IsnÆt it good, Estonian wood
Leonard Gannet chops out niche business importing firewood from Europe.
By Chris Dupin
In the world of shipping, it's not unusual to hear about unusual commodity movements, but Leonard Gannet has an interesting tale to tell.
Gannet, president of the trucking firm Leonard Logistics and Gannet Warehousing Corp., was contacted in 2004 by a custom broker for a startup company, Essay Group, that began importing European white birch firewood from Estonia to be sold in supermarkets including A&P and Whole Foods.
|'It's been the most complicated logistics challenge of my career and the most successful.'|
Leonard Logistics and Gannet Warehousing
'Frankly, the whole concept of importing firewood seemed curious to me,' Gannet said. But he was sufficiently impressed with the firm, that within six months of doing business with Essay, he acquired half-interest in the company.
Firewood generally can't be shipped more than 200 to 300 miles inland before the logistics costs make it uncompetitive. Yet by using ocean transport, Essay can put a bundle of firewood pretty much anywhere from Miami to New York, and even Los Angeles at a competitive price, Gannet said.
Essay buys the trees from governments in Europe, which hold periodic auctions for the wood harvested on their land.
'The government does the harvesting in accordance with sustainable resources practices,' Gannet said. 'They'll harvest a certain size and then come back every 10 years and harvest the same size again.'
The wood is air-dried and then heat-treated in a kiln before shipment to prevent the possibility of introduction of any foreign insects or other invasive organisms.
'The ocean makes it possible to be competitive in almost any market in the country, unless you are right in the center of the country,' he said. 'It's going to be tough for us to get to Kansas, although we did price containers to Houston, and we can do Texas and Oklahoma and Louisiana and that central southern area quite competitively.
'One of our biggest markets is in the Chicago market ' Wisconsin, Minnesota, Missouri, Illinois and Michigan ' that whole area, we supply from New Jersey,' he said. 'New York has a lot of consumers and a lot of trucks bringing goods in. The freight rates out are very attractive ' which is another good reason to offer warehousing on the East Coast. We can go south, we can go west, very effectively. We can do Chicago for what it costs to do Suffolk County' on the eastern part of Long Island, he said.
The first year, Essay brought in 30 containers of firewood. This year the firm will bring in 450 containers from Latvia and Estonia as well as the company's newest supplier in Ukraine, which is starting up production in November.
In addition, Gannet said his brokerage division, GNP Logistics, handles 300 to 400 truckloads of domestic mixed hardwood from New England to major grocery chains. It hires two companies to do private label packaging of the wood and then deliver it to grocery chains in the Mid-Atlantic region.
Gannet's companies handle the equivalent of about 10,000 containers. Business was off about 10 percent to 15 percent last year, but has come back in 2010.
With the addition of about two-dozen grocery chains such as Albertson and Stop & Shop, and retailers such as Home Depot and BJ's Wholesale Club, Essay has become a substantial customer for Gannet's trucking and public warehouse business.
Gannet Warehousing operates two facilities in the New York-New Jersey area, a 120,000-square-foot warehouse facility for food grade products in Edison, N.J., and a 50,000-square-foot facility in Elizabeth, N.J., close to the docks, where industrial products such as chemicals and wire are stored. It also has a 40,000-square-foot warehouse in Waterbury, Conn.
Leonard Logistics operates a fleet of 35 tractors and 50 trailers with another 150 carriers under contract in the United States and Canada, and has a fleet of tri-axle chassis so that overweight containers filled with firewood can be trucked directly from the port to stores.
'By far, it's been the most complicated logistics challenge of my career and the most successful. I use all my experience to the maximum to pull this off. I feel like I've been on spring training for 30 years and now it's really paying off,' Gannet said.
For example, earlier this year, Gannet flew to the Baltics with loading instructions for 50 containers that were coming into the Port of New York, 20 that were going into Florida, and 15 that were going into Baltimore. Boxes were stuffed in Europe with multiple products so they could be discharged directly from the containers drayed directly from the port on multi-store chain routes directly from the port.
Essay sells its wood in different configurations. Some of the wood is split, some whole logs, some tied with decorative ribbons. It has extended its product line to include kindling, matches and natural charcoal for barbequing, and Yule logs. The company has added various decorative products such as wreaths, Christmas trees, even handcrafted brooms for Halloween.
Gannet has developed special techniques for packaging and transporting these products. For example, much of the firewood and other products shipped come in boxes that convert into point-of-purchase displays. And with the white birch, the company has developed special bracing within the pallets so that the bark is not rubbed and destroyed, since the attractive appearance of the birch is one of its selling points.
To prevent shifting of cargo as firewood is delivered to multiple stores out of a single container, Gannet developed a system using inflatable canvas bags.
'We put them on top of the pallets and we give each driver a 100-foot air hose. He pulls off his top four pallets, put the bag on top, inflates the bag, it puts pressure between the steel roof of the container and the pallet and it pins it to floor, so it can't move. When he gets to the next stop, he twists the valve, the air comes out, pull the bag out, they take the next four pallets off.'
Gannet also handles delivery of seasonal merchandise, such as bushes in the spring, pumpkins and cornstalks around Halloween, and Christmas trees for retailers, including 600 Home Depots. This business can involve coordinated movements of commodities arriving from seven different locations, then loading 10 or 12 truckloads each day with a variety of merchandise for six or eight stores on each truck.