Milwaukee was once known as “The Machine Tool Shop of the World” because of its strong industrial output. Companies such as Falk, A.O. Smith, Briggs & Stratton and Allis Chalmers were symbolic of the region’s robust factory capacity that exported products throughout the world.
Although Wisconsin’s manufacturing economy was severely culled by the Great Recession, much of the state’s industrial capacity has returned, and Milwaukee companies are spearheading the recovery.
For the 12-month period that ended on Feb. 28, U.S. manufacturers exported $1.88 trillion worth of goods, a 19.5-percent increase over the total that was exported during 2009. Over that same 12-month period that ended on Feb. 28, the country’s export rate increased at 16.5 percent, which exceeds the 15-percent monthly growth rate needed to double the country’s exports by the end of 2014.
“The steady growth in exports keeps the United States on track to meet President Obama’s goal of doubling exports and supporting 2 million American jobs in 2015,” said Fred Hochberg, chairman and president of the Ex-Im Bank.
Wisconsin, as one of the largest manufacturing states in the country, is playing a significant role in the national growth in exporting. According to the state Department of Commerce, Wisconsin’s exports increased 18.3 percent in 2010 to $19.8 billion.
In 2008, Wisconsin hit record volumes in exporting, when state companies sent $20.6 billion in goods to international buyers, said Mary Regel, director of the Wisconsin Department of Commerce Bureau of Export Development. Through the first two months of this year, the export numbers for the state are encouraging.
“For the first two months of the year, we were up 12.6 percent from the same two months from last year,” Regel said. “We don’t speculate, but the way things are going now it looks like we’re set to at least match 2008.”
Peter Beitzel, vice president of infrastructure and international business with the Metropolitan Milwaukee Association of Commerce, said the southeastern corner of the state is particularly poised to benefit from rising export activity.
“Milwaukee is well-positioned. We never lost our manufacturing base and (international demand) is coming back,” Beitzel said. “Appetite for U.S. products is increasing, and there is a respect for the quality of U.S.-made goods.”
Milwaukee Mayor Tom Barrett said the increases in export activity have boosted activity at the Port of Milwaukee.
“We’re seeing a strong rebound in port activity,” he said. “Exports through the Port of Milwaukee have increased 119 percent since the 2008 recession. Milwaukee’s manufacturers and agricultural producers have been able to sell their products worldwide with the great location and transportation connections the city has to offer.”
Milwaukee-area companies that export goods to other markets ultimately create wealth in the region, according to MMAC president Tim Sheehy, who often says many of the other local service companies are “washing each other’s socks.”
As demand for Milwaukee-made goods has increased around the world, companies that package, ship and track export orders also have experienced a rising tide.
Bentley World Packaging Ltd., a Milwaukee-based provider of export and military packaging and distribution services, has averaged 15-percent annual growth over the last 10 years and is showing no signs of slowing down.
The company, which has about 600 employees in 16 facilities in eight markets, packages goods for some of the Milwaukee metro area’s largest industrial companies that play in the export field – companies such as Bucyrus International Inc., Joy Global Inc., Kohler, Case New Holland and many more.
“We have about 500 clients, the majority of which are Fortune 500 companies,” said Thomas Bentley III, chief executive officer of the company.
Military packaging has become a significant focus for Bentley World Packaging, and the firm routinely packages goods made by companies such as Oshkosh Corp., Astronautics Corp. of America, DRS and others.
Exports have been boosted by the weak value of the U.S. dollar, the increasing appetite for quality industrial goods by emerging markets and aggressive export programs from the state of Wisconsin and federal officials, said Louie Busalacchi, Bentley’s national sales manager.
“The dollar has a benefit to manufacturers,” he said. “Commercial exports are growing. We have a far more upbeat customer base. Our pipelines have begun to fill up that we didn’t have a year ago. And with commodity prices (rising), many companies are more apt to invest in equipment.”
Companies that make food processing, farming, water and energy-related equipment have seen the most significant export-related increases, Bentley said.
“The world economy is starting to pick up, and places like China and Brazil are going too fast to keep up,” he said. “They have very special needs for food processing equipment, farming equipment.”
Federal and state programs that have helped to expose manufacturers to export opportunities and connect them with international customers also have played a significant role in the growth of Bentley World Packaging and other export-related companies, Bentley said.
“With the trade issue (on the federal level), the pumping of exports and the trade missions to balance the trade deficits, everyone will be on the same page. I’ve never seen (the country) so aligned on an issue,” Bentley said.
Bentley World Packaging has expanded its geographical presence significantly over the past several years. In 2009, the company opened a packaging and distribution center in Baltimore, Md. In 2010, it opened a similar facility in Charleston, S.C., to take advantage of a new deep water port there.
“The Panama Canal widening will be done in (2014),” Bentley said. “That port (in Charleston) will explode in Asian imports because they’ll be able to unload crates for customers in the Midwest there. That’s an enormous reason to go into Charleston. We wanted to be there and well-established when that growth happens.”
Bentley World Packaging is preparing to enter the metropolitan Cincinnati area later this year and is likely to establish a presence in Texas late this year or in 2012, Bentley said. The company also may look for opportunities near Manastee, Fla., in the next few years, he said.
Bentley World Packaging almost always enters new markets by purchasing an existing packaging company.
“It’s nice to have a nucleus and a good group (of employees when you enter a new market),” Bentley said. “We always try for an acquisition when we can.”
Geographic expansion has played a key role in Bentley World Packaging’s growth, as well as increasingly complex rules regarding shipments to different countries, said Todd Bentley, chief financial officer and Thomas Bentley’s son.
“A lot of the growth has come from the additional complications of international packaging and shipping,” Todd Bentley said. “Every few years, there are new requirements for heat-treated lumber (and other packaging-related items), and the complications and complexity of it all leads more companies to rely on experts instead of trying to do it themselves.”
Both Thomas and Todd Bentley said export activity will continue to pick up steam in coming years because of the lower value of the U.S. dollar on the global stage and the continuing demand from developing countries.
“We want to see an exporting boom,” Thomas Bentley said. “It’s not just good for our company. It’s good for the trade deficit. This is a business you can get passionate about and you can be patriotic about.”
“Every time you ship something internationally, you’re bringing capital back into our community,” Todd Bentley said. “Wealth and the standard of living, to grow those things, you need to sell more outside of your community than you bring stuff in. For every item you package, ship or provide freight forwarding to, you’re generating outside dollars into our community.”
M.E. Dey & Co.
Milwaukee-based M.E. Dey & Co., an international freight forwarder that routinely tracks shipments made by Milwaukee-area manufacturers that are shipped to customers around the world, also is seeing significant growth due to the rise in exports.
The company’s sales rose 26 percent in 2010 to record levels. It is expecting an approximate 10 percent growth rate this year, said Rob Gardenier, president.
M.E. Dey’s headquarters and main office is in Milwaukee, where it has 43 employees. The company also runs an eight-person office in Chicago and smaller offices in Atlanta and Guadalajara, Mexico.
The company has seen a rise in export-related activity in recent months, as more companies seem to be exploring new opportunities around the globe, said Leann Boyea, export manager.
“We’re seeing quote requests from companies that we didn’t expect to, who want to see what we can do for them,” she said. “We’ve seen a lot of names we haven’t seen before, and from all over.”
M.E. Dey’s customers are exporting a diverse range of products today – from heavy industrial goods to water technology to food products.
“We’re doing a lot of ag (agricultural products),” Boyea said. “That’s one of the areas Wisconsin is trying to push its exports.”
The company has recently handled cranberry, cheese, sausage and potato exports to destinations such as Russia, Poland, and the Middle East.
The United States’ two largest export markets are still Canada and Mexico, and M.E. Dey’s customers have been sending a large amount of goods to both countries, said Sandi Siegel, executive vice president. New security requirements in Canada are creating new challenges and opportunities for freight forwarders like M.E. Dey, she said.
“On the Canadian desk, we’ll have one or two new positions,” Siegel said. “We’re doing a lot more compliance work with our clients, consulting and putting on classes. That’s been a growth industry for us.”
Aim Transfer & Storage
Import and export-related activity has fueled the growth of Oak-Creek’s Aim Transfer & Storage Inc., an intermodal freight forwarding company.
Aim Transfer & Storage operates a 125,000-square-foot transfer and warehouse facility in Oak Creek, where it also has 12 acres for truck parking. The company also has a five-acre facility in Milwaukee that it uses for cross docking. It also houses its truck maintenance division there.
The company has 135 employees, and about 60 over-the-road contract drivers.
During the last several years, importing activity has played a larger role in the growth of Aim Transfer, but exports have gained steam this year, said Chris Winkler, president.
“Imports are coming in, and we have great demand for exports going out,” he said. “A lot of grain is being moved out of here. We’re doing a lot in Chicago. A a lot of boxes are being moved right out of there.”
Winkler’s drivers are moving in and out of Chicago’s rail yards about 100 times per day, he estimated. The company usually moves 350 to 400 international containers in and out of Chicago on a daily basis.
Winkler, who has developed a close working relationship with the Port of Milwaukee over his more than 20-year career, is now encouraging his clients to take advantage of some of the changes the port has made, which in turn could give them savings on some shipping costs.
“The problem with Chicago, as a trucking company, is that it’s hard to haul out of there into Wisconsin because we have so many challenges with laws and DOT regulations,” he said. “We want to work with the Port of Milwaukee to create more business and more jobs in our city. We go to Chicago, we pay all those tolls. Forget about giving those guys $80 on a round trip for tolls. Let’s keep that money in our town.”
Because it is a smaller operation with a local connection, the Port of Milwaukee is better suited to serve local shipments, Winkler said, while still giving easy access to rail, water and over-the-road transportation.
“At the port (of Milwaukee), they know my guys on a first-name basis and they get them in and out in 15 minutes,” he said. “If we have a problem, the crane operators are on the phone with my guys. The Port of Milwaukee is a blessing to have in town. People need to recognize what they can do for this community. It’s an operation and a half that we’re not taking advantage of.”