United Pipe & Steel opens new Midwest facility
BY MARY JO MARTIN
Editorial director
Despite the challenging economic climate — and with many companies forced to make cutbacks — United Pipe & Steel has actually continued its expansion mode, recently opening a new facility in the Chicago area.
The company now operates six distribution centers and a fleet of 24 tractor trailers to service wholesalers in 27 states with ltl shipments of pipe products. Their customer base includes wholesalers in the following market segments:
- Plumbing and heating
- Pipe, valves and fittings
- Electrical
- Pump and wells
- Waterworks
- Irrigation
- Excavation.
United Pipe & Steel carries high-dollar-value products that are often costly to handle and subject to volatile pricing. Their full inventory of commodity pipe products includes:
- Copper tube (straight lengths & coils)
- Steel pipe 1/2” through 8” (Canadian and domestic origin)
- Plastics (S40 and S80 pvc, fg Gold cpvc, S80 spvc, s&d, sdr, abs)
- Copper linesets
- Electrical (pvc and metal conduit, strut, threaded rod).
With headquarters in Ipswich, Mass., the company expanded into the Midwest in 2006 with a distribution center in the Cleveland area, followed the next year with a warehouse near Indianapolis. From these facilities, United Pipe ships to customers in West Virginia, Kentucky, Ohio, Michigan, Indiana, Illinois, Tennessee, Missouri and Wisconsin. In 2008, they opened a facility in North Carolina, which allowed better access to customers in Virginia, North Carolina, South Carolina and Georgia.
In October 2009, they opened a facility about an hour from Chicago, allowing them to better service the greater Chicago area, and also reach customers in Wisconsin, the Minneapolis/St. Paul metro area, as well as Des Moines, Iowa.
Dedicated inside and outside sales representatives serve each territory, and nearly all of United Pipe’s deliveries are made by its own employees using the company’s fleet of trucks. General manager Greg Leidner believes this ensures high-quality service from the time of initial quote all the way through to delivery. “Our business model is not about the first order — it’s about the weekly re-order process, and we make sure that customers’ expectations are exceeded throughout the whole process,” he said. “The name of the game is dependability.”
Leidner recently spoke with editorial director Mary Jo Martin about the direction and continued growth of United Pipe & Steel.
MJM: In today’s struggling economy, many companies are hunkering down. How did you make the decision to use this time to invest further into your business?
Leidner: Above all other factors, customer demand has led us to expand into new geographies. More and more, customers are becoming more sophisticated in their purchase behaviors. What I mean is that customers are approaching pipe as an asset, and they are looking to increase their inventory turns on this important asset. Wholesalers are realizing that they can realize tangible benefits from working with United Pipe & Steel to reduce their risk on volatile commodities, and ensure that they always have competitive product on the shelf to service their customers.
The timing is good for us because the difficult economic situation is challenging customers to take a close look at all areas of their business, from how they price their own customers to how they order commodity pipe products.
Finally, from a strategic point of view, we view this economic downturn as an opportunity — an opportunity to find good warehouse space and to hire great people into our organization. Counter to the national trend, we have job openings in several areas of our company, including sales and operations.
MJM: You recently started the process to open a new facility in the Chicago area. Please share with us more information on this exciting development?
Leidner: We’ve actually been servicing wholesalers in the greater Chicago area with weekly deliveries from our distribution center in Indiana for the past year. But the volume we’ve done in this geography (the third-largest city in the U.S.) justifies increasing our presence — and service levels — even further, and opening a 100,000-square-foot facility within approximately an hour from Chicago will allow us to accomplish just that. As with all our locations, we store all our steel pipe and copper tube inside so it looks as fresh as the day it was manufactured when it gets delivered to customers.
We will be able to service the Chicago metro area at least twice per week with regular route deliveries and low minimums for ffa. Additionally, customers will be able to do will calls at our new facility in Loves Park, Ill., so if they can’t wait for their delivery day, they know they can have access to high-quality and competitively-priced pipe products. In essence, they can lower their inventory holding costs even further, knowing that our stock will support their business needs.
Finally, from this new facility in Loves Park, in addition to servicing Illinois and Wisconsin, we’ll be able to provide wholesalers as far as the Twin Cities of Minneapolis/St. Paul as well as Des Moines, Iowa, with weekly deliveries. By the time this interview is published, the facility will be fully operational.
MJM: Have you selected any personnel to lead that new operation? Will they be familiar industry names?
Leidner: They will absolutely be familiar names. Industry veterans Michael Blair (national sales manager) and Gerald Slattery (director of steel pipe sales) will be leading the sales effort, supported by our top-notch outside sales force, all of whom will be visiting customers and prospects throughout the next several months. Additionally, this sales effort will be supported by an extremely strong, experienced inside sales force, and a top-flight operations team to ensure that deliveries are made on time and complete.
MJM: Is today’s economy creating even greater demand for master distributors, as wholesalers are trying to cut back on their inventory overhead?
Leidner: Definitely. The transformation over the past two years has been incredible — more and more wholesalers, from the very small to nationals, are turning to master distribution in pipe products. There are real, quantifiable benefits to working with a master distributor such as United Pipe & Steel on commodity products:
- Reduced inventory holding costs
- Increased turns
- Reduced risk of inventory devaluation (more predictable margin realization)
- Simplified purchasing — one purchase order for multiple product categories
- Advice on commodity trends – our sales force will give updates to customers on a weekly basis.
Additionally, our vendors — all manufacturers of high-quality piping products — are increasingly looking for large-tonnage, regular buyers. We help them base-load their operations, and this is increasingly important in this economy.
MJM: What are some of the ways you’ve chosen to market your business and attract potential new customers?
Leidner: Word of mouth is perhaps our most powerful marketing tool. It’s a small industry, and wholesalers are constantly trying to help other wholesalers (who they don’t compete with, of course) find ways to improve their operations. Whether it’s at a regional wholesalers association meeting, an asa show or a buying group conference, wholesalers talk. We’ve brought onboard literally hundreds of new customers that have learned about us from another wholesaler. Of course, nothing beats “pounding the pavement” to meet wholesalers in person and explain to them what we offer, how we offer it and that we have a sales force that is second to none.
The best way we have of earning a second order is our performance on that first order. We provide high-quality product, excellent service, on time and accurate shipments. And we earn increasingly deeper levels of trust with our customer base with every order we deliver.
MJM: You recently updated your website. What are some of the functionality that customers may make use of? How is this benefitting you and your customers?
Leidner: Well, speaking of word of mouth, one thing we put on our website is a section called “Testimonials.” It’s a slideshow of customer quotations about United Pipe & Steel — our inventory, our dependability, our people, everything. Another enhancement we’ve made is that we’ve put our delivery schedule on the site. Customers can find out exactly what days we’re in their area each week. Finally, we have all our list price sheets available, as well as submittal data and spec sheets for all products. Customers have reported that our site is easy to navigate and full of useful information.
I just want to reiterate that these are challenging times – for all of us. And I want to thank our valued customers for their continued support. We appreciate the opportunity to continue to earn your business.
If any of your readers have questions about our company, they can feel free to call me at 800/777-pipe (7374) or e-mail me at gleidner@united-pipe.com.