Rack Industry embraces changes from pandemic

A year ago, the biggest challenges in material handling seemed so, well, easy: fuel and labor costs, logistics, downtime and productivity. And yet, a strange and surreal challenge started to appear in March, one that turned virtually every workspace upside down: COVID-19.

The ways in which the global pandemic has and will continue to affect material handling, warehousing and logistics continue to evolve, sometimes on a day-to-day basis for some companies. Logistical delays, from travel limitations, sourcing materials and parts, and in fulfilling orders, have caused shelves to sit empty, or had the opposite effect, requiring companies to seek out additional inventory of racks, shelving and other warehousing infrastructure. Yet, at the same time, things still have to remain as close to business as usual for companies to remain productive and profitable.

“The supply chain has been affected on both the international, as well as the local level,” says Terry Sroka, owner of West Point Rack in Omaha, Neb. “Shortages and availability issues have caused quite a strain on the ability to complete projects on time and within the budgetary restraints. Logistic issues require more detailed management to insure timely arrival of both raw materials as well as finished product to the customer.”

While initial data appears to confirm that the likelihood of COVID-19 transmission from typical warehouse surfaces is very low, the Centers for Disease Control maintains that COVID-19 can be transferred through contact with frequently touched surfaces and equipment followed by touching your face, nose, mouth or eyes. The greater risk, however, is in being in close contact with others – customers, coworkers, contractors, and truck drivers – who can then spread the virus through respiratory droplets.

“COVID-19 has not affected our equipment design or how are racking is utilized,” says Sroka. ”It has had a great impact, however, on the health and safety measures that have been increased to provide the proper protection for employees working in factory and warehouse environments. Personal protective equipment (PPE) masks, gloves, face shields, and sanitation stations, as well as social distancing measures, have all impacted how work is performed.”

The combination of these two factors hasn’t stopped companies from doing business, but rather forced changes to how business is being conducted, says Shawn MacDonald, president/CEO of Mac Rak in Lockport, Ill.

“COVID-19 has not changed what my customers are looking for,” he says. “It has just caused a tremendous challenge for my company and the customers that we service.”

Challenge has equaled new opportunities for MacDonald, who says his business has grown about 20 percent this past year, though he is unsure if that is due to COVID-19 or just a continued growth pattern for the company, which specializes in engineered pallet rack repair and protective guarding solutions.

But MacDonald’s company has directly faced the unexpected challenges that all companies have nationally and globally.

“COVID-19 has been a challenge in our manufacturing facility with 40-plus employees,” he admits. “We dedicated ourselves very early on to following the CDC guidelines and spend quite a bit of time each day sanitizing the facility along with mandatory facility entry temperature checks and common health question screening.”

The efforts paid off: Mac Rak had only one employee quarantined for the first eight months of the pandemic, before seeing an uptick in November.

“The challenge with our business has been overcoming the restrictions placed on us by virtually every customer we have,” he said. “We were restricted and refused entry to most facilities for about four months.”

MacDonald says that a critical part of his business is performing storage rack surveys, which provide his employees with critical information needed to recommend properly engineered repair solutions to aid in facility safety and employee safety for customers.

“Our loyal customers, and many new customers, were eventually forced to relax some of the restrictions on their facilities provided we complied with their Personal Protective Equipment (PPE) mandates, because facility safety is critical to keeping the nation’s supply chain moving.”

MacDonald says he’s encountered similar situations. As the industry is unique, it’s difficult for providers of warehouse equipment to work from a home office when serving clients. They need to be in the facilities.

“The obvious concern that was impacting all of our clients was the fact that they could not compromise safety while continuing to operate their critical industry facilities,” he says. “It became a classic story of the chicken and the egg: Do we continue to operate a critical industry facility and compromise life safety because of the COVID-19 virus or do we take the same safety precautions with our outside vendors and grant them access to keep our facility and personnel safe?”

He says this decision literally took months for many companies to realize the obvious answer. “People gained some amount of acceptance that this was now going to become the status quo for a very long time,” he says. “Everyone eventually came to the same conclusion that safety needed to be the highest priority whether it was COVID-19 or personnel life safety; neither should or could ever be compromised.”

Current and Future Changes

One thing that the COVID-19 pandemic has done is change how companies think about their warehousing facilities, says Joe Rooney, vice president of Texas-based Baker Industrial Supply. By having to maintain distance between employees and contact time, companies are taking a new look at warehouse density. While that change has not structurally changed product demand, it has changed how companies are likely to think about how warehousing products are utilized.

“While on the surface, Baker Industrial Supply has not seen any changes in the equipment itself from the majority of its customers, the reality is that COVID-19 has forced many companies to rethink density and how to maximize the storage space they have,” says Rooney. “We believe that by rethinking how to increase density, the opportunity for investing in innovation will give a better ROI in the long run.”

That may ultimately be a silver lining in how companies have evolved in their response to COVID-19.

“While the initial reaction was a matter of priority, we believe it will end up being the catalyst to rethinking the supply chain,” he says. “Company mindsets went from ‘how can we do this cheaper?’ to ‘how can we maximize expenses as we plan our next warehouse?’”

While one of the obvious effects the pandemic has had is on business travel, it’s also hampered warehouse expansion and renovation plans.

“All those things that would normally be done – scouting new facilities and property, for example, plans for many new distribution centers have had to be put on hold until the restrictions lighten up,” he says. “Work travel is at historic lows due to COVID-19.”

He adds that the shift in mindset is clear: COVID-19 is making companies re-think their warehousing needs.

“There is a shift in mindset about those wanting to invest more long-term by investing in automation solutions, more advanced technology, etc. in order to maximize existing space as well as better imaging new facilities as they are built,” he says. “We believe COVID-19 has been a driver in this evolution from stop-gap solutions to a more long-term investment for increased ROI.”

While COVID-19 is likely to impact workplaces for the foreseeable future, Rooney is optimistic that business will still get done, and likely expand in 2021.

“We want to have our customers ask us to help them rethink future expansion,” he says. “Whenever more products need to be shipped, like with the explosion of ecommerce in 2020, that will instantly create potential problems for retailers as well as 3PL services,” he says. “We can help them become more efficient by changing how they imagine things moving forward.”

Laurie Arendt is an award-winning business writer based in Wisconsin. Her writing regularly appears in national trade publications in a variety of industries. To contact Laurie email editorial@MHNetwork.com.

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