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Priority Pallet Makes Quality and Performance Job Number One

By Chaille Brindley

Major California pallet company sets high standard for quality, environmental certification and fire safety. Unique for the West Coast, it cuts own logs on a Baker saw line.

Ray Gutierrez Sr.’s commitment to quality is evident as soon as you see his company’s property from the highway. Stacks of neatly organized pallets with everything in its place stands as a stark contrast to what you might find at many other facilities. This commitment to proper execution has allowed the company to attract major corporate clients, recognition as one of the few companies in the country with Sustainable Forestry Initiative (SFI) certification for its lumber, and a strong safety record that others hope to emulate.

Ray Sr. owns both Commercial Lumber & Pallet Co. (CL) and Priority Pallet (Priority), making his operations one of the largest pallet companies in the country. The Priority facility in Beaumont, California sits on 15 acres and looks more like a distribution center from the outside than a typical pallet plant. The facility services high volume customers. CLP and Priority are known more as pallet manufacturers, but they do a small amount of recycling for select customers. The Priority facility is one of the few places in California where a pallet company processes raw logs and turns them into pallet lumber. It installed a Baker saw line several years ago to process bug kill and other salvage logs.

Western pallet companies typically buy precut and random length softwoods from suppliers in Northern California, the Pacific Northwest, and western Canada. Priority secured a $1.3 million grant from the U.S. Forest Service partnering with the Riverside County Economic Development Agency to turn harvested infested timber and turn it into pallet stock. The goal was to have somewhere to take all the diseased timber in nearby forests. Prior to the Priority project, the federal government had been paying to have infested material removed and ground into wood fiber. In addition to material from the national forest, Priority Pallet has access to private land timber.

Ray Gutierrez Jr., vice president of Priority, explained that Clyde Reed of Baker Products had encouraged them to put in a system that could be flexible, and capable of processing logs or cants. And it has paid off well giving the company the flexibility it needs to respond to the market.

Ray Sr. laughed, “We had to learn how to be in the sawmill business.” When his company first started the sawmill there was a lot more downfall than they wanted. Part of it was due to the condition of the logs. But over time, the line has become quite efficient. Ray Sr. commented, “Baker makes good heavy duty equipment that has worked well regardless of what we throw at it. And there is minimal downtime due to maintenance.”

Another major differentiating factor for Priority is its focus on order and cleanliness. Kathleen Dietrich, vice president of Priority, said that Riverside County fire officials were so impressed with what Priority has done from a fire prevention and preparation stand point that they are considering using this facility as a model for others to follow.

Priority’s sister company was just the victim of an arson attack. And several strategies deployed at both sites was helpful in mitigating possible damage. Dietrich explained that surveillance footage showed a person walking down the side of the property with two cans of something and this was used to start the fire at the CLP facility. She declared, “This is not an accident, somebody is deliberately setting these fires.” (See the article on page 46 about pallet arson in California).

Dietrich outlines several steps that have helped improve the fire safety of their facilities. She pointed to the placement of fire hydrants throughout the facility making it easier for fire fighters to get water to the scene. Also, they stagger piles of pallet stacks with piles of lumber. Since lumber is harder to get going than pallets, this provides a fire break of sorts. Also, pallet stacks are kept away from the fence and are aligned with large aisleways to provide space that can slow the spread of a fire. The height of pallet stacks are limited to 20 feet high. The company also has lights placed in strategic areas to help eliminate dark areas where people can hide. And Priority employs guards to patrol the facility both during and after hours. Guards at the CLP facility were responsible for noticing the fire as it first began and calling for help almost immediately. This quick response time certainly kept the CLP fire from being a lot worse.

The company has an active fire management plan in place to check fire extinguishers annually. Also, the entire sawdust collection system is monitored and sprinkled. The moment the system detects any spark, an alert is sent. All of these precautions add costs to the bottom line.

Reducing clutter and good housekeeping practices go a long way to reducing fire loads. Ray Sr. added, “Anybody can do good housekeeping. It is a matter of your priorities.”

Lumber Processing

Priority’s sawmill is versatile to handle logs, cants or precut boards. The process starts with a Baker Super Streak Sawmill, operated by one person.

The Baker Blue Streak is Baker’s most common mill. In the Baker Super Streak, the sawyer controls every aspect of the mill from a control console using joy sticks and a few foot pedals while seated in a comfortable climate controlled booth.

This unique mill system has been designed for Priority Pallet to cut a log into flitches, not boards. The Baker mill cuts a log down into 3-1/2″ thick flitches, starting with a narrow flitch from the first cut and working toward wider flitches as you go further and deeper into each log and then ending with a narrow flitch on the final cut. These flitch sections travel on a roll case that feeds a circular gang edger with five 14″ diameter circular saw blades which has spacers set at 5-1/2″. Thus, the circular gang edger creates 3-1/2″x5-1/2″ cants.

The edging strips will travel via a belted pan waste conveyor to a vibrating conveyor feeding the West Salem Machinery 3232BH hog. Hogged edging strips and wood fiber residue is used for soil amendment products, sold to nurseries as bagged product for fertilizer, flower planting, etc.

Cants from the gang edger are cut into shorter lengths on a six-head Baker circular saw multi-head trim saw. Next a Baker six-head band resaw with 20 hp motors resaws each cant into the desired cut stock dimensions. A Baker M6 Deduster removes the remaining sawdust from the cut stock, which transfers onto a Baker off-stacking conveyor. Baker stacking racks and two-yard dumpsters are simple but important parts of the system to handle finished lumber and lumber scraps. Baker also designed the complete waste removal system for the entire system. It will handle end trim blocks and shim cuts or any materials determined to be waste.

Today, 80% of what Priority processes is raw logs compared to 20% random width material. The company buys mainly sugar pine and ponderosa pine. It does not cut any grade at the mill. Thus, some customers get some very nice, almost furniture grade material.

Dietrich commented, “We are not usually the cheapest, but we strive to offer the best service.”

Both CLP and Priority are certified by SFI, which makes it unique in the marketplace. SFI certification guarantees that lumber and logs are procured from companies that are following laws and harvesting timber in a sustainable manner.

Dietrich said, “SFI certification sets us apart. Our sales team has used this certification because major Fortune 500 companies want to work with companies who are green.”

Getting certified is no easy task. It requires a ton of paperwork to show where you source your material. Certification is good for five years, and annual audits are conducted to ensure compliance.

Dietrich explained some of the administrative effort involved. The companies maintain vendor certification numbers on file and tracks every lumber purchase. They both conduct internal audits. An accurate paper trail is required from an initial order of lumber through to receiving and payment.

The SFI process includes an assessment of any raw materials from outside of North America to avoid such issues as illegal logging operations. Dietrich volunteered that the record keeping required is not that easy initially but maintaining it is much easier to do.

The Right Building Serves as a Strong Foundation

The Beaumont facility was bought in 1999 from Square D, a manufacturer of electrical equipment. Ray Sr. recalled that it was the first time he had ever been interviewed by a seller to see if it would sell the property to him. He said that Square D wouldn’t sell the property to just anyone. The company had a strong commitment to the environment and wanted to make sure that the new owner shared these values.

Ray Sr. said, “We were the only company that Square D prequalified to bid on the property, and the company’s leadership was very helpful in our transitioning to this property.”

The buildings and layout had to be optimized for pallet production and a sawmill. Ray Sr. said, “In 1999, we didn’t know what we were going to do with so much land. Today, we have had to lease more to keep up with demand.”

Ray Sr. laughing recalled, “We never intended on having a sawmill or doing a lot of different things here that happened.” But he added that they always found a way to use every piece of land.

The CHEP service center work is conducted by hand at manual inspection and repair tables. Odd-sized and large pallets are produced by hand using pneumatic tools. Priority also uses automated nailing lines for higher volume orders. It has a Viking Turbo 505 and a GBN Excalibur nailing line. Priority bought the GBN for making block pallets for CHEP. Not it is primarily used to make one set pallet for a very large customer.

Ray Jr. said that they also really like the Viking Turbo 505 too. Its biggest advantage is a fast changeover between pallet designs. Ray Jr. added, “Both the Viking and GBN are reliable machines that have done well for us.”

Priority also produces heat treated pallets and is just about to install a Sii dry kiln that will doubles its capacity. The goal is to treat 2,400 pallets in three hours or less.

Good People Make the Difference

Ray Sr. who worked his way up the ladder to buy the company appreciates the dedication of his workforce. “My employees have everything that I have from health care coverage including dental to retirement and vacation time,” stated Ray Sr. Although the Priority facility is not a union shop, the workers there have all the same benefits as those at the CLP plant where it is unionized.

Ray Sr. said, “We have had 25 or so people retire from our combined companies through the years.” He believes in hiring good people and rewarding them for their efforts.

One of the most important things that Ray Sr. said he realized early in his management was that he couldn’t do everything. And he needed good people who were released to make smart decisions.

Pointing at Dietrich, he said she came to the company right out of high school. She is a partner at Priority and a key leader and manager at CLC. And she has also been an industry leader serving as the president of the Western Pallet Association twice. Dietrich laughingly said, “I was supposed to be a high school guidance counselor. I guess on some days, I kind of am. I fell in love with the industry at 19.”

“The only big difference between us and other pallet companies is our people. When you treat them right, people listen and pay attention,” declared Ray Sr.

January WPA Meeting Roundup

WPA Meeting Roundup

By Chaille Brindley

A large group of pallet and lumber industry members gathered in Palm Desert, California for the annual Western Pallet Association meeting. Literally, one of the hot topics at the meeting was the current problems in California with suspicious pallet fires. Arson is suspected to be the cause in many instances. Commercial Lumber & Pallet (CLP) was recently a victim, and Kathleen Dietrich, the WPA president, spoke about her experience at CLP. She said that the situation could have been much worse. But fire safety procedures and a rapid response from the fire department made all of the difference.

None of CLP’s buildings were damaged in the incident. One of the reasons is that CLP has started putting stacks of lumber between stacks of pallets. This forms a fire break of sorts because lumber takes longer to get going than pallets do. Also, the company has created significant spacing between pallet stacks and structures.

A security guard spotted the arsonist and quickly called fire authorities to respond. Lighting around the perimeter, security cameras and security guards are all steps that companies in California are taking after a rash of suspicious fires over the last few years.

Other problems facing pallet companies in California are recent incidents of fraudulent orders and thieves steeling trailers full of pallets. In a few cases, security guards were overpowered and tied up because the assailants had fire arms. Security has become a major consideration for many pallet companies in California.

Another issue being discussed at the meeting was the impact of rising softwood lumber
prices. The main driver is speculation over what will happen if duties are placed on Canadian lumber sometime later this year. Several panelists agreed that the market seems to be trending upward. Other lumber brokers said in private that the big gains may have already happened until anything new breaks with the softwood lumber dispute or increases in Asian purchases. The general thought is that prices are likely to go up depending on what happens with duties.

Canadian and some U.S. industry leaders have raised concerns with U.S. officials about how previous NAFTA exempted categories could disrupt markets that are not central to the softwood dispute. Now, everyone is in a waiting game to see what will happen. U.S. officials could decide to exclude pallet kits, stringers and other previously NAFTA exempted items. If companies have the ability to do so, they may want to consider building some extra inventory to be able to withstand whatever the outcome is on Canadian duties, which could range anywhere from 20-50%.

Patrick Atagi of the National Wooden Pallet & Container Association (NWPCA) spoke on efforts by the associations to fight corrugated pallet initiatives aimed at wooden pallets. Specifically, he pointed to success in beating a bill in Oregon aimed at giving preferential purchase authority to corrugated pallets for state procurement. The bill was sold to legislators as good for the environment, especially climate change mitigation.
You can see the latest video from Blue Ox Pallet at https://goo.gl/KetZRk.

Atagi’s primary goal was to encourage the industry to realize its power if everyone works together. He also highlighted some of the ways to use new materials from the Nature’s Packaging initiative. If you haven’t checked out the website, you need to do it and download the logos and messaging to use in your marketing. You can find more at www.naturespackaging.com.

Ashley Delgado, a lobbyist working with the NWPCA on behalf of pallet and lumber issues, spoke on the latest developments in Washington as the Trump administration prepares to take office. Her basic premise is that we should expect the unexpected with Trump. Some key positions have yet to be nominated, especially the Secretary of Agriculture who will oversee the Forest Service, the Animal Plant Health Inspection Service and other key forest related agencies.

Key areas that will impact the pallet and lumber industries are Obamacare repeal, tax reform, and regulatory roll backs. Daniel Mitchell, a senior fellow at the CATO Institute, covered the economics of minimum wage laws. He suggested that Trump is a wildcard on minimum wage even though his pick to head up the Department of Labor (Andrew Puzder) has been very solid on the issue. Trump has been all over the map on the issue from supporting a $10 per hour federal minimum wage, to no change at all to allowing the states to decide. As Mitchell commented, the states are driving the issue now. Look for continued pressure on the local level for higher wages even if the federal government does nothing.

I spoke at the convention on Moments of Change, looking at key decisions that made success possible for a number of pallet and lumber companies. The key take away is that labor challenges are continuing. You need to get good people and resource them. Smart companies also need to look at automation and machinery to reduce the labor burden. While building and moving plans are necessary in many cases, you need to expect that it will cost 10-25% more than at first expected.
And finally James Ruder of L&R Pallet and Ryan Sterns of Atlas Pallets in Nampa, Idaho shared on how they have used innovative human resources approaches to handle labor challenges. Ruder has turned to Burmese refugees to help solve his labor problem. And he has developed a whole new approach to managing his people. You can read more online at https://goo.gl/SytyaZ.
The WPA meeting continues to be a great place to network, share ideas and hear from top speakers. Due to its smaller size and the WPA’s reputation for friendliness, the WPA meeting is a desirable place to come during the winter if you want to meet other pallet people.

Congressional Fly-In Receives Rave Reviews

NWPCA’s Congressional Fly-In this June received an extrememly positive response from those who participated in Washington DC, including a number of WPA members.

“I really enjoyed the whole experience,” stated Kathleen Dietrich,Operations Manager of Commercial Lumber and Pallet Company and Current President of the Western Pallet Association.

“I believe the collaboration with NAM (National Association of Manufacturers) really gave us an opportunity, with appointments to meet with those legislators specific to our districts and states. It was all very informative and the lobbyists from NAM really were prepared. It made for such a fun and knowledge gaining experience. The evening at the Capitol Hill Club, where we actually met congressman and senators from different states, was such an intimate setting and you really got to literally ‘hand shake” with the legislators directly, and hear their viewpoints on those matters important to our industry.”

“It was a very eye opening experience to see a small glimpse into how Capitol Hill works,” added Caroline Beach Skinner, WPA Past-President. “NAM put together a great program and  they were very accommodating to our schedules. Meeting with different senators, representatives and their staff and listening to them speak about their viewpoints gave us great insight to the struggles that go on in Capitol Hill.” She added that it was great to participate in having the industry’s concerns being heard by lawmakers, and that she found a new found appreciation for what people like Patrick Atagi and others do on a day-to-day basis.

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WPA Director Jeff Carr of Northwest Hardwoods was also enthusiastic about his experience in Washington DC. “The Fly-In was excellent as well as surprising,” he said.

“NAM and NWPCA organized the event very well. I was surprised at how many congress persons that I had access to and how much time I had with them for my own company’s concerns. We will happily attend next year’s event if the opportunity presents itself, likely with a couple company representatives, if possible.

“The NWPCA Congressional Fly-In was a great success, and the impact of having our West Coast members participate and discuss issues important to the industry was significant,” stated Patrick Atagi, Vice President of NWPCA. “It shows that our industry has depth and that it spans the entire country.”

Atagi added that many positive measurable outcomes come from these meetings. For example, Jacqueline “Jackie” Garduno from The Pallet Center Inc. was able to meet with the office of Congresswoman Torres (California 35th) and secure a commitment for a Congressional Mill tour at The Pallet Center Inc. in Riverside, California.

Mill tours not only educate Members of Congress first-hand on the issues facing the wooden pallet industry and small businesses, but help companies show they are a positive part of the community providing jobs and contributing to the local economy.

All in all, the Fly-In received high praise as a successful event.

Part of Our Story

In 1962, Ray Gutierrez started his first year of work at Commercial Lumber Company and was hired as a yard worker pictured in the upper left corner. Now, he is our President-CEO. The collage of these pictures were all taken in 1962 and all of these employees transferred with us to City of Industry when the pallet company began in 1975.

We wanted to share these interesting pictures to display the rich history and hard work behind CLC Pallets.

Industry Thought Leaders Share Keys to a Trust-Centered Culture

Company executives like to say they have strong corporate cultures, but does that translate into higher performance? As it turns out, yes, but only if executives say what they mean, and mean what they say.

A study by researchers from MIT, Northwestern and University of Chicago found that a firm’s performance is stronger when top managers are perceived as trustworthy and ethical. Employee perception matters because it’s easy for companies to say they have strong values, but not necessarily to follow through.

“The [trust-centered] culture is also reinforced with daily safety checks and constant back-and-forth communication between employees and management.”

-Kathleen Dietrich
Vice President & Operations Manager
Commercial Lumber & Pallet Company

You can read the entire publication HERE.

Industry Thought Leaders

Share What’s on Their Mind, Whats on Their Desk.

The wooden packaging industry is a dynamic, evolving, and ever-changing network of businesses and business models. The only constant is change. Whenever NWPCA staff travels to visit members, they always return with interesting stories on how people originally got into the pallet business, what they do outside the pallet industry and, what they expect for business through end of 2016.

Ray Gutierrez, President/CEO, Commercial Lumber & Pallet

How are general business conditions? What do you expect through year-end?
Generally Speaking, I feel that this year will be very similar to last year, which would be great. Presently, I am anticipating upward pressure on pricing though, as lumber mills in the Pacific Northwest continue to struggle for logs.

How did you get started in the pallet business?
Commercial Lumber was established in 1941 and was heavily involved in heavy engineering and industrial grade lumber. When Governor Pat Brown came into office, he didn’t see the need for this type of infrastructure in the State of California at the time. Before things came to a significant halt, and much research was needed in the alternate industries involving wood, we decided to get involved in the pallet business. We completed that expansion in 1974, and changed our name to Commercial Lumber and Pallet Company.

What is on your desk right now? Operations? Expansion plans? Customer concerns? Opportunities?
Knudsen Cottage Cheese, Road and Track Magazine, sawmill lumber offerings and my current in-house Rail Car Report.

What do you do when you’re not at work? If you weren’t in the pallet business, what would you be doing?
I work from home. And if I wasn’t in the pallet business, I would be looking for a job!

You can read the entire publication HERE.

Commercial Lumber and Pallet Company backs responsible procurement

Commercial Lumber and Pallet Company backs responsible procurement with their recent 5 year renewal audit for SFI Certified Sourcing.

City of Industry, California

As part of its broad commitment to the corporate social responsibility, Commercial Lumber and Pallet Company announced today it will meet Sustainable Forestry Initiative© (SFI) lumber sourcing requirements across its City of Industry and Beaumont location.

The SFI certified sourcing label tells consumers at least two-thirds of Commercial Lumber and Pallet Company’s lumber comes from a company certified to the procurement requirements of the SFI 2015-2020 Standard, a third party certified forest and/or from pre- or post-consumer recycled sources. There is also a risk assessment of any raw material from outside of North America to avoid controversial sources such as illegal logging operations.

“We know our customers care about how forests are managed”, stated Ray Gutierrez, President-CEO of Commercial Lumber and Pallet Company. “SFI certified sourcing tells them our products are made with fiber from responsible sources—and our procurement practices are third party audited”. “With SFI certified sourcing, Commercial Lumber and Pallet Company, and our customers, can show we support improved forestry practices and strong communities across North America.”

Through its certified sourcing, the independent, non-profit SFI program stands apart from other certification programs by addressing the fact that 90 percent of the world’s forests are not certified. An SFI certified sourcing label tells consumers that lumber in a product is from legal and responsible sources, regardless of whether the forest is certified.

“By achieving SFI Fiber Sourcing requirements, Commercial Lumber and Pallet Company joins more than 245 companies that meet the mandatory practice requirements for the responsible procurement of all fiber sourced directly from the forest, whether the forest is certified or not. Among other requirements, SFI Fiber Sourcing includes measures to broaden biodiversity, use Best Management Practices to protect water quality, invest in forest-related research and conduct landowner outreach.” Kathy Abusow, President and CEO of SFI Inc.

Commercial Lumber and Pallet Company was established in 1941. They manufacture and recycle new and used wooden pallets. They have two locations, City of Industry and Beaumont California.

About SFI

SFI Inc. is an independent 501c (3) nonprofit charitable organization, and is solely responsible for maintaining, overseeing and improving the internationally recognized Sustainable Forestry Initiative. (SFI) Program. (www.sfiprogram.org). Across North America, more the 195 million acres are certified to the SFI forest management standard, making it the largest single forest standard in the world. SFI chain-of-custody certification tells buyers the percentage of lumber from certified forests, certified sourcing, and/or post-consumer recycled content. The SFI program’s unique lumber sourcing requirements promote responsible forest management on all suppliers’ lands. SFI Inc. is governed by a three chamber board of directors representing environmental, social and economic sectors equallty.

Environmental Benefits of Wood-Use for Pallets

Get the facts, share the facts with your customers on the environmental benefits of using wood:

  • According to the U.S. Forest Service, there were 119 percent more hardwood trees in 2007 than in 1953, with the growth-to-removal ratio of 2.00 (two new trees for every one removed). Want more good news? Each year 1.7 billion trees are planted in the United States – more than five trees for every man, woman and child in America – an average of 4.8 million seedlings each day. (From the U.S. Forest Service.)
  • U.S. industry harvests just 42% of the annual growth in hardwood timber that is biologically available to harvest. This is like using 42% of the interest/dividends you receive on your investments in any given year, without touching the principal. In fact, every year more trees die and rot in the woods than are removed by the industry.
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Welcome to Commercial Lumber and Pallet Company

Commercial Lumber & Pallet Company is a California-based pallet manufacturer that offers competitively priced new, refurbished and custom designed pallets, shipping crates and storage crates, industrial lumber, and pallet recycling. We are your one-source provider for pallets and crating. Established in 1941, we are one of the oldest and largest Lumber Mills and Pallet Manufacturers on the West Coast.

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