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You Can’t Fix Stupid — Material Handling

August 20th, 2014 Mel White 1 COMMENT
Special Handling Charges? Really!

Special Handling Charges? Really!

Rising Drayage and Material Handling Costs

If you are a fan of the comedian Ron White, you know his signature line, “You Can’t Fix Stupid.” I was reminded of this line three weeks ago while attending a material handling session by Amanda Helgemoe from NuVista and Sue Huff from Medtronic at the Red Diamond Congress in Chicago. The presentation was based on a 2013 study endorsed by the Exhibit and Event Marketers Association (E2MA) Advocacy Committee.

In short, it’s disturbing.

The presentation consists of 50 informative slides, mostly case studies between 1996 and 2007, and an analysis of rising, comparative costs. I won’t summarize the full presentation because:  a) the summary would be longer than the study, and b) You’re not stupid. You can read it and draw your own conclusions. That said . . . I strongly encourage you to devote 20-30 minutes to reviewing it. Secondly, you need to share your concerns, opinions, and solutions with industry associations and show management.

Finally, if you work directly with exhibitors regularly, you need to encourage them to speak to the associations sponsoring the trade shows. I believe, and I’m going to be a little naive here, that they don’t fully understand the ramifications of their no-cost contracts with the General Show Contractors or Show Management. Costs are rising, in particular drayage, at a rate that’s unsustainable to our industry. Whatever your political bent, the rich are getting richer, the poor are getting poorer, and the foundational middle is crumbling in the trade show industry. This tainted concentration of power is doing what power always does – corrupts.

Advocacy_2

Some Highlights:

  1. Exhibitors are downsizing or cancelling programs, not because face-to-face marketing is ineffective, but because rising costs are squeezing their exhibit budgets.
  2. Exhibitors DO NOT KNOW 30% of their final costs headed into a show. No other marketing medium has the same cost uncertainty/surprises.
  3. Don’t blame labor. I&D costs have increased, but those costs pale in comparison to exclusive services such as material handling.
  4. At one show material handling increased 307% between 1997 and 2009. And there were two recessions during this time.
  5. Show Organizers are not doing their homework. There is often a wide variance in costs between similar shows in the same city within 6 months.
  6. Here’s how crazy it’s gotten (example): Drayage: $116.70/cwt, One crate = 1100 lbs., Drayage cost = $1,283.70, Associated GSC labor cost = 37 hours ($35.00/hour), NOW HOLD YOUR BREATH – That equals 1 person, working 4 ½ days for one crate.
  7. From 2009-2013, the Consumer Price Index increased 8.2%. General Contractor Labor Costs increased 12.56%. Drayage increased 121%.
  8. Material Handling has (purposely) gotten more opaque. In some situations, there are 24 material handling categories. Opacity makes it much harder for exhibitors to challenge drayage charges or make fiscally sound decisions when scheduling freight. This is not an accident.
  9. General Service Contractors are shifting costs to exhibitors who do not use them for non-exclusive services, resulting in uneven application of exclusive service charges. All too often, exhibitors are paying the drayage for the exhibitor right next to them when the GSC shifts expenses.
  10. Growing use of bundling by GSCs by offering discounts/rebates to win the entire corporate program, such as waiving material handling if client rents from the GSC. The EDPA and E2MA have gone on record as stating this practice (bundling) is unethical and anti-competitive.


The study proposes solutions beginning on slide 44, which I strongly encourage you to review. Those include Best Practices on slide 49. On a personal note, I cannot emphasize enough how much your voice matters to trade show industry associations, such as E2MA and EDPA. Let them hear from you. In addition, if you are an exhibitor, please voice your concerns directly with the association sponsoring the show and show management. I believe that associations do not understand how existing contracts undermine their ability to grow the shows they sponsor. Show management, however, does understand the impact of rising material handling costs, but (many) have not felt enough financial pain to recommend changes.

Thank you for your time, and I hope you share my passion and concern for our industry. Collectively, I believe we can fix stupid. We have no other choice.

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–Mel White
http://www.linkedin.com/in/melmwhite
mel@classicexhibits.com

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Based in Portland, Oregon, Classic Exhibits Inc. designs and manufacturers portable, modular, and custom-hybrid exhibit solutions. Classic Exhibits products are represented by an extensive distributor network in North America and in select International markets. For more information, contact us at 866-652-2100 or www.classicexhibits.com.

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Smarter, Faster, Cheaper Solutions for your Trade Show Program

February 13th, 2012 Mel White COMMENTS

Recent Trade Show Trends

ExhibiTrends

Earlier this month, I attended a Distributor Open House where over 200 customers came to see the latest exhibit trends and services. I was fortunate to participate in a 45 minute panel session entitled Smarter, Faster, Cheaper Solutions for your Trade Show Program. I thought I’d share those trends with you. The first five (Show Floor Trends) came from an Independent Labor Contractor. The next five or so (Design and Manufacturing Trends) came from Classic Exhibits. The last five (Smarter, Strategic Behaviors) came from the Distributor.

Let me know if you would like more information. Just send me an email, and I’ll connect you with the appropriate presenter(s).

Show Floor Trends

1. The Importance of Taking Immediate Action When You Receive Your Show Manual. (In order to Maximize Discounts)

2. The Top 5 Operating Cost Budget Busters to Watch — Freight, Labor, Drayage, Rigging, and At-Show Additions.

3. Exhibitors are providing shorter lead times to display house vendors, and it’s costing you more money on the show floor. (A foot soldier’s perspective from the front lines)

4. Thirty Things on the Show Floor that Conspire to Destroy Your Beautiful Trade Show Experience.

5. Understanding General Contractors, Exhibitor-Appointed Contractors, and the Labor Unions.

Design and Manufacturing Trends

6. The New Kid in town is Hybrid Exhibits. They offer more than Traditional Portables (Banner Stands and Pop-ups) while approaching the Look and Function of Custom Exhibits.

7. Tension Fabric is the BIG Beast in graphics. Fabrics dominate the show floor with vibrant colors, lighter weight, durability and small packing.

8. Versatile Engineered Aluminum is the BACKBONE of most design centric inlines. It looks great, can be shaped, is durable, and plays well with custom wood construction or basic banner stands.

9. Customized design is no longer for the 1%. You can tailor your exhibit space with the help of extrusion, fabric, and computer aided design without a six-figure budget.

10. Packaging, Assembly, and Sustainability have come a LONG, LONG way. Most exhibits now are easy to assemble, pack smaller, and include post-industrial and post-consumer materials.

10a. Don’t forget rentals. Rentals have gotten OH SO SEXY. Take a look. You’ll be surprised how rentals have shed their MOO-MOO for Upscale Designer Wear.

Smarter, Strategic Behaviors

11. Begin to plan the show with the end in mind. Create a Trade Show Marketing Plan that includes Pre-Show, At-Show and Post-Show Marketing.

12. Establish Specific Objectives. What do you really want to get out of the show and how do you get it?

13. Technology awareness and possible sharing. Who/what synergies are available to use at the show as a resource?

14. Secure Qualified Leads that will generate sales after proper follow-up.

15. Train and Schedule Staff. Your staff needs to effectively convey your sales message and ensure the booth is staffed properly.

15a. Create a WOW Exhibit that attracts people and conveys your brand in the best light.

–Mel White
http://www.linkedin.com/in/melmwhite
mel@classicexhibits.com

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Based in Portland, Oregon, Classic Exhibits Inc. designs and manufacturers portable, modular, and custom-hybrid exhibit solutions. Classic Exhibits products are represented by an extensive distributor network in North America and in select International markets. For more information, contact us at 866-652-2100 or www.classicexhibits.com.

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First-Timer Stories: Word on the Street — July 18th thru July 22nd

July 24th, 2011 Mel White COMMENTS
First Timers

Word on the Street by Kevin Carty

Stranger in a Strange Land

Three months ago, we embarked on a new relationship with an IT vendor, and it has been nothing short of stellar. The vendor, Convergence Networks, has quickly vaulted into one of our best relationships. because they are responsive, knowledgeable, and totally customer focused.

Last month, Convergence came to Classic Exhibits asking for our assistance. They had agreed to be the main sponsor of a business-to-business event organized by the Portland Business Journal. This would be their very first trade show of any kind, which made their sponsorship commitment even scarier. Needless to say, we were delighted to guide them through the maze that is trade shows.

It proved to be an interesting experience for both Mel and me. Like many veterans of this business, we tend to forget what it must be like going to your first event. What we have all come to assume as second nature is actually totally foreign to those new to the game. Just having to traverse through all the rules, regulations and complexities that come with attending a show meant learning a new language and a new business model for them, one that doesn’t always seem transparent and logical.

Confused by Trade ShowsFor example, navigating your way through the exhibitor manual can be daunting. Recall the first time you read through that manual and attempted to complete those forms. It’s a nightmare. At one point, I asked Convergence if they knew how much electricity would be provided for their booth, which was the largest space in the show. Had we not asked, they would have had just enough juice to power a Crest Spinbrush or a cell phone charger.

Even for us, there were surprises like the move-in and move-out schedule. Except for Convergence, everyone had a 10 x 10′ (but more on that in a moment). We built them a 10 x 20 Visionary Designs Hybrid Exhibit with two computer counters along the front aisle. All packed into a small crate. You can imagine our surprise when we noticed that the move-in was limited to 5-7 p.m. and that there were no drayage services! This important fact was not shared with them when they paid for their sponsorship. Maybe show management thought that they could conjure up a display using a magical incantation and then levitate it into their show space. 🙂

Anyway, I am not beating anyone up here. In reality thanks to DWA Tradeshow Service (the general contractor) everything came together very nicely. And Convergence was the class act of the show by having a custom hybrid exhibit with tension fabric graphics, counters, lighting, and carpet. Everyone else had banner stands, posters hanging from the pipe and drape, or a pop up. They were the McMansion on a street of manufactured houses. Convergence really stood out as the title sponsor, which brought them lots of leads. The owner told me that he expects to recoup his investment many times over and put much of the credit on their “presence” at the show.

Please share your example(s) of helping a First Timer with their first trade show experience. What did they learn (or not learn) and how did those experiences influence how you assist other First Timers. I know you “old timers” have many humorous, painful, and interesting stories to pass along to the Classic Distributor Network.

Have a safe and restful weekend.

–Kevin Carty

http://twitter.com/kevin_carty
http://www.linkedin.com/pub/kevin-carty/3/800/32a

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Word on the Street — August 16th thru August 20th

August 22nd, 2010 Mel White 1 COMMENT
Why we participate in the TS2 Show

Word on the Street by Kevin Carty

Perception vs. Reality

One of my best friends travels quite a bit for his job. We often joke about who travels more, but he has me beat by quite a distance.

Approximately 30-32 weeks a year, he’s on the road, and most of his travel is to Events, Conferences, and Trade Shows. These can range from a small regional show in Alaska where he has a table top display to the industry hardware show in Chicago where he has a 20′ x 50′ island exhibit.

He asked to meet this week to talk about their up and coming trade show program and to get some advice. They go to over 35 events or shows a year.

Without identifying the company, they are the nation’s largest provider of products in their market, selling to retailers like Wal-mart, Kroger, and Target, as well as most local and regional grocery chains.

Over the past two years, their ROI has dropped significantly; yet, their sales have continued to increase. They analyzed the problem and determined that the ROI shrinkage was directly related to increases in their event/show costs. In particular, costs associated with labor, show services, and drayage.

As he puts it, “We are at the point where we must decide between continuing to participate in large shows or hold private regional events in four or five cities a year. At the regional events, we would bring our customers in and show them our products and services.”

The numbers are staggering. Their sales have increased on average of 15 percent each year since 2008; yet it isn’t keeping pace with increases in their drayage, labor, and show services expenses.

And it was stunning to see the costs related to certain venues when compared side by side. For example, they compared a large show in Chicago vs. the same show in Orlando. Trust me I know the obvious reasons why some costs were lower, but overall the show services, labor, and drayage costs were 23 percent less in Orlando. And like all exhibitors, they do not determine the venue, so they have to decide whether to attend the show in Chicago.

He asked me my opinion about switching to large, privately-hosted, regional events. I have to be honest. I found myself recommending that they do just that. It gives them the same (if not better access to their clients), and they don’t have to deal with competitors.

Now, if you’re thinking,  “What about the perception of them not being at the shows?” I agree, there is a risk there, but for some companies, such as those with a large foothold or who are the market leader, not participating may not matter.

I know certain cities and venues are trying to “fix” the costs associated with attending shows, but do they realize how much needs to be fixed? There is a perception that trade shows are too expensive, and that perception, even as the industry makes changes, will continue to linger.

How can we go about changing that perception as large cities and venues work on the reality?

Please share you comments and stories. Be well!

–Kevin Carty

http://twitter.com/kevin_carty
http://www.linkedin.com/pub/kevin-carty/3/800/32a

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What You Should Know about Exhibit Budgeting

August 7th, 2009 Mel White COMMENTS
  • How to differentiate between normal marketing expenses and exhibit marketing expenses
  • The exhibit is the largest initial expense, but your ongoing exhibit marketing will easily surpass that initial cost 
  • Create a budget and maintain an accurate Return on Investment (ROI) on your exhibit marketing
  • Include the Exhibit Costs, Onsite Expenses, and Show Services when developing your budget

An Accurate Exhibit Budget

Companies should define a workable exhibit marketing budget, one that includes all related costs. However, the line between marketing expenses and exhibit marketing expenses can be somewhat fuzzy. You will want to create a well-defined budget that separates them.  

The exhibit is typically the largest initial expense. However, over time, the cost of using the exhibit will easily surpass the initial cost of the exhibit, often significantly. When constructing a budget, evaluate your ability to maintain the expense year after year. Weigh the repercussions of scaling back. In some industries, scaling back can be more damaging than never exhibiting in the first place.  

Creating an Exhibit Budget

Creating a budget allows you to figure an accurate ROI. You should account for pre- and post-show marketing, travel costs, lodging, and entertainment. You’ll need to factor in freight, drayage, show labor, carpeting, and electricity expenses. These can be significant expenses. Most I&D companies will estimate the labor time from a faxed set-up drawing. Most freight companies can estimate the shipping charges based on dimensions and weight provided by the exhibit seller. You should also factor in minor repairs due to freight damage or repeated set-up. Generally, common sense will determine if the exhibit packing is sufficiently for repetitive use, the vibration of the road, and the pounding of the forklift during freight handling.  

Don’t forget to factor in the usable life of your exhibit and assign a cost to each show. On average, an exhibit is effective for three years. Any longer and the exhibit may be dated or worn. Any earlier and the marketing value is not realized. (more…)

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