Justin sits with Steve Graham of Catalina Material Handling to discuss material handling and the Very Narrow Aisle System. Catalina Material Handling is a company that specializes in providing racking, storage, and material handling equipment for a variety of industries. In this episode, they also tackle numerous supply chain issues on material handling, especially on the lead time of manufacturing the materials. According to Steve, he handled clients whose products are frequently out of stock and needed weeks to be replenished.
Tune in to see how the VNA warehousing system poses a lot of advantages when it comes to material handling.
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Highlights
- Building lasting relationships with customers
- Various clients, projects, and commodity classification
- Retro-fitted buildings
- Projects for clients with ongoing renovations or having a property for a specific tenant
- Different types of building layouts as reference points for the next client
- Supply chain issues
- Material specification process
- Benefit of Very Narrow Aisle System
- The rise of e-commerce and its effect on warehousing and material handling
- Outgrowing the building before finishing the lease
- You cannot suppress progress: striving to be the best partner to every client
Episode Resources
Connect with Justin Smith
- https://smithcre.com/
- https://www.lee-associates.com/
- jbsmith@leeirvine.com
- https://www.linkedin.com/in/justinbsmith
Connect with Steve Graham
Justin Smith: Hey Steve.
Steve Graham How are you today, Justin?
Justin Smith: I am doing all right. How about you?
Steve Graham: Doing just fine.
Justin Smith: Well, thank you for joining. I appreciate it. Steve Graham, Catalina Material Handling is on with me today. And I want to thank you for being here first and foremost, you and I just had an awesome coffee at Starbucks and kind of talk to so much shop that I felt like I can’t believe I couldn’t capture any of this and share it with people because it’s not just me, that it’s helpful for. So that’s what really spurred the idea. We got to capture some of this lightning in a bottle and sharing with the world because everybody, I know we’re all in the same space, dealing with a lot of struggles and trying to make the most of these challenges. And I figure you’ve been helping a lot of people do that. It’d be great to just spend a minute and kind of go over the lay of the land.
Steve Graham: Yeah, absolutely. I enjoyed that conversation we had, I think it was a week and a half or so ago. I think that we crossed paths in so many different ways with the clients that we’re working with. So yeah, I’m looking forward to it. I’ll try to be an asset and a pillar of information on any of the topics that you want to get into today.
Justin Smith: So are you running around, like your hairs on fire?
Steve Graham: Absolutely, last year was a big year for our company, being in the racking space. That’s primarily what we do, but a lot of our engagements with our customers or new customers, it extends even beyond that. But I think what happened in our company and our business was echoed throughout so many other businesses kind of coming out of a 2020. We were planning last year to be sort of our 2020. And it was like in golf terms, it was a little bit of a mole again. But it was a really good year for us and very busy. Actually this year we’re staffing up and have plans to sort of have a repeat year. So yeah, it was a very good year for us.
Justin Smith: Yeah, and to see this new shortage of people out there that are expanding and trying to take space. It’s the Dogpile.
Steve Graham: We’re kind of getting hit from, I would say all angles. I mean, you know, we worked very hard in our business to get a customer in the first place and then retain a customer. And again, I know in your business, it’s also like that and a number of businesses, it’s very difficult to hold on to customers and you really have to always be providing the services that they want. Not every job that we get is, you know, some big multimillion dollar job. But when you have a customer who needs your help, even on something small or in this case, expansion is rapid. So a lot of our customers are doing, projects in Southern California, but also outside of California, all over the U.S. So we do projects all over the U.S. So we have a fairly good mix of existing customer business and then also new clients as well.
Justin Smith: What would you say is like a bread and butter type of assignment you’ll work on with somebody?
Steve Graham: I would say a lot of the projects that, that we’ve seen from our existing customers are simply they’re just opening a new facility. We love to get started early whenever possible. Now some of our clients are very high level, very experienced clients in building assessment in space planning and workflow and things like that. But other ones, you know, they have a real estate department and they’re simply of a requisition for X number of square footage or whatever. What we like to do in those early stages as if we know they’re targeting one or two or three particular properties, we’ll go ahead and do sort of an assessment on each one of those and we’ll look at it from the commodity that they might be storing in there because a lot of our clients are 3PLs. So what they’re doing in Southern California is not necessarily what they’re going to be doing in Texas or Georgia or some other state.
Justin Smith: For that layman commodity classification is what’s in the pallets and what is the product? What’s it made of and how flammable are the materials?
Steve Graham: Exactly. Yeah, I should have clarified. So every, everything that is stored in a warehouse rolls up in the fire code under what’s called a commodity class and that’s labeled one through four and then there’s a hazardous material. Certain items are not covered in those, and they’re covered in other sections of the fire code, but that’s primarily what we’re looking at. And then we’re kind of comparing that to what the fire suppression system is in the building for them. We’re also putting in a racking plan to see how many pallets they might be able to store and we’re doing some space planning for them. So, you know, a lot of the buildings, the newer class A’s are obviously the big rectangular boxes and they’re going to be fairly consistent. But if it’s a couple of buildings that are maybe different shapes or one’s older or newer or something like that. We have one project in particular where client almost signed on the dotted line. It was a huge building. I think it was over 200,000 square feet and it had a five-inch slab. It was a 3PL and they were storing heavy duty plumbing fittings, pipes and things like that. So, the weight was definitely a factor. It didn’t really hit the fire code and it wasn’t an issue with the fire sprinkler, but the slab five inch was just not going to work. And so that was one of the things that we helped flag for them in those early stages.
Justin Smith: You see what happens when people lease the wrong building. They come to you, and they say, hey, we’ve got to figure out how we’re going to rack this thing and then you all of a sudden deal with the sprinklers don’t work, the slab doesn’t work and what are we going to do about it? I imagine you’ve got all sorts of not horror stories, but times where if only, you had been in earlier, how much more of a positive impact you could have had.
Steve Graham: Yeah, absolutely. We do run into those more than several times a year. A lot of times the goal was to just simply get a bigger building to get more square footage or in some cases, same size, but they wanted to go taller and there was just like no regard given whatsoever. To the sprinkler system in the building, that’s usually the driving factor. We’re seeing that a lot with older properties, that were obviously designed for manufacturing, going back 30, 40 and 50 years. And because of the switch into the warehousing business somebody who’s not quite as savvy with those requirements for permitting and product storage. And it gets into a little bit more detail in terms of the design of the storage and things like that. But in a lot of cases, we sort of can untangle that and we can through our fire consultants, which are really fantastic. They’ve just been on a lot of projects in some of the California’s premier fire and we also do a lot of work with Triad. They really do help us with the design and recommendations and things that will meet the code and meet permitting even when clients do sort of get into a bit of a jam, as you mentioned.
Steve Graham: Yeah, the solid class B buildings from the fifties, sixties, seventies, eighties that has some dock and it’s now being turned into distribution, right. There’s got to be people just running into that all over town. I know I’ve run into that and after you have one, you sure don’t forget about looking out for that and being mindful of it and really delving into that when you are underwriting and exploring new opportunities. We’ve seen a number of buildings that have been retrofitted or renovated over the years where they just had really basic sprinkler systems in place and it happened to have a real high, a clear height as well. Again, an unsavvy client might walk in there and say, oh, this is going to be perfect and then they find out they can’t really store their product greater than 5 feet or 12 feet or something like that, unless they’re upgrading the sprinkler system. And at some of those buildings where they’ve had demising walls put up and things like that, where the same system is feeding the entire building and the risers down at the other end, it’s a real big can of worms. It’d be a whole series of meetings to try to come up with a solution.
Justin Smith: You need to have a landlord upgrade the whole building, like as part of like a new acquisition or when the whole building clears out, if there ever is that moment in time.
Steve Graham: Correct. Yeah, and we’ve been involved in projects like that as well where maybe the building was already in the process of getting renovated or something like that. Or we’ve worked directly with building owners, who were in the process of acquiring a property or considering acquiring a property with the purpose of marketing it to a very specific tenant or a very specific business that might want to handle that business. For example, can be converting a large warehouse with only few dock doors to maybe a cross dock type of a building or something like that. And so we’ve provided a lot of guidance in terms of like, if you’re going to design and renovate the building specific to that type of a customer. This is how they would want to use the racking and the storage in there. And we can kind of bring examples from other projects that we’ve worked on that would back that up as well. So that way we can provide a pretty good service and assistance to the building owners, in their endeavors to upgrade those properties. And then, potentially if they latch onto the clients then that’s where, you know, we’d like to get involved with the racking and we can assist with the permitting as well.
Justin Smith: We need more cross dock, Steve. I’m doing work in Phoenix and looking at all Class A products, where 75% of it is cross docks. And then I come back into like the south bay and then the LA market and all of the inventory that’s older. And then, shed a few tears that it’s not as readily available. How does it change when you’re working with someone and they’re looking for that on how they use the building? On how you lay it out? How you come up with a strategy to operate going from like a rear load or front load to a cross dock? What goes into the math or the mental gymnastics to figure out, when that’s the right building for you or how you might lay it out different or how much you would benefit from having one instead of a rear load or a front load?
Steve Graham: The 3PLs are really the guys that are doing a lot with the cross dock type buildings. I mean, I shouldn’t just isolate them, they’re in use for a lot of the different types of businesses that we’re involved in. You’re probably more in tune with the marketplace than we are. I mean, we know that it’s a feeding frenzy out there right now and there’s spaces in high demand. A lot of times if we’re brought in and we’re kind of given a building and they said, this is going to be the building. We have our own in-house CAD department, and we do thousands and thousands of designs of racking, for all types of different buildings and things like that. Some of the buildings that are shaped a little bit like a horseshoe with the docks in the middle. And then, we’ve seen some other ones that are like squares and they have the truck bays that are sort of like almost interior of the building and things like that. So our guys have kind of seen almost every type of building that is out there. And so they can reference our library and then they can usually put into play. So if the customer has a target number of policies trying to store, for example, in that size building, then we can quickly reference that library and figure it out what would be the most optimal. We’re always coming from that reference point is the best use of the space, the most efficient use of the space. Even if the customer doesn’t want to rack out the whole building, that’s fine. Most of them don’t, but we always start from that standpoint so that as they expand their operation and maybe it’s the next quarter, or maybe it’s the next year or it’s three years or whatever it is. It was always set up correctly from the first place so they can maximize the amount of storage in the building.
Justin Smith: Yeah. And you’ve seen all the round ones and the ones along the train tracks and the ones that have cutouts for oil derrick. There’s a lot of funky stuff going on out there in some of the older ones.
Steve Graham: We’ve seen some real Barnburners, as they say. Some interesting stuff.
Justin Smith: Yeah, it was news to me because I’m not in your space, to hear more about, the supply chain shortages and how that affected talking about the wire for the racking or for forklift equipment and for a lot of the component pieces of any one specific layout. And I think a lot of people in our world hear about it in their own way, but they don’t hear about it as it relates to material handling. Maybe you can give people a where we’re at and kind of how you guys got through that and what we expect to see in this year anyway?
Steve Graham: Absolutely, good question. So just let’s talk really quick about racking itself and it’s just a giant erector set, basically frames. The frames are things to get anchor down to the slab and then the beams, run horizontally to hold the pallets. Those are typically green and orange and there’s new manufacturers and there’s dealers that deal in used racking as well. And so we have great relations with both parties. We typically do source the rack when it’s new from one of three different manufacturers and they all have points of manufacturing two in California, one in Tijuana, Mexico, and the fob points in San Diego. So the shipping is fairly inexpensive and that’s strategic by our design to obviously we could probably get a lower price out of Pennsylvania or somewhere, but if it costs you $10,000 a truckload, you’re not going to pull it in from Pennsylvania. And so we keep those guys on their toes and they do and some of those guys do manufacture and sell direct to people like Amazon. And so when they get large orders, they go from a typical, like eight to 10 week lead time and it might just shoot up to 20 weeks or something. Most of the non-Amazon customers really can’t wait five months or longer for racks. Out of the three that we try to source locally, somebody is almost always running somewhere in that eight to 10 weeks, 12 week range. What we saw with supply chain issues though, had more to do. That’s all steel made in the U.S. It’s all manufactured in the U.S. The accessories that support that racking structure, things like wire mesh deck, which are pretty commonly used. Kind of a wire grid that the pallet sits on top of. Those are typically always made in China. There are some other kinds of ancillary products similar to that that are also made in China for a while there last year that we thought there might be a shortage on anchors, the actual wedge anchors that are used. We acted quickly and we bought, I think we bought a hundred thousand or something like that, just to have in our own inventory, just so that for emergencies, cause you’re not going to put up a lot of rack unless you have some anchors.
Steve Graham: So we also did move on some of the accessories as well, just from a strategic standpoint. The thing that really has gotten to be a bit of an issue in the supply chain world are the forklifts. So a lot of times what we’re seeing our customers, clients that are expanding operations want to set up a new building and that’s great. And we can install for the rack kind of like I just described however, if they’re utilizing maybe a what’s called a VNA, very narrow aisle application where the aisles are about six feet wide. Those forklifts that run in those aisles are usually on what’s called wire guidance. So that’s where they cut a little, a groove in the slab and we’ll install a wire. Our company, we do that as well. And then the forklift sort of rides on that wire. Well, those trucks are out about one year close to a year, 50 weeks in that range on lead time for manufacturing and all the manufacturers are way out there. So, unless you have like some really forward thinkers, you know, going back like a year we actually have a couple of customers that are kind of behind the eight ball with that right now. And so we had to switch their designed to just a general layout with a wide aisle and they’re going to use a different type of a strategy.
Justin Smith: So what happens with all that?
Steve Graham: Well, just spend some more money. We can take the rack down. We can reinstall it and putting the wire down the road, but forklifts are definitely a way out there. And in some cases with a backup at the port accessories, the supply chain is turbulent. It used to always be like, almost like if you had to run down to Home Depot and buy a shovel. You needed a shovel or something like that. There’s always going to be one there and if they were out, you know they were going to be back in stock next Tuesday. But what we see some of those accessory products that I mentioned earlier, those when they’re out of stock, there aren’t any more. It’s just zero and you’re looking at 16 to 18 weeks for back in stock. So a used racking has become more popular, but the price of used is in some cases is even higher than new. It’s kind of bizarro world a little bit.
Justin Smith: That’s the premium for the buy it now option.
Steve Graham: Yeah, exactly. And especially if it’s like a heavy application where they needed a very specific rack to hold a specific weighed product or something heavy. Those are usually much scarcer in the used inventory market. We’ve had projects where we’ve looked all over the U S for certain things and there just aren’t any.
Justin Smith: Well, what concerns do you have with used? I mean, I imagine it’s just like the structural integrity is the main, the main piece, but if there’s no damage, then you can cut them to fit different heights. That’s the little that I know about when you’re going used as opposed to new.
Steve Graham: Yeah. So every project that we do, whether it’s a permanent project or not, we’re always going to flush it out with our engineer. So the engineer, we’re going to give him the spec of everything, the spec of the pallets that are going to get stored there, primarily the weights, and all the pedigree on the buildings, such as the slab and our elevations of the rack. And then he’s going to tell us in writing, give us a report, the specification of the rack, how thick does the steel have to be? How big does the column have to be? How big is the base plate? How many anchors does it need? We use that spec then to go out and go ahead and price out the job, whether it’s new or used. So if it’s a used application, the customer wants to save money or something like that or they just need it right away. We’ll use that spec to go source it out. So yeah, you’re right. Sometimes we can cut things down or change footplate. So if somebody had a requirement, maybe they were in a 24 foot clear building and they needed an 18 foot tall, upright to fit within that building and the only thing that we could source with say a 26 footer, it’s not uncommon to have those cut down to 18 foot or they can cut off a foot plate and re-weld on. And you know, it’s all pretty safe. The used rack that we sell, we only buy it from well-vetted dealers in Southern California and then we have a few in Texas and other parts of the U.S. And it’s really important because the rack that you’re going to get, you want to make sure that what they’re telling you to be in some cases, we’ll go out, we’ll inspect it, we’ll get pictures of it. You want it to be in good condition. You don’t want it to be like a big pile of rust or anything like that. And so we’re not going to just buy any old rack off the street and put it in, it’s always sort of coming from a reputable source.
Justin Smith: You were talking about in the very narrow aisle. Would you mind doing a quick a one-on-one on when we’re doing that and how it changes your operation? And maybe even like your throughput and different considerations you need to take when you’re thinking of designing that program or that type of layout for your building and your operations?
Steve Graham: Yeah, absolutely. so very narrow aisle, is typically the aisle is going to be about six feet wide. A standup forklift is usually running in about a nine and a half foot aisle and then as somebody that’s sitting down driving a forklift that’s going to take about a 12 foot aisle for the truck to spin around in a circle. So the sit-down ones are usually on the dock because they can go into the trailer and load and unload trailers and that’s their purpose. The stand-up ones are called reach trucks and then back to the very narrow aisle. So the narrow aisle utilizes the floor space more efficiently, obviously because the six foot aisle you’re putting in a lot more rack. We see them a lot used in both pallet storage where the customer is going to use a very specialized forklift. It might be called a swing reach or a bendy. And it’s kind of like if you look at like a fire truck that has the guy driving on the back, like a ladder truck, it’s a little bit like the same concept. A lot of times those are in operations where one, the customer is a sophisticated customer and he’s going to make the best use of that space. The most efficient use of the space. If he’s storing pallets, the wire guided trucks that bend like that are incredibly expensive, well expensive compared to a standup truck. They might be four or five times the cost. The other application that we see those in are picking environments. And so the benefit of the very narrow aisle with a pallet storage put away is that they, the trucks can go really fast because they’re on that wire and they have the confidence and reassurance that they’re not going to hit the rack. And then just the way that they operate, it allows them. I think off the top of my head, I think a typical throughput is something like 17 pallet moves per hour. It’s like one every three, four minutes, which is really fast. It’s a little over 30 I’m sorry is what it is compared to a standup one, which is about 17. So they’re, they’re about twice as efficient, but they cost a lot more. So it’s somebody who’s going to be in it for the long-term. The other area that you see the wire guidance in the VNA. it could be an e-commerce where it’s, there’s like a shelving set up and they have, what’s called a man uplift. So the operator is going to be wearing a harness. He’s going to go up with the lift, do the pick, put it up onto a platform or his cart and then go back down and then he can do a lot of picks. I was just out at a site I think it was last Thursday, they had that installed and it was a furniture operation. So that’s another one where they’ll have like a big platform on the end of the forks with like maybe a railing or something. The guy will go up and he’ll grab a piece of furniture and kind of the gap between the forklift and the rack is only four inches or six inches or something like that.
Justin Smith: Do you get paid extra to be up there? That sounds like you got to have no fear of heights up there.
Steve Graham: Yeah, that’s why I landed in this illustrious world because I had to abandon my career in the fire department because I don’t like going up on the ladder and all that. But I don’t know how those guys do it. I mean, when they’re up 26, 28 feet, I guess they just kind of get used to it like anything else. But they do go incredibly fast and that is really the ultimate benefit of the VNA system is one that uses space and two, the speed and the operation, whether it’s pallets, the handling of pallets or the picking of orders. That is a benefit, but the cost is, you know, you’re going to spend a lot of money on the trucks. There’s an additional cost to put the wire in.
Justin Smith: And take it out? Or is it like epoxy?
Steve Graham: It’s already covered with an epoxy coating, so it’s good just to stay in there. Depending on the size of the project, that the cost of that wire, I believe a little over four bucks, a linear foot. That’s install, that’s everything. And then there’s also a controller box that has to be hooked up to that and there’s some calibration and some brand new buildings you also have to pull a 110 outlet to that box. Some people want the box way over on the other side of the building. There’s no power over there. You know, that could be an expensive, run as well.
Justin Smith: Yeah, give them electrician dollars involved in there. Then do you think that higher use of, the denser uses, could be 20 or 30% more like a pallet position as a result. If you take a, like a one that’s a narrow aisle and one that’s either 9 or 12 feet?
Steve Graham: It’s tough to put like a general number too, because a lot of times that, you know, we’ve seen those in kind of older buildings. They’re using a more for shelving. They’re using the pallet racking or in some cases we’ll even put it kind of a medium grade rack or a light rack, which is more of like a rivet tier something you might have in your garage at home. Those actually can go up, you know, 20 feet high. So it’s challenging to put a number. But I guess they it’s pretty clear I would just say when customer knows, they know, and sometimes it’s a little bit of a mix of both. I mean, we have one going right now where literally half they’d want to go VNA, and the other half is not. And they just have like a lot of small things. Like I said, we also see that in apparel, so imagine t-shirts or clothing or socks. small, medium, large. Red, white, and blue, all the different colors. They have a lot of boxes that are maybe 12 by 12 or something like that. They just kind of know when that’s the appropriate application for it. I don’t know what the, that number is, but I just know that the advantage is there and it’s kind of a no-brainer for them.
Justin Smith: Yeah. Maybe this will be one of our wrap up questions with just other systems that e-commerce is using, or do you think of like the penetration for a 3PLs into the e-commerce space for e-commerce growth? Nobody feels like we’re at the end of the e-commerce run. Everyone feels like we’re beginning. maybe all or there’s plenty of addressable markets. So I’ve got to imagine that there’s more applications and there’s a lot more like a warehouse automation or engineers involved as you see more e-commerce users. So what other parts of the warehouse and a material handling system do you get involved with for e-commerce?
Steve Graham: Yeah, I can touch on that too. I would say a few years ago, a typical e-commerce installation or designed for us might have been a warehouse all full of rack. You’ve probably seen a hundreds of them, you know, rows and rows and rows of pallets. And then over on the far end, they would have one that was dedicated to e-commerce and that might’ve been shelved out, or it could have been a combination of things like that. Certainly no wire guidance. Certainly none of the things that we just talked about. In some cases we would run, what they call carton flow. So it’s sort of like a roller that are feeding boxes to the center aisle there. And then we would put a power conveyor takeaway down the middle. So that would’ve been a fairly like kind of garden variety e-commerce setup for somebody in a large warehouse or even a 3PL. I would say in the last two years going in two and a half years, we’ve actually done some jobs where we’ve removed all of what I just described. Taken down some of the rack and then we’ve built up like multilayer pick module. and that’s essentially a platform on a platform on a platform. In some cases, the racks supported, in some cases they’re just platforms with shelving on there kind of depends on the application and the weight really. Everything again is engineered, and everything’s designed to withstand whatever weight that they’re going to put in there. We actually just did sort of a fascinating job on a huge 3PL. That was over here in Southern California, and we did exactly that. I mean, they kind of on the fly of like, hey, we want to put in some shelving over here, that thing blossomed while we were. We had to go kind of back to the drawing board, resubmit plans to the city and everything. And that kind of went in favor of a multi-level. I think it was a three-level pick module with power conveyor, that are taking the packages over to the dock and that one also had a spiral power conveyor takeaway. So, sort of like a slide, like you’d see at a park or something like that with the power conveyor. What they’re going to do is they’re going to arm that whole pick module with many, many, workers that are picking orders. There’s gates that forklifts are replenishing with pallets. It’s a pretty unique operation, but we had two of those going simultaneously in Q4 and we had another one just right before that, a big one out in Fontana. So those are starting to become more popular, especially with the 3PLs, but even companies that were primarily just doing distribution or selling to dealers or selling to retailers, their e-commerce divisions have gone from that little corner in the warehouse to, hey, tear down like a third of the warehouse and build us something that, you know, has a lot more horsepower behind it.
Justin Smith: Yeah, that’s super helpful. And I would imagine that that’s a, not only a lot of work design equipment labor on the install and thanks through people, leasing buildings versus zoning, right. But 3PLs at least for building and you think about how often you want to be renegotiating, knowing that your landlord sees what you’re doing in the building, and then knows it’s expensive to move. Do you think people are underwriting that for 10 years at a time or amortizing it over that, or that seems like that’s still a long time like to do all that for five years and have to get up and go. It seems like that’s also a stretch of the imagination.
Steve Graham: It’s a head-scratcher for me. We’re a little bit distant obviously from the lease terms and negotiations and things like that. I would just say, it seems to me that in what I hear, we ask those questions sometimes. Obviously, they’re not going to make a big investment like that if it’s a three year or something like that, but it does seem to me that most clients that we’re dealing with customers are signing three and five-year leases. I would say sadly, almost everybody, the minute they sign the lease they sort of outgrown the building before the end of the lease. That’s something else that, we can help people with, if we can get involved early enough in terms of the space planning and how their orders might be increasing. The last couple of years, I mean, we had one customer that was in the apparel space and did a really nice layout for him and did so many things. I mean, we crammed every little bit of storage that we possibly could in this building and his product line just took off so much more so than what they had projected. Corporate headquarters decided to launch a women’s clothing line or something, something they could not have foreseen. And so I guess those are good problems to have. But I would think that on the pick module, I would think that you’d want to be there at least five years and more likely 10. I mean, it’s so hard to predict what’s going to happen 10 years from now, but I would think that for the investment it’s actually not as bad as it might sound. I mean, when you’re talking about those structures and things like that but they’re not cheap. I wish I could throw you some numbers in to say other there’s so much per square foot or something like that, but there’s so many factors that it’s really hard for me to just kind of give you a number to that. They’re not cheap on one hand, but they are not crazy money. They’re not millions of millions of dollars. And even the conveyor that goes in there can be in some cases that can be sourced used. In some cases, there’s very, very good use conveyor out there and controls and things like that.
Steve Graham: We try to pride ourselves on being very good buyers. We try to put ourselves in the shoes of the customer. We always lead from a position of, hey, we think this would be the best approach and the best solution. Now let’s look and see how we can accomplish that in the most cost-effective way. You know, we’re not going to just go sell somebody, thousands of thousands of dollars of conveyor, on the new market if we know that we can get it used. I mean, we always like to present those opportunities and we think that’s how we, drive a lot of value with our custom.
Justin Smith: That’s awesome. And then it’s funny with the expense side versus having flexibility to grow. Like that expense is at least something that they can quantify. Where the demand right for their products or for a new product line some have visibility into that and there’s opportunities out there and you just have to figure out what it’s worth to you to capitalize on those.
Steve Graham: Again, I’m just speaking from one perspective, and I really appreciate the voice and airtime today. Justin it’s really been nice to chat with you and answer a lot of these questions. But I think that the last couple of years certainly has been kind of unchartered waters for so many of us in so many of the areas that we’re in. I would say that kind of triggered a bit of an explosion, I guess when you suppress the U.S. economy, the way that it was suppressed in 2020. You just can’t hold back progress that long and so the growth and the demand kind of just exploded on everybody last year. But I think that’s what we’re seeing, I like to think that we have our finger on the pulse a little bit, even though we’re just kind of a racking company. We see exactly what’s going on. We see what’s going into the buildings. What kind of products are going into the buildings? How are people using the buildings? We have a lot of customers that are global companies publicly traded. We’re tight with a lot of the executive level people that are presenting they’re kind of behind the curtain’s growth plans and things like that. And I would say generally speaking that, you know, the outlook certainly this year in the next few years, you know, barring any pandemic war, all those kinds of things. I would say it looks really strong. The indications are incredibly strong in this space. Like I said, we try to be, the best partner that we can to anybody that come to us. It doesn’t matter, you know, really the size of the job, especially if it’s a referral from a broker or a property manager or property owner. We have one property owner that his spaces are sort of small, the jobs are relatively small in size, maybe under $20,000. It doesn’t matter to us. I mean, we have, we have a very good system in place for supporting customers at all levels.
Steve Graham: Now on the other hand, if somebody hit our website and they just want to buy a couple of rocks, I mean, that’s not exactly what we’re here to do but we don’t turn our back on anybody. We try to bring that value to our clients and existing customers day in and day out and if we do then, you know, typically good things happen.
Justin Smith: They do. And we appreciate you, Steve. I know you help the people that I know and trust, and we’re glad that you’re there to help us. So, Steve Graham, Catalina Material Handlers. Thank you for joining me today.
Steve Graham: Thank you very much. Appreciate it.