Did you know that ancient merchants were just as focused on efficiently storing and handling materials and goods as we are today? Take amphorae, for example—large jars with two vertical handles and pointed bottoms that were used in ancient times to store and transport products like wine and olive oil. From the Phoenicians to the Greeks and Romans, these thick-walled shipping containers were designed to fit snugly in the holds of ships, stand upright or on their sides, be stacked in a staggered pattern, and have pointed bottoms that allowed the jars to remain upright even when buried in soft soil.
We have come a long way since the days of early civilizations, but the ability to efficiently store and transport materials remains vital. As labor shortages continue to plague lumber merchants, efficiency is more important than ever. Modern material handling equipment and storage systems allow lumber companies to store and transport more lumber with less labor while maintaining the same amount of storage space.
To help you make the best decisions about how to approach your material storage and handling needs, we tapped two industry experts—Clint Darnell, vice president of Sunbelt Rack/CT Darnell Construction, and Chris Krauter, president of Krauter Auto-Stak—to shed light on potential solutions you can implement today to ensure success tomorrow.
More product means more storage. Despite lingering recession fears over the past year, economic indicators now appear to bode well for LBM dealers. For example, at the time of writing, the U.S. inflation rate was 4.05%, up from 8.58% a year earlier. Additionally, home starts rose to a seasonally adjusted annual rate of 1.631 million units in May, the highest since April 2022 and the largest increase since January 1990, according to the Commerce Department.
These statistics bode well for LBM dealers, but they also pose challenges as they must store and handle ever-increasing volumes of material to meet demand. As a result, industry experts say it is more important than ever for dealers to invest in material handling and storage solutions.
“Quality lumber yards continue to operate well,” said Clint Darnell. “They plan for the long term and don’t let short-term economics dictate their decisions. They’re not that worried. They’ve had some good years, so a few bad quarters aren’t going to change their outlook. They’re still improving their lumber yard operations, and it’s going to pay off day after day. They’ll benefit from the efficiencies and cost savings that come from having the right building and racking systems that will help increase yard capacity, improve throughput, reduce material handling, make operations safer and provide a more comfortable experience for customers, and reduce rejects and labor costs — all of which will make the lumber yard more efficient.”
As Chris Kraut describes it, despite rising interest rates and continued recession forecasts, he expects the market to rebound this year, although he still sees the need for caution. “Whether this is a continuation of market momentum or a demonstration of continued market strength remains to be seen, but inflation appears to be stabilizing, which is a relief to everyone,” he said. “If interest rates can be reduced, demand will continue to grow. If rates cannot be reduced, we may see a return to the ‘normal’ cycle, where material handling demand slows in the summer months but picks up again in the late third and fourth quarters. In past years, demand has surged in June, July, August and September, despite summer lumber sales being the historic ‘peak season.’ We are cautiously optimistic that the outlook for the next 12 months will remain stable, but recognize the high probability of a slowdown.”
Work smarter, not harder. More than 50 million workers were laid off during the so-called “Great Layoff” last year. According to the National Association of Home Builders, the construction industry alone lost 1.5 million workers during that period, and only about 600,000 have returned since. Statistics like these make it more important than ever for LBM dealers to invest in intelligent material handling and storage systems.
“Labor shortages are a problem that can be solved by improving material handling methods and increasing storage density,” explains Krauter. “The ability to pick and deliver orders faster increases efficiency. High-density, easily accessible, semi-automated lumber storage systems reduce the time it takes to pick orders, allowing employees to complete more work orders in the same amount of time. Product availability eliminates wasted time digging for buried items in inefficient storage structures. In many cases, a higher-density lumber storage system can increase the number of stock keeping units (SKUs) in the same amount of space by 30 to 40 percent. In many cases, this increase in capacity can offset the need for additional warehouse space.”
Darnell also agrees with the importance of efficient storage systems as a key way to mitigate the impact of a reduced workforce. “Efficient design and modern racking systems will reduce labor costs,” he said. “Many of our customers have spoken about the increased efficiency they have seen through the use of racking systems and products like our wood stacking racks and our Power Bin system.”
He cites the Zuern Building Products and Design Center as an example. “They brought all the windows, doors, cabinetry and cabinets together in one climate-controlled center,” he said. “The cabinetry stacking racks helped Zuern organize the warehouse, save space by stacking cabinetry three high, and place orders for decking 50 percent faster.”
“We recently completed a new site for Griffin Lumber in Warner Robins, Georgia,” Darnell added. “Chris Baroni, the company’s branch manager, said that in a typical field, it might take two people three and a half hours to pull a standard 2,000-square-foot frame, but with the layout of this field, it would only take one person about an hour.”
New Approaches Increase Efficiency The leading approach to storage that can improve efficiency is called containerization—essentially storing related materials in modular, customizable boxes that allow items to be quickly picked and delivered by a single employee.
“Containerization of products has been a trend for the past few years and is gaining momentum,” explains Krauter. “Modular stacking racks reduce the need to handle special orders for windows, doors, trim packages, cabinets, hardware and other applications. Essentially, these racks act as a ‘container’ that allows orders to be transported in bulk using a forklift. When combined with flatbed trailers and tail loaders, these racks allow a single employee to deliver orders quickly and efficiently. We are seeing an increase in demand for custom stacking racks for a wider range of applications.”
Additionally, the very nature of the materials being stored requires new storage methods. As the number of products developed increases (and more are expected to hit the market in the future), experts emphasize the need to invest in storage systems designed to best meet product demand. As Darnell notes, “Some materials require shelving, such as engineered materials like laminate flooring. These need to be stored properly to maintain their quality/salability/aesthetics. More and more building materials are engineered (manufactured in factories rather than plants) and require specific handling/storage methods.”
“Similarly, the number of stock keeping units (SKUs) is increasing due to these specialty materials,” he continued. “In the past, builders would use wood and treat it to give it color/texture. Now, with the advent of products like laminate, patio owners have to stock a wider variety of different colors/shapes. They also have to sell a wider variety of products.”
As the use of structural materials increases, so do the dimensions of building products. Whether it is oversized windows, long span timber or multi-layer door systems, today’s building designs require LBM dealers to invest in larger storage and handling systems.
“We continue to see racking systems getting bigger and taller,” Kraut said. “The latest systems include semi-automated picking bays at ground and aisle level, as well as a full bulk mezzanine above. This design evolution, along with the growing use of custom frames for stacking doors, windows, cabinets, trim and moldings, is a clear trend.”
Invest today, earn tomorrow. Given the capital investment typically required for material handling and warehousing systems, making such a large purchase may seem like a daunting task from a cash flow perspective. However, industry experts advise not to focus on the cost, but rather to look at the long-term savings that increased efficiency can bring.
“There are many examples of lumber yards that have gone from being run-of-the-mill operations with product piled on the ground to organized, modern operations,” Darnell said. “Many owners don’t realize how efficient their lumber yard can be or think that improvements are too expensive. Almost every owner we’ve worked with has seen numerous improvements to a modern materials handling and storage yard. When carefully designed by an expert lumber yard designer, it should be an obvious investment that will provide a timely return on investment.”
Darnell noted that culling and labor costs have been reduced by reducing picking times, improving safety, streamlining workflows, and increasing warehouse capacity. “When you add up the costs of all of these benefits, you can see a return on investment for these improvements in just a few years.”
Krauter agrees, noting that improvements in material handling will significantly improve productivity and efficiency. As he puts it, “It pays off. If financing becomes an issue, we can provide loans to finance purchases, thereby minimizing capital expenditures and maintaining ongoing cash reserves.”
Just as ancient traders relied on amphorae, today’s LBM traders need systems that reliably simplify the storage and transportation of materials. It is no longer enough to assume that what worked in the past will work in the future. Successful LBM dealers carefully analyze current and future market conditions, then make the necessary investments to maximize profits. If the future matches the forecast, the benefits can be significant. As Darnell says, “There is a feeling that new housing construction will continue due to a housing shortage and pent-up demand for new housing. The problem is housing supply, not housing demand, and while interest rates have increased, they are still not that bad. With expensive land in some areas and long approval cycles, there is a shortage of affordable housing.” Experienced dealers will be well prepared to meet this demand.
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