Forklift brings the machinery in and remarkets the forklifts at wholesale prices to dealers across the country.
“Manufacturing looks promising,” Stizel says.
Five years ago, during the depths of the Great Recession, he says it was difficult for a manufacturer to secure the credit needed to lease or purchase a new fleet of forklifts. “Now, they’re the better accounts,” he says.
Moreover, Stitzel says, he’s heartened by what he sees is a trend among domestic manufactures who are bringing their manufacturing operations back to the United States from Mexico and Asia. “We’ve talked to a lot of big companies who are moving manufacturing facilities back to North America from overseas,” he says.
Still, others in the business have sensed the economy slowing down over the last several months. “Right now, the whole industry is kind of slow,” says Ron Sebest, vice president of Melmore Associates Inc. in Niles.
Melmor sells reconditioned steel containers, wire baskets, plastic skids, pallet racks, and conveyors and then resells them to clients – the majority of which are manufacturers all over the United States.
“Most of our customers are manufacturers – from small machine shops to Fortune 500 companies,” Sebest says. “A lot of times, we’re able to see a slowdown ahead of the economy to a degree. If manufacturing slows down, we slow down.”
Depending on the needs of the customer, Melmor could sell as many as a couple hundred pieces of equipment per client at a reduced price. “As things pick up, they do seek out additional containers and that brings in additional business,” Sebest says.
Melmor buys and sells used containers used by manufacturers and the business has thrived since 1963. “We don’t sell any gas-powered equipment, but rather more of the storage aspect of the industry. We’ve tried to save our customers money. From a cost percentage, we’ve been doing well for many years,” he says.
Another barometer of the supply chain and manufacturing activity in the country is the pallet industry, a vital piece of the materials handling business, says Gary Sharon, vice president at Litco International Inc., Vienna.
The most widely used pallets in today’s market are made of wood, Sharon says, and traditionally customers have sought these pallets because of cost. “For years, most buyers have used price as their main criteria when purchasing shipping pallets,” he says, “Unfortunately, the cheapest pallet is not often designed to properly carry their load.”
This can lead to damage of the product during shipment and could end up costing the pallet user more in the long run because of unhappy customers, Sharon notes.
Litco’s specialty is the Inca molded wood pallet, Sharon says. These pallets are manufactured with pre- and post-consumer wood fiber and formed in a mold at temperatures of 1,200 degrees Fahrenheit and under 1,200 tons of pressure. “The end result is a one-piece, nestable pallet which is capable of carrying high amounts of weight,” he says.
New technical designs have improved pallets over the last several years, Sharon says. Testing at Virginia Tech’s Center for Package and Unit Load Design, for example, demonstrated that Litco’s molded pallets are among the stiffest in the market.
Thus, pressed wood pallets have become more appealing to consumers mainly because of their strength.They don’t require certification for international shipments, and the high cost of lumber has driven up prices in the wooden pallet market, Sharon says.
“Our pallet sales are steadily improving,” he says. “Pallet buyers have started to take a serious look at alternative materials and are considering switching to our molded pallets. I expect that our growth over the next five years will come from increased market share from wooden pallet users that ship domestically and export, and small companies that are in need of storage space.”
Pictured: Century-Fournier President William Petro and salesman James DeCapua have seen sales climb since the end of the Great Recession.
Copyright 2022 The Business Journal, Youngstown, Ohio.