[00:00:04.990] I’m happy you brought it up because I think talking about the difference between structural and roll form is a lot of the questions that come up. Sometimes it’s a preference. Obviously, there’s a safety aspect to it. One is definitely a little bit sterter if we’re thinking of a structural steel. But maybe in terms of a percentage or understanding the true differences between a structural rack versus a roll form beam or upright, is there anything… Obviously, there’s the composure of what it does. But in terms of utility, in terms of structure, in terms of being able to get the job done, is there anything drastically different between the two? Should we favor one versus the other? Now, you gave a couple of good examples of when structure will be used over roll form. But do you have any other insight on the comparison between the two?

[00:00:58.380] In comparison to two, Functionally, they are identical. They both accomplish the goals, story, palettes, or whatever you’re putting on the system at pretty comparable capacities. Now, in special circumstances, when capacities are greater, Structural does become that main, I guess you’d say that the most advantageous system is heavier, there’s more steel, is able to take larger loads. I can have a smaller footprint, and I think that’s one place that’s something good to keep in mind is in some facilities, given the size of their pallet, I think a great example would be in a freezer condition. You’re splitting hairs when it comes to space. You really want to maximize the amount of density you’re getting into a room. In that situation, sometimes moving towards a structural beam or a structural frame gets you a reduced footprint or height that squeezing in, let’s say, over the course of six levels, you’ve got 3,000 pound levels or 3,000 pound pallets. So you’re looking at a five-inch step beam, but you can get away with a four-inch structural beam. You’re able to save an inch off of each level, which could be the difference between an additional pallet position, especially when you take into consideration the clear height that sprinklers may require at the top of the system.

[00:02:24.000] So that’s one of the big places is that we have the ability to pick your beams based on your clear height and shave similar in the structural fashion is that we can get away with a smaller… Now, when you do a 4-inch post, that is 4-inch roll form, 4-inch structural, pretty equal size of things. But When you want to then push the bounds of capacity in a lot of these racks of more than buildings, you’re going to see a structural set as you’re moving to C5s and C6s. You’re seeing these big heavy duty structural members because the roll form just isn’t at that same level of capacity. Additionally, in some of these situations, like a freezer, for example, your cost replacement is substantial. To get installers into that space, oftentimes they’re working at pretty close to double the rate. Things break, things slow down. There’s a lot of contingencies built into that cold condition. There’s ice potentially formed, so impacts can have a higher risk. Moving towards that structural system gives you an additional impact resistance that could save on that maintenance line item that we talked about earlier, that roll form may not necessarily provide.

[00:03:36.330] I think that’s the biggest. It comes down again to that standard quote we use, which is putting your steel where you need it and not so much a capacity advantage or a functional advantage, or rather a preventative advantage.

[00:03:56.420] If I’m a very cost-sensitive client Obviously, I want to mitigate any replacements, and I want to mitigate the maintenance requirements. But I’m just convinced that roll form is the right way because it’s a little bit cheaper. Obviously, there’s less steel. I know there’s ways to call it mitigate risk with roll form. If we’re talking about any protectors or upright protectors or shock deflectors, being able to take that initial impact prior to even getting to the up rights or the different beams as we’re walking through it. When you’re looking at all of those little additional components of going to that roll form beam, getting all of these protections all around it to try to make it as strong and as robust as that structural system, what at the end of the day… Well, first question is, what are all of these components that we maybe be able to put around this roll form to get it to the level we need? Then two, if you consider all cost of all of the additional components, are we really talking that roll form is a great premium, like still 10, 15, 20% more expensive, or because you’re adding all these protections to the roll form, we’re stabilizing that cost and it almost becomes a preference at that point.

[00:05:30.180] Is that an accurate statement or do we still see a pretty vast difference even after protection and all the different components we can do to roll form?

[00:05:40.280] I think height is a big factor of that. Roll form really starts to shine in a cost savings, the where you go. The taller you go, the amount of steel, the post is a large part of the steel. As you go taller, there’s just the weight really starts to climb on that structural versus going with the roll form option. In a short facility, let’s say that sub 20 foot clear height, it may actually be very close. The difference between a structural system and a roll form system that’s heavily protected to give you that resistance that that structure would give you may actually come out really close. As we climb That’s a different story. What we’ve seen is that there are specific industries, freezer being a big one or cold storage and grocery that really lean towards that structural system. It In some situations, a lot of customers, like you mentioned, just have a flat out preference for it. They want that stronger, they want that heavy. But in the cost-sensitive customer, it becomes an interesting balancing point. We can reinforce and create welded plates and welded angles. As a manufacturer, one of the advantages we have is that we can build the protection into the frame at the manufacturing standpoint and not go with an aftermarket product line.

[00:07:02.930] A great example I use is having that balancing choice between the floor mount and post protector and a welded angle or a bull nose that’s then anchored. Extra anchors help. It reduces that chance of torque, and that welding aspect makes it less of an install. If I got a welded bull nose to the front of my frame, installers are putting up the frame, they slap in that single anchor. Whereas if I go a floor mount and post protector, maybe now I’m four anchors into the floor plus that separate piece. On top of that, from a functional perspective, now I’ve got four anchors that are there that potentially can damage my pallets or have a straddle lid go over versus the bull nose that’s nicely nestled into the frame and a little less impedance. But one thing that I can throw to the cost-sensitive side of things is coming down to also understanding your machinery. Now, there is This is the optimal aisle space for racking that you can get away with. Reach trucks are designed to be able to play in as lean as 110, 111-inch aisles. But in theory, that’s great. In actual practical application, it becomes a lot more difficult.

[00:08:20.920] In this design stage, we’re talking about the column spacing earlier, is you give that opportunity. It’s like, Okay, well, you know what? I’m not going to go towards structural because I want a more cost-efficient system. The column-let spacing isn’t perfectly conducive to that 120-inch aisle. I’m not really gaining anything by sticking to 120 because at the end of the day, I have an extra 10 or foot of space on the other side that’s not being used. Maybe now you have that ability to expand the aisles just slightly and give your operators a little bit more comfort and cushion in the system that offsets that savings on material with functional benefit. I think that’s a big thing. A 120 is the golden standard for reach trucks. But from a functional perspective, once you factor in your three-inch overhang on pallets on a standard 42-inch deep rack, now you’re down to 114. Adding that three inches back and going into a 126 might be that difference between a big maintenance line and a short maintenance line.

[00:09:28.980] Yeah, I know. That makes It’s in a sense. And I mean, even if we think about height, because I like that you brought up the notion of this hybrid system, which is, hey, put structure at high impact points. I’m thinking end of aisles. I mean, uprights in general. I don’t know if you can split an upright between start at the bottom off a little more reinforced, and then you go up to height. I think it’s one or the other, I’m assuming, at that point.

[00:09:53.130] You can do bolted options. That’s a really interesting situation. We have had customers who do a fully structural first two beam levels and then go roll form for the top and there’s a bolt or a welded connection, and they have that really beefy lower, but then it’s a lighter duty above. It is possible, but it becomes a case by case, and I think it really comes down to scales of economy in that situation. If you’ve got 50 frames, the cost for that custom frame is not necessarily going to justify the initial upfront spend on a manufacturing perspective. But if you’ve got a thousand frames and now there’s a scale of economy attached to it, there is an advantage. It is possible, but I think that’s going to be a size dependent situation. But one, tying into that, you have structural frames to get that beefiness. If you have first or second beam level, structural because those are your high impact locations, and you go roll for them for above. In a 100 bay, eight or six beam levels, you’ve got what is that? 12,000 beams. Roll form beams are almost half the cost of the structural beam.

[00:11:04.980] If you do 80% of your beams and step roll form and then the other 20% structurally, you save quite a substantial cost on that.

[00:11:14.050] Would customers Does that ever come to you with that notion, or often it’s something that you guys will put forward as, Hey, here’s a hybrid option that may be feasible based on the budgets or based on the requirements that you’re going for? Because I highly doubt that anyone knows that going into a purchasing process?

[00:11:37.520] We’ve had some. That’s an interesting thing. We have had some come in with this idea of how to save on that sense. Oftentimes, I think this ties into the transition in the market they were experiencing right now coming off of COVID. For the last five years, people were just moving, and they were moving fast, and they made decisions fast. In an RFP situation, they aren’t necessarily sitting down to really work through all the different due diligence of how they can save money. When someone buys a car, they may go in and say, Hey, here’s my budget. In the situation of racking, very rarely your customer is coming to you and saying, Hey, this is what I’ve got to spend on racking. Can we save me some money? That’s an interesting paradox. I’m curious to see how you, being on that RFP design stage of things. How can you create an opportunity where these types of innovations to a system can be presented, but doing so in a way where you don’t end up with seven different proposals from your racking vendors, and now you have no idea of how to cross-compare them. I think I’ve had this conversation a couple of times, and sometimes it’s just better to go apples to apples in that early stage and then refine who your maybe final pick or to is, and then have that ability to go through it.

[00:13:00.230] But the question is, is how do we get that level of creativity early so that it’s not necessarily ignored after the fact?

[00:13:08.210] Yeah, I think you probably hit it nail on the coffin. We have to do apples to apple comparison. So no matter how creative a racking provider can be, for us to be able to give a good recommendation to our customers, we need to be able to compare the different bids, which is why we go into some pretty of aggressive detail as we’re presenting these. And you’ve obviously been on the other end of some of them as they go through. But we also do mention, Hey, if you have alternates, if you have value engineering components, that would be interesting. Please include them in this subsequent section of saying, Hey, the base bid is $10 million, but we’re able to go shave off 500 for this, 200 for that, 150 for this. And that also shows that you’ve put in the time and you’ve put in the effort and you didn’t just do a generic answer to the bid, and it allows us to compare through. So I think you nailed it right there of we have no choice but to say we want a structural or a roll form bid. Maybe that’s not the component. We’ll just say, specify what you want to use.

[00:14:15.130] Customers may already have that requirement or that preference as you’re walking through it. I think understanding the environment of what you’re working through, and that’s where we can offer a recommendation prior to building that RFP. If you’re a fast, high velocity facility, and I’m thinking a lot of food service providers where you’re getting hundreds of thousands of cases out on a weekly basis, you got guys flying through this warehouse and speed is more important than anything else, well, you may want to go through some of that structure or racking. But if you have a lower velocity, big, large orders as you’re walking through it, you may not need to be as concerned and you have those big bigger aisles. It’s a good component of understanding the difference between the two. It’s definitely always going to be questions that get asked. I think the roll form versus structural is always an interesting one because roll form is, I’m going to call it a newer racking structure compared to that structural steel. Depending on the business you are, you do have those old-school characters that this is the way we do it and this is why, versus the newer players that will fight to the death to know that these are equivalent racking systems that all get the job done, which obviously that they do.

[00:15:40.960] But that maintenance piece, I think, is a big one that is not often considered when you’re looking through these different solutions.

[00:15:52.390] Yeah, it’s that maintenance. But even the opportunity or the operational cost, if you lose access to a raise of racking, what does that cost your business? How long can you afford it to be down? Especially as we go to these really tall buildings and you’ve got 35-foot frames, 40-foot frames. People don’t just have that sitting in their warehouse waiting for you. They’ve got to be made to order for that specific case. Are you stocking backups? Is that part of your initial procurement to have 10% additional frames or beams just sitting waiting on the off chance that this damage happens? I’d say at this day and age, I wouldn’t even call it an off chance unless you’re in a fully automated system. Someone’s going to hit it at some point in time. What do they say? The stat that this year or next year, Amazon will have exhausted the labor force in America for their warehouses. And these are going to have a lot of new people driving these machines, especially when you’re transitioning from 16 foot to 40 feet. That’s a whole new level of operations that your team may not necessarily be trained on or experienced on.

[00:17:06.090] You’ve got to have that forgiveness built in until they are caught up to speed.

[00:17:10.960] Well, Tony, I really appreciate the insight. I think we touched on our topics for today. If anybody in the audience has any questions, obviously feel free to reach out to North American Steel for any racking requirements, whether it’s questions about what to go with, our ideas, and obviously, hopefully reach out to Lynn as well, looking through that design phase. So again, Tony, I really appreciate it.

[00:17:35.870] Thanks, Mark. I appreciate your time, too.