Metals warehouses look to season, economy

CEDAR RAPIDS — Patrick Tulley, vice president of Liebovich Steel and Aluminum Co. in Cedar Rapids, describes metals distribution warehouses such as his as 'grocery stores for steel.'

These distributors are the second step in the metal supply line and work with businesses small and large. Mike Levy of Mose Levy Co Inc. described the typical customer base as manufacturers, contractors and some retailers.

Distributors purchase their material in large quantities from mills, which tend to specialize in specific kinds and cuts of metal. From tubing to rods and sheet metal, distributors bring everything under one big roof.

The average client doesn't usually purchase directly from the mills — where distributors obtain their metal — because the mills generally only sell in bulk. Buying through a distributor means being able to purchase smaller quantities of metal and from a greater variety of options.

Levy explained that he decides what to stock based on a combination of experience, time of the year and strength of the economy.

Concrete isn't poured as often in the winter, creating less demand for reinforcement rods, for example. But tubing items are typically purchased year-round for indoor work.

As you might imagine, metal inventory takes up a lot of space. Mose Levy, a small, independent company in Washington with eight employees, has two warehouses that total some 45,000 square feet.

Liebovich, a larger company with around 80 employees in Cedar Rapids alone, boasts 120,000 square feet of warehouse space that can house more than 30,000 tons of metal.

Within the warehouses, metal is moved around by overhead cranes or large forklifts.

Brian Loney, Intertrade Steel president, described this environment as his childhood playground. The company was started more 40 years ago by his father, Gary T. Loney, with just a farmhouse and a telephone.

Just as computers and scanning capabilities have made the business more efficient, the tools for cutting metal have grown more precise, helping to accommodate increasingly specific demands of consumers.

Intertrade continued to expand its business to keep up with these types of customers.

'We are a service industry,' Loney said.

Product is transported by truck from the mills to the warehouses and then out again to customers. Liebovich Steel is located in southwest Cedar Rapids with access to the interstate for inbound and outbound trucks.

'For some companies, there is thought put into being strategically close to interstate and rail, but that is not always the case,' Tulley said.

'Many service centers years ago started in the scrap business and overtime grew into what they are today,' he said, explaining that some practices began small and grew too large to relocate in a cost-effective manner.

Transportation costs may have an effect on from where distributors get their product and how large an area they are able to service. Many Iowa distributors sell strictly to other states in the Midwest.

'You try to get things in certain areas because it only travels so far efficiently,' Tulley said.

Some distributors also provide add-on work for customers with more specific needs. Also referred to as first-stage value added, these services often include saw, flame or plasma cutting metal to customer-specified lengths.

The purpose of add-on work is to get material closer to the overall end product needed by a customer before it leaves the warehouse, Loney explained.