Mhlnews 814 Value0100

2007 MHM Value-Added Award: Survival Instincts

April 1, 2007
This year's Value-Added Award could be renamed the Survivor's Award for this Shreveport material handling equipment distributor.

Each year Material Handling Management selects a member of the Material Handling Equipment Distributors Association (MHEDA, Vernon Hills, Ill., to receive its Value-Added Award. This year's honoree is Nelson Equipment Company (NECI, of Shreveport, La. Here's why.

NECI was founded in 1968 as a distributor for Clark Equipment by Jack Nelson. In 1981, after the sale of the Clark line, Mark Nelson restructured the company to focus on other aspects of material handling systems and equipment. Today, the company's focus is on conveying systems, storage and retrieval systems, and dock and door systems.

Recovering from the hurricane season of 2005 took vision, dedication, perseverance and skill. At a time when other companies were going under, NECI managed to stay afloat, keep its employees on the payroll and provide valuable services to its community.

"We're not a big company," says Mark Nelson, president and son of the founder, "so we all wear a lot of hats and manage to have some fun along

the way." Nelson's enthusiasm for what he does, along with his voice inflections that reveal his Southern heritage, belie much of the disaster created by hurricanes Katrina and Rita.

"The double whammy [Katrina on August 29 and Rita September 24] displaced about 60% of the state's population," says Nelson. "So, of course our whole market disappeared overnight."

Following hurricane Katrina, Nelson was out of communication with all of his employees for at least three days. As he and his brother, Kurt Nelson, vice president, began to reestablish contact with folks, the first thing they did was assure all employees that they would not miss a paycheck. He told them, after they got themselves settled they'd all figure out what Plan B should be.

"People had lost everything they had," he says, "so we wanted them to know they'd have some money coming in, and we'd work to relocate them to temporary housing if need be."

He also knew there would be no new equipment sales in the immediate future for southern Louisiana. Nelson looked around to see what the market needed most. The only option was to re-invent the company along the lines of service and support. That became Plan B.

"We took on a lot of repair and maintenance work we might not otherwise do," he says. "If we wanted to get back to business as usual, we had to get our customers back into operation. We did all the material handling kinds of things we could find, and took on work outside of the normal maintenance support." This included work in the construction field, he says.

The big picture
For people not hit by a major disaster such as this, it's hard to imagine an entire geographic area suddenly having no resources, technicians or support services. People living in the hurricane-devastated area were worried about their families and personal property, first.

"Being north of the major disaster, here in Shreveport, we were able to send resources down [to New Orleans] to assist our customers, no matter what their needs were," he says. Even those whose physical property wasn't damaged, he adds, didn't have enough people available to operate equipment.

"Ironically," says Nelson, "many of our customers' buildings came through okay, but their employees had moved out ahead of the storm or had been wiped out. That hurt them for months until the first wave of people could return."

As it turned out, another part of Plan B actually generated some more work for the company. "We had some business just starting in the northern part of the state before the storms—some installs and things that needed doing," says Nelson. "When we got organized, we moved everybody upstate and got to work. We also told all of our employees, if they knew anyone with mechanical skills, we'd put them to work, too." In the end he provided temporary jobs for 14 more people. Because these workers had lost their homes, Nelson put them into motels during the jobs he hired them for. This was at a time when many companies were just cutting people loose.

Meanwhile, down south in New Orleans, it took about six weeks before Nelson could get into his branch office to assess the damage. Much to his amazement, when he got to the office, he discovered it was bone dry while companies only two blocks away were still under eight feet of water. Nelson says he had better luck than a real disaster plan.

"We didn't have a disaster plan," he admits, "however we had been in the process of relocating the New Orleans office at about that time and had removed all the inventory, spare parts and major assets to Shreveport while we set up the new office. Luckily we had a minimal amount of stuff in the new office."

Show time!
While the opportunity may not arise for every material handling distributors, the silver screen has become a new revenue stream for Nelson. No, he's not waiting for an Emmy or an Oscar. Now, however, when he goes to the movies he hopes to see some thrilling conveyor action or maybe a romantic scene featuring a lift table he recognizes. Okay, such glimpses of equipment might not be all that exciting to people outside the material handling business. Focus on this market has, however, generated some much-needed cash at a time when other revenue streams have been running dry.

Nelson explains. "The state [of Louisiana] has offered a lot of incentives to movie and television companies to make their movies down here. So when they did, since we're basically nosey salesmen, we began snooping around to see what we might be able to learn and do."

What he learned was that the property departments of the movie companies use a lot of material handling equipment. While the Hollywood folks might not be very savvy about the technical aspects of material handling equipment, Nelson says they are able to explain what they want the equipment to do.

"We started out loaning them equipment," Nelson says with a laugh, "but quickly learned they'd rather buy the equipment. When they're done shooting, they sell the equipment at a premium price as ‘movie memorabilia.' "

Who wouldn't want a few sticks of Hytrol conveyor that Meg Ryan and Antonio Banderas leaned on in Homeland Security? Or maybe a nice lift table that Katie Holmes sat on in Mad Money. How about anything Kevin Costner touched while shooting the Coast Guard thriller, The Guardian?

Nelson says the movie business has also helped him generate a bit of cash at home as well. His son applied to be an extra in a movie, and when his wife went to sign the permission papers, she got a job as an extra, too.

Working with movie people is almost like a salesman's dream, says Nelson. "They walk around the community with a giant shopping cart looking for specific things to do a job, and they need it now. Price is not even a consideration."

He tells the story of how the folks from the Katie Holmes flick came in looking for a lift table. After using it for a while they decided that it did not have enough "presence" in the picture so they wanted something bigger. "We provided them another size and they said, as they walked out the door, ‘if this looks good we'll be back for nine or 10 more,' " Nelson says, not trying to disguise the amazement in his voice.

While the movie business has been fun, Nelson knows that there are a lot of serious things that have happened in Louisiana in the past couple of years. "When all's said and done," he says, "I think the signature of our success—say a decade from now—will be that a lot of bigger and better companies did not survive the hurricanes, and we did."

Kurt Nelson

Mark Nelson