The Snow and Ice Management Co. is mission control for battling winter
February 25, 2014 9:59 PM
Chuck Lantzman, owner of Snow and Ice Management, in his North Side warehouse.
Pam Panchak / Post-Gazette
Snow and Ice Management produces a custom blend of ice melt.
By Teresa F. Lindeman / Pittsburgh Post-Gazette
The Snow and Ice Management Co.'s operations on the North Side -- a battered building snugged up against railroad tracks -- has served as mission control this year for battling a winter not seen in the U.S. for decades.
Chuck Lantzman, president of the company that moved last year from Bridgeville, and his small staff have gone through tons of salt and mixed up tanks of brine, even as they've organized snow removal routes for more than 200 service providers in several states.
He estimates that as the winter wore on the daily phone calls numbered 50 to 100 a day, as municipalities, schools and businesses found their regular supplies of salt drying up. The emails came, too, like the one from the New York mall operator last week: "Need 50 tons of bulk road salt ..."
Mr. Lantzman is ready for the stormy, cold weather to end. "If it never snowed again this winter, I'd be happy."
But this winter will figure prominently in the sales pitches that his company -- and his competitors -- make in the off-season, trying to convince clients to sign on for services long before the first snowflakes fall.
The snow removal business is so tied to the vagaries of weather that it's barely its own industry, often tied to the landscaping work that small contractors do during the warmer months. The Snow & Ice Management Association, a trade group based in Milwaukee, estimates 20,000 companies are connected to the $3 billion private snow and ice industry.
It's a highly fragmented business, said the association's CEO, Martin B. Tirado, with 73 percent of those companies having between one and four employees. The largest four companies account for just 5.5 percent of the market.
"People kind of go in and out of the market," said Mr. Tirado.
That reflects both the ease of putting a plow on the front of a truck, and the challenge in convincing commercial clients to invest in services that they might not actually need. The warm winter of 2012, for example, didn't require a lot of plowing and salting.
For building managers trying to keep costs down, allocating a chunk of the budget to a stash of salt might not seem like a good investment. Then there's the choice between signing up with a snow removal company on a seasonal basis -- paying a fixed price for the season no matter how much or little it snows -- versus a "per push" contract in which a fee is charged each time snow removal is needed.
This has been a rough year for those with per-push contracts, noted Joe DeRugeriis, director of marketing for Planalytics, a business weather intelligence company near Philadelphia. "Companies that are paying per event are getting burned," he said. "They're paying through the roof."
Many are also paying through the roof for salt.
"There isn't a salt shortage," said Lori Roman, president of the Salt Institute, an industry group based in Alexandria, Va., in a recent statement. "Salt is in abundant supply."
But it isn't piled up where it is needed at all times, which is one reason that prices soar as supplies on hand shrink.
In October, the North Side company was selling a ton of salt for $71. Up until a month ago, the sales staff was able to sell it for $140 a ton from a stockpile in State College. Now the price to get salt in from Chesapeake, Va., is between $200 and $230 a ton.
"The freight is outrageous," said Mr. Lantzman, who has heard the howls of indignation. "I'm making the same amount of money as I did in October when I sold it for $71 a ton." He said he makes $13 a ton.
His business plan is to create a one-stop shop where he can supply whatever commercial clients need: salt, brine and snow removal services.
That includes recruiting more of those small service providers to sign on with his company, letting his staff find the commercial work, assign snow removal routes and handle the collections. Last year, the company added satellite offices in Cleveland and Philadelphia.
His staff also attends conferences like the Professional Retail Store Maintenance Association's meeting in Orlando this April to connect with potential clients. The Snow and Ice Management Association's 17th Annual Snow & Ice Symposium is coming up in Columbus, Ohio.
Mr. Lantzman also plans to go to New Orleans this summer to arrange to barge a bigger supply of salt to Pittsburgh so he'll be able to guarantee a reliable supply for contracted customers. He's got a plan to charge a small fee upfront for that guarantee, sort of a hedge against a warm winter and a commitment from clients that they won't chase better prices elsewhere.
In another balancing act, he tries to keep seasonal contracts to about 25 to 30 percent of the business. Too many seasonal contracts in a year like this one could put a snow removal company out of business, he said.
Snow and Ice Management Co. has grown this year. Mr. Lantzman said revenues were about $3 million last year, and should be about $8 million this year. Most of that growth came from expansion, but he estimated about $1 million can be credited to the snowy weather. Eventually, he'd like to get to about $15 million in annual revenue.
The immediate goal, though, is to get through the next few weeks of winter. A small hill of bulk salt inside the company's warehouse last week was, Mr. Lanztman said, a shadow of its former self. Earlier in the winter, it stood 15 feet tall.
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