- By falm
- February 18, 2020
- Buying Pallets
First Alliance Logistics Management is an early entry to the national accounts game and is looking to grow its supplier network thanks to enhanced digital marketing and outreach.
First Alliance Logistics Management is a pioneer in the development of centralized service for regional and national accounts. More than 25 years ago, a group of 20 pallet companies saw the need for an organization to create an extensive network and supply customers wanting service on a large scale. The original founders were Girard Wood Products, Litco International, Interstate Pallet, Potomac Supply and Remmey – The Pallet Company. This year First Alliance celebrates its 25th anniversary as the organization seeks to further develop its supplier network and enhance its digital marketing efforts.
The organization began in 1995 in Naperville, Illinois, and later moved to Charlotte, North Carolina the following year. The number of investor partners has dwindled somewhat to 12 companies, but they include some of the leading pallet suppliers in the United States. Some of the original members left FALM to sell or dissolve their former businesses. You can see the list on page 27. The partners have combined sales in the range of $250-$300 million and produce-30-35 million pallets annually, according to Glenn Merritt, a managing partner since 1996 and CEO and President since 2002. First Alliance boasts six former chairmen of the NWPCA, the world’s largest trade association of wooden pallet and packaging professionals.
While about 60% of First Alliance revenue comes from sales of new or recycled pallets, the other 40% is derived from products or services related to pallet management. The company has focused on the Eastern United States but has a good presence throughout the continental US.
The original partners “had the vision to foresee the expanded use of recycled pallets,” observed Merritt. Most of the original partners were new pallet manufacturers, he added – and still are. “They took the concepts of buying and selling pallets from local areas to a national basis.”
The mission of the business has remained unchanged; it is to form a network of pallet suppliers that represents them across the country and brings its supply chain sales leads. In addition to 11 investor pallet companies, First Alliance can tap a network of 225 pallet suppliers throughout the country. FALM is encouraging pallet manufacturers to join its supplier team if there is ample interest in growing sales together.
First Alliance was a response, in part, to the fairly new presence of CHEP in the U.S. pallet industry. “At the time, CHEP was getting bigger and stronger and converting a lot of new pallet business to rental,” recalled Merritt.
“All good businesses are somewhat evolutionary and will change with the times,” commented Merritt. “Since we have been around for two and a half decades, we have obviously done some things right and have made shifts to respond to the market.”
Merritt added, “We have never been afraid to try our hand at new start-ups, and we were always able to know when to move on to greener pastures. I expect this trend to continue going forward as FALM diversifies its interests.”
First Alliance has changed in some ways over the course of 25 years. For example, initially it focused on retrieval and recycling of odd-size pallets, such as larger pallets for building materials. Odd-size pallets are still in the company’s portfolio, but the company also has seized business opportunities related to the 48×40 GMA pallet footprint and similar footprints.
First Alliance is in the process of developing and launching a preferred supplier program. One of the benefits to a pallet supplier who joins the program is the company gets sales leads provided by First Alliance.
“The interest is about the leads,” said Merritt. “Hopefully, as trust and relationships grow, we will have better inventory available during seasonal times of the year. We’re able to forecast better, and our preferred suppliers can build in inventories.”
In the past two or three years First Alliance has invested hundreds of thousands of dollars to further develop, refine and optimize its website and digital marketing efforts in order to attract qualified sales leads. The company also does email marketing campaigns and is adding more sales personnel.
“The people who win…are the ones who have the highest hit rate off these leads and convert these leads into business,” said Merritt.
First Alliance also can help its preferred suppliers save money on freight. Its affiliated logistics company, C2C, acts as a freight agent – not a broker – to help provide reliable trucking at a savings. For example, if a supplier is buying lumber from 100-1,000 miles away, “we’ll run the rates,” said Merritt, “and see if we can help them drive the cost down. In some instances, we’re in a position to save them some money.”
First Alliance also is in a position to help its preferred suppliers to sell surplus pallets or material. A pallet supplier may have a surplus of odd-size pallets or lumber that already has been cut. “Nobody knows that it’s sitting there,” said Merritt. “We can help them distribute surplus inventories.”
Another benefit for preferred suppliers: First Alliance pays faster than a typical customer would do when purchasing pallets through a broker, according to Merritt. Most customers pay in 45-60 days, he noted; First Alliance pays in 30 days. “We pay faster than dealing directly with a customer.”
First Alliance has “never stolen anyone’s business,” said Merritt, who wanted to emphasize the company’s integrity and ethics. The partners are “very honest, ethical people,” and our staff operates the business the same way.
Merritt anticipates growing the segment of business that deals with odd-size pallets that generate more wood waste for national companies than the revenue they receive for 48×40 cores. “They shouldn’t have to throw those pallets away…We see that as a growing part of our business.” Solutions include supplying those odd-size pallets to recyclers who can dismantle them and cut the used lumber to size for stock for standard-size pallets or utilize the wood fiber for other wood-based products. FALM welcomes new suppliers who need wooden pallet cut down material.
Large regional or national pallet-using companies have shown an increasing interest in pallet management – and not just pallet brokerage – in the past five years or so, observed Merritt. Pallet management services can include recovering and repairing pallets for a shipper, or it could be a retailer that is looking to buy pallets or sell its surplus pallets. Retailers also may be looking to dispose of other packaging-related commodity materials, such as baled shrink wrap or cardboard, scrap metal, or others.
The partners actually considered establishing their own pallet pool system in the initial years. “The problem was the cost to be able to develop a pool like that…was incredibly large,” noted Merritt. “It was decided we would just go a different route. FALM has blazed a number of trails over its initial 25 years in order to build a business model that works.”
Merritt concluded, “Our partners have been critical to our success. Their guidance, ongoing support, and strategic vision as well as execution by FALM’s senior management team has made us a company to be reckoned with as we begin the new decade.
To find out more information on First Alliance, visit its website at www.falm.com or call 888-995-6579.