Materials handling: The tide turns

As I’ve often written, I grew up in the materials handling industry. My Dad owned a company that manufactured and marketed wooden pallets, stretch film systems and other transport packaging products. In the summers, when other kids’ dads took them to baseball games and Disney in Orlando, my Dad took me on sales trips, visiting manufacturing plants in cities like Erie, Buffalo, Wheeling and Ft. Wayne. I saw America through the back lot of manufacturing plants in Midwestern factory towns.

The biggest test was meeting the father of a girl before a date. Inevitably, he’d ask what my Dad did and I’d say he sells pallets. That led to two questions.

What’s a pallet?

Once I answered that question, the next was: And you can make a living at that?

So, maybe I’ve had a little chip on my shoulder when I explain that I write about materials handling for a living. But two recent deals from Amazon give me, and should give everyone in our industry, a reason to smile.

The first is yesterday’s announcement that Jeff Bezos, founder of Amazon, paid $250 million for the Washington Post. Now, the Post is one of the best-known names in newspaper journalism. As a paper, it has employed some of the real stars in the industry and been at the center of some of the most important stories of our times.

Meanwhile, I’m reminded that about 18 months ago, Amazon paid $800 million for Kiva Systems, a mobile robotic materials handling and order fulfillment system that had perhaps $100 million in sales at the time of the sale, as estimated by news organizations.

Who would have thought that a company providing order fulfillment solutions to warehouses with limited revenues would sell for more than 3 times that of one of the best-known names in journalism?

It demonstrates how important materials handling and logistics is to business today.