Racking Up The Savings

With steel prices rising, companies need to re-evaluate racking purchases.


Next Generation Logistics' Beery suggests that before companies make a decision about what type of steel to utilize, they should consult with a racking company that supplies both types, tell them what function the rack system has to provide and listen to their advice. In some instances, structural steel, while stronger, does not function as well as roll form.

"If you have a high damage rate because you're using wide trucks in narrow aisles, you're better off with roll form than structural," says Beery. " If you damage the bottom one to two feet of a structural steel rack, the damaged portion can't be cut out and replaced, as is the case with roll form."

The racking experts say that companies planning on new racking projects this year need to get a baseline understanding of what the costs for the project will be by the time they need to purchase the steel.

A current quote won't be good in 30 days after the steel mills roll out yet another surcharge increase. This means that it's important to mutually agree on a way to chart the increase or decrease of prices from the beginning of a project until the steel is delivered.

"You need to sit down with the supplier and say that you understand what the price is right now," says Steel King's Curry, "and you understand that you don't need the rack for five months and in the meantime, you're going to track the price changes together."

The most common way to track these changes is through steel industry websites. Curry says it's a customer's responsibility to stay informed so that he isn't surprised by sticker shock when it's time to pay for the steel.

"You have to be open, pay attention to what's going on and have meetings with your vendor," says Curry.

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