In-House Service

Larry Danielle has been involved in the recycling of automobiles since 1969 but probably never more involved than in his current role as owner and president of U-Pull-It, Davie, Fla. (near Fort Lauderdale).

U-Pull-It has been growing in multiple directions since its founding in 1996, including adding more than 30 acres of land, larger annual volumes of salvaged automobiles and additional services, including the processing and shredding of scrap metal.

“The growth has been tremendous,” says Danielle, who also is willing to recount some of the challenges he has faced, the mistakes from which he has learned and the successful techniques he has developed as U-Pull-It has evolved considerably in just 16 years.

Salvage and Scrap
Danielle’s Used Auto Parts was the family business that Danielle helped run from 1969 until 1994. He describes that company as being in the “full-service” auto salvage and parts business, with a focus on late-model cars.

“I could see the consolidation taking place in the late-model sector by companies such as LKQ and also met some people from California who were involved in the self-serve parts concept,” Danielle says. “I saw with LKQ consolidating on the late-model stuff that the ‘pick and pull’ concept was the future of where things were going for entrepreneurs,” he adds.

“I started U-Pull-It with the idea of following the Pick-N-Pull concept that they use in California,” Danielle continues. “I was fortunate to meet Joe Faso, one of the founders of Pick-N-Pull. We’ve become friends, and he was kind of my mentor back then. He guided me in the right direction.” (Pick-N-Pull is now owned by steel and scrap company Schnitzer Steel Industries, Portland, Ore.)

When starting in 1996, Danielle says the self-serve used auto parts format was new to south Florida. “We had to introduce the U-Pull-It concept to Broward County,” he comments. “Our grand opening day we started with 72 customers and we started with 150 cars on seven acres,” he adds. “Traditionally, the big companies have a grand opening on their 20-to-30-acre lots with 3,000 cars.”

The concept turned out to be welcomed by south Floridians, judging by the growth U-Pull-It has enjoyed in the subsequent 16 years.

The most tangible sign of U-Pull-It’s growth is its slow and steady march from seven acres of land to its current 40 acres. “When I stated U-Pull-It on seven acres, there were five other salvage companies on this same street,” recalls Danielle. “I kept buying them up. Up through the 1960s, one woman had owned the 40 acres on this block. Over the years starting in 1969, she had sold off the entire 40 acres in 25 different parcels to probably 15 different people. Ironically, I managed to buy back the entire 40 acres from the 15 individuals.”

Among the people helping Danielle manage the business are his wife, Cathy, whom Danielle refers to as “the brains of the operation” and who overseas administrative and accounting functions; daughter April, who oversees the purchasing office; General Yard Manager Michael Floreno, who is Danielle’s son-in-law; Shredder Managers Sean Higgenbotham and Matt Hayes; Retail Sales Manager Ed Galante; and Director of Export Sales Jean Merus.

U-Pull-It’s customer traffic has blossomed from the 72 people who showed up on opening day to 25,000 to 30,000 people per month.

Now, a steady stream of obsolete automobiles makes its way onto the U-Pull-It lot each day, after which any number of things can happen to this incoming inventory.

Defferent Paths
As obsolete vehicles are delivered to U-Pull-It, most commonly by tow truck, they enter a receiving area where a decisions are made.

“A vehicle could go into what we call general population, which means it will enter the retail lot,” says Danielle. “Some are designated for export, which means we dismantle them 100 percent and send many parts overseas. And some will go directly to the shredder,” he adds, concluding, “Eventually they all go to the shredder.”

Experience is one key in making the routing decision, as is studying sales and inventory patterns. Danielle characterizes it this way: “On the retail lot, we’ve got a good idea of what sells and what doesn’t. Late model Toyotas and other cars and trucks that everybody drives go to general population. Older, bigger vehicles, like older pickup trucks, go to export. The lowliest go directly to the shredder.”

At the U-Pull-It retail yard, according to Danielle, cars “sit on the ground for 30 days; we rotate that inventory every 30 days.”

Vehicles in all three categories go through a standardized process where U-Pull-It drains the fluids for recycling and takes out the batteries, among other environmental compliance and safety steps. The gasoline drained by U-Pull-It is purified and used to fuel up its own fleet of tow trucks, Danielle says.

Preparing cars for the shredder also involves several steps, including removing high-value nonferrous items, such as aluminum wheels, wiring harnesses and aluminum motors.

This leads to the most recent change for U-Pull-It: its operation of an 80-inch auto shredding plant designed and installed by U.S. Shredder and Castings, Trussville, Ala.

A Major Investment
The auto salvage and auto shredding markets have for decades been one step away from each other, which has led to alliances, vertical integration and, at times, acrimony.

Danielle says U-Pull-It has at times enjoyed good relationships with auto shredder operators in south Florida but also has seen trouble brew on that front.

“A lot of shredder operators are now getting into the ‘you-pull-it’ business to provide their own feedstock,” he notes. “The natural progression of my growth was to gravitate into their business.”

While that national trend provided part of the impetus, so did his own local conditions and experiences, Danielle says. “We started crushing our cars and we had a good relationship with the shredders,” he comments. “I guess it got to the point where we got too big for them. We get the majority of cars in two counties. We began to run into situations where they didn’t want to pay us what we felt was the right price or provide the right level of service to us as a customer. We might have 14 or 15 loads of crushed cars per day to sell them, but they might only want to accept four or five loads, leaving us with the alternative to not crush cars or find other alternatives.”

Investing in the millions of dollars for a shredding plant and downstream system may seem risky, but Danielle says, “Necessity is the mother of invention. When you’re constantly beating your customers down price-wise, they’re going to look elsewhere.”

Danielle says he reached his decision to install a shredder in 2008 and 2009. After researching vendors in that equipment category, he selected U.S. Shredder as the shredding plants supplier and SGM Magnetics, Sarasota, Fla., as the downstream sorting equipment supplier. The entire plant and sorting system is housed indoors.

“I bought the first U.S. Shredder plant built and certainly I heard from skeptics who questioned if I’d done the right thing,” Danielle says. “But Bill Tigner [of U.S. Shredder] runs a really good company, and the fabricator, Boltech, is a phenomenal company. Granted we had some hiccups along the way, but I am nothing but happy with what Bill Tigner has done and with what SGM has done on the downstream side.”

The challenges Danielle ran into often related to zoning and permitting. “It took five years to determine that this property is in a conforming use situation [for a shredder], but ultimately we had the right piece of land and the zoning that can be impossible [for other potential shredder operators] to get.”

Danielle credits Rob and Earl Weber of Garden Street Iron & Metal, Fort Myers, Fla., for allowing him to visit and learn from that 2008 shredder installation. “We became good friends, and they really deserve some credit for helping us get where we are by providing advice and encouragement,” Danielle says of the Webers. (For a profile of Garden Street Iron & Metal, see “Built to Last” in the July 2010 issue of Recycling Today.)

Danielle chose a smaller shredding plant model for very intentional reasons, he says. “With a plant like this, you don’t have to shred 30,000 or 50,000 tons per month. I can shred from 5,000 to 10,000 tons per month of my own material (in my case) and I’m perfectly happy.”

A key reason this business model works, says Danielle, is the growth of the containerized ferrous scrap export market. “I thought in the beginning I’d have difficulty selling materials. In reality, I’ve got companies from the other side of the world buying shred from me. By being able to put shred in containers, it’s a lot easier now for me to sell 5,000 tons per month to five different parties than to try to figure out how to sell 30,000 tons in one ship. The scrap goes to small foundries in, say, India. Bigger is not better.”

Danielle sees it as a business model that is changing the industry. “You’re seeing more and more independents like me content to shred what they have and ship to one of six or eight options, often in the export market. You’re getting smaller operations strategically placed. It used to be everyone wanted to put a super-sized shredder in and draw scrap from 300 miles away. You don’t have to do that anymore. I call it boutique shredding. More and more people are gearing toward that, including the shredder makers.”

Staying Prepared
When he looks back on the hectic 16-year existence of U-Pull-It, Danielle can point to several philosophies that he says have helped the company grow.

“There are a lot of things we’ve done that we didn’t really set out to do,” he says. “We kind of pioneered recycling our own catalytic converters and we developed our own software for inventory control and point-of-sale systems for our retail operations. In my wildest dreams I never thought I’d own an auto shredder.”

Danielle, through a separate company, also operates a concrete recycling plant.

Danielle says, “There is more innovation coming on the scrap side,” possibly including bulk ocean shipping of scrap, a new way to handle auto shredder residue and the likelihood of buying additional shreddable materials.

Danielle is proud of what has been accomplished at U-Pull-it. “We’ve just worked a little harder, I guess. I can’t say enough good things about our loyal and hard-working employees. I’ve also had some help along the way, and not always from where I thought I would get it.”

He’s been part of two companies that have operated “along the same street for 43 years,” notes Danielle, who says he believes the company is well-prepared for the next owner, whoever that may be.

“It’s something we think about occasionally,” Danielle says. “I’m 62 years old, and eventually we do want to retire. What we built here, we’ve built the right way. If you do it the right way, prospective buyers will come along. If the right opportunity comes along, we’ll consider it,” he concludes. “But if not, we’ll keep doing what we’re doing.”

The author is editorial director of Recycling Today and can be contacted at btaylor@gie.net.