22 WESTERN PALLET
Adapting to Upside Down Markets
A perennial favorite among WPA speakers, Chaille Brindley of Industrial Reporting delivered the final presentation. His speech, titled "Upside Down, Rightside Up Markets," covered the wide array of changes within the U.S. pallet sector. From technological advancements to evolving market demands and the critical nature of labor costs, he offered an insightful view of the industry through his lens as publisher of Pallet Enterprise Magazine.
Brindley began by highlighting the unprecedented labor cost increases within the pallet industry, a trend uncovered through Industrial Reporting's most recent HR survey. "The basic labor rate in the pallet industry had gone up 30.89% since our last survey... That's the largest increase we've ever seen in the history of our survey," Brindley noted, emphasizing the significant impact this will have on the industry moving forward. He noted that for skilled jobs, the labor rate had risen even higher.
Brindley shared an outlook on current market struggles, suggesting a potential extension beyond early 2024 but maintaining optimism for the industry's long-term recovery. "There's a lot of factors that are going to take place," he reflected, acknowledging the uncertainty in predicting economic recoveries.
Brindley discussed the implications of warehouse automation trends on the pallet industry. Despite popular belief, he pointed out that "80% of warehouses still lack automation at this time," signaling a vast potential for growth in this area. While growth in areas such as mobile robots for order picking will not significantly impact pallet selection, other areas of automation, such as automated storage and retrieval systems and autonomous forklifts, will.
Brindley predicted a rapid increase in automation adoption, emphasizing its impact on pallet quality requirements. "As there's more automation going on in these warehouses, they are going to need higher quality pallets," he asserted.
Brindley also touched on the evolving landscape of pallet inspection technologies, noting that large distribution centers, rather than pallet companies, are leading the charge in adopting these systems. This trend indicates a growing focus on pallet quality assurance, driven by large and potentially smaller distribution centers. "I think you're going to see more focus on that," Brindley said.
He also touched on pallet company ERP systems and AI. Brindley stressed the importance of integrating ERPs at the operator level to enhance efficiency and data management across operations. Moreover, he debunked common misconceptions about AI, clarifying its role in strategic decision-making rather than physical manufacturing processes.
“One of the things that a lot of people have talked about is this buzzword AI,” he said. “Let me be completely honest with you, AI will never make a pallet for you. It's never going to recycle a pallet. It's never going to cut a board. That's not what it does. What AI does is it helps you particularly with office things that you need some strategic help with.”
He stressed that data management will be increasingly important and that pallet companies should be monitoring it. “If you don't have someone in your business who is responsible for data management and for your data strategy, you need to get that person," he said. "It may be a new hire, or maybe a salesperson or an operational person…I don't care how big or small you are, you need someone who's really focusing on data analytics, numbers, ERP, any and all of that. They need to be resourced enough so that they can do their job well, because I think in the market that's coming, that is going to be critical.”
Brindley's insights extended to legislative impacts, specifically mentioning California Bill AB 1760, which affects the management of proprietary pallets. He emphasized the need for fairness and respect among rental companies and recyclers alike and the critical role of recyclers in ensuring the return of proprietary pallets.
“I'm not taking sides on this,” he said. “I have written great things about PECO and CHEP and recyclers and all of it, I just want everyone to play fair and respect each other to be fair competitors. And at the end for recyclers to be paid what they're worth.”
Concluding his speech, Brindley offered advice for navigating the current economic downturn, emphasizing cash flow management, strategic investments in technology, and the importance of positioning for an eventual market upswing. "A downturn is a perfect time to position your company to be ready for the upswing," Brindley advised.
“If one or two pieces of machinery are going to position you for where you need to be in the future, what are you waiting for?” he said, noting that once the market starts to rebound, you might be a year out on machinery delivery, and as a result, you won’t be ready to prosper from the upturn. He encouraged attendees to look beyond immediate challenges and prepare for future opportunities.
Dr. Bellows and Gruenberg also offered more in-depth sessions on their topics during breakout groups. All in all, speakers provided useful and actionable insights to help attendees profitably navigate their companies into the future.
WPA Speakers
Cont'd from Page 21