western pallet
TRANSCRIPT
Western Magazine for WPA Members December 2018 MagazinePallet
Trucking TrendsBrexit Implications for PalletsCountdown to the WPA Annual MeetingPooling Partners Branding Strategy
Above: WPA member Pallet Consultants recently presented this newtrailer at a corporate retreat. It will be used in Central Florida.
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WPA EXECUTIVE
DIRECTORS
Sukhi BrarBaxter GladdenScott GutierrezRod LucasSteve MazzaRalph Rupert ASSOCIATE DIRECTORS
Ryan GreenwoodTod KintzDerek SampsonJason Saunders Please direct inquiries about the WPA toDavid Sweitzer, Executive Vice-PresidentP.O. Box 1095, Camas, WA 98607Ph. 360 335-0208Email:[email protected]:www.westernpallet.org
www.westernpallet.org
W P A M A G A Z I N E
PresidentVice-PresidentSecretary/TreasurerPast PresidentExecutive VP
Lindsey Shean-SnowdenAnnie MonteyBeatrice VasquezDave UppalDave Sweitzer
WesternPallet
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WPA New Members
The WPA is proud to introduce itslatest new members.
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Northwest HardwoodsNorthwest Hardwoods has namedNathan Jeppson as Chief ExecutiveOfficer and Chairman effectiveJanuary 7, 2019.
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North American SoftwoodPrices
Softwood prices listed as ofNovember 20, courtesy of NRCAN.
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Rancho Then & Now
Rancho Las Palmas, the site of theWPA Annual Meeting, has acelebrity studded history.
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Membership DriveThis year's membership drive isalready in motion.
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DECEMBER 2018
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Cover Story:
Trucking Trends
21
Other Features
26 Branding Strategy: One or Many?
27 Contraload Introduces New IBC to European Pooling Market
28 Impact of Brexit on Timber Packaging and Pallets
30 France: Collaborative Online Pallet Management Platform
31 Upcoming Events
Advance LumberCorali - USAGo Fast ManufacturingGT PalletJacob A. Weaver CompanyNorth American Forest ProductsNorthwest Hardwoods
Pallet Machinery GroupPLIBPRSTimber Products InspectionViking Engineering & DevelopmentWood-Mizer
Western Pallet Advertising Sponsors
North American Softwood Prices Weekly softwood lumber prices to December 11, 2018 are shown below,sourced at http://www.nrcan.gc.ca/forests/industry/13309.
WPA New Members The Western Pallet Association is pleased to introduce the following newmembers:
Magali MelchorM&J Pallet Recycling Inc.12152 East End AvenueChino, CA 91710Ph: (909)591-0891Fax: (909)591-4738www.mjpalletrecycling.comE: [email protected]: Norm Normile, NW Norm
Frank TritzTritz Pallet, Inc.PO Box 6LeMars, IA 51031Ph: (712)546-4319www.tritzpalletinc.comE: [email protected]: Rick Ziebel, J&B Pallet
Madison's Weekly Softwood LumberMovers and Shakers. Click on graph for
expanded view.
DECEMBER 2018
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Rancho Las Palmas Then and Now
Hollywood stars, heads of state and tourists alikedescended on the Palm Springs area back in the1950s to stay at the storied Desert Air Hotel &Resort. Visionary Los Angeles architect H.L.“Hank” Gogerty had transformed 320 acres ofbarren desert into an ideal sanctuary, completewith a private airstrip. By day, resort guestssplashed around in the sparkling pool and playedpolo on a nearby field while staying in surplusarmy barracks. When night came, the spiritedCompass Room restaurant and bar was the placeto see and be seen. The celebrity-laden crowdenjoyed a lively ambiance, strong cocktails andelegant cuisine. “The Bob Cummings Show,” a popular sitcomfrom 1955 to 1959, used the popular desert
hangout as its backdrop. Rumors suggest thedebonair actor piloted his unique Aerocaraccompanied by such leading ladies as MarilynMonroe and Lana Turner. In the late 1970s, Desert Air made way for today’sluxurious Omni Rancho Las Palmas Resort & Spa.Cary Grant, Roy Rogers, Dale Evans and Bob Hopeall appeared at the resort’s 1977 groundbreaking. From its Rat Pack era beginnings to astunning 21st-century renaissance, Rancho LasPalmas remains a timeless classic for today’sdiscerning traveler. (Source: RLP)
Like the Western Pallet Association, the Rancho is a legacy brand that has reinvented itself andremained relevant, while staying true to its roots. It remains a top resort destination in the desert.Rancho Las Palmas hosts the WPA Annual Meeting, January 18 - 22, 2019 in Rancho Mirage,California. Contemporary view of RLP at bottom right.
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Northwest Hardwoods, Inc. NamesNathan Jeppson as CEO / Chairman of
the BoardNorthwest Hardwoods Inc. (NWH) has namedNathan Jeppson as Chief Executive Officer andChairman effective January 7, 2019, and willreport directly to the Board of Directors of NWH.TJ Rosengarth will remain on the board of NWHto ensure a smooth transition for the business. Nathan brings significant leadership experienceto NWH, most recently serving as President ofShell Chemical LP and General Manager of amulti-billion-dollar division of Shell withleadership positions in a broad range of basicand intermediate chemicals. Previously, Nathanled Shell’s synthetic alcohol and ethoxylates(surfactants) business. Prior to Shell, Nathan waspromoted rapidly through the Dow ChemicalCompany and served in a variety of significantleadership positions across markets in NorthAmerica, China, the Middle East, South East Asia,and Europe. Nathan’s strong general managementcapabilities are underpinned by significantsuccesses across several businesses in designingand implementing business improvementinitiatives, accelerating product innovationcapabilities and developing top-levelcommercial talent. He has a demonstrated trackrecord of shifting commodity-orientedbusinesses to strategic marketing-ledorganizations focused on innovation andcollaboration with customers globally. “We are excited to have Nathan Jeppson joinNWH as its CEO and for him to provide leadershipto the number one global manufacturer ofhardwood lumber,” said Edmund Feeley, a NWHboard director and partner at Littlejohn & Co.“Nathan’s track record of success has beendriven by his ability to develop and implement
innovative strategies for a range of complexbusinesses. He has remarkable business acumen,particularly in commercial areas includingproduct innovation, customer development, andindustrial marketing strategy and we areconfident he will be a great complement to theNWH team.” Nathan has served as a director of HoustonHabitat for Humanity and a mentor in JuniorAchievement’s Junior Business program. Nathanand his family will be relocating near NWH'scorporate headquarters in Tacoma, WA. TJ Rosengarth will be pursuing otheropportunities outside the hardwood lumberindustry. Mr. Feeley added, “On behalf of theboard, I would like to thank TJ for hiscontributions toward making NWH the clearglobal leader in hardwood lumber over the lasteight years and wish him all the best in his futureendeavors.” About Northwest HardwoodsNorthwest Hardwoods, Inc. has approximately1,800 employees and is the leadingmanufacturer of high-quality hardwood lumberin North America. It manufactures and sells20 species of North American hardwood lumber,including Alder, Oak, Maple, Cherry, YellowPoplar, and Walnut. Operations include a network of sixteen primarysawmills, eight concentration yards, fourremanufacturing service centers, and regionalwarehouse locations. For more information,please visit www.northwesthardwoods.com orcall 253-348-2732.
New West Coast Cut Stock Producer
Will be offering quality cutstock direct from the mill.Shipping via rail ortruckload.
Contact Jacob WeaverPhone: 406.266.4840Fax: 406.266.4800
Weaver Wood LLC111 MontanaHighway 285Toston, MT 59643
The WPA Golf Tournament will takeplace at the Rancho Las PalmasCountry Club (below) on January 21,2019.
DECEMBER 2018
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Chamber of Commerce FoundationFeatures CHEP Circular Economy
Messaging A case study report published by the U.S.Chamber of Commerce Foundation offersinsights into how to effectively communicateabout the circular economy from a variety ofperspectives—including business, academia,communications firms, trade associations, andnonprofits. “Messaging the Circular Economy” includesinput from a number of leading organizations,including Brambles and CHEP, Best Buy, IKEA, TheWharton School, Loyola University, and theWorld Business Council for SustainableDevelopment.
SuzanneLindsay-Walker,director ofsustainability forNorth America,Brambles Wood pallet suppliers have their own compellingcircular economy stories to tell. Get insights fromthe case study here.
DECEMBER 2018
Transportation Trends
Look for continued transportation cost andavailability pressure in 2019, report experts.According to Lou Smyrlis, Newcom Trucking &Supply Chain Group, transportation volumegrowth will continue, especially in the first halfof 2019. U.S. GDP is anticipated to grow by 2.4%for the year versus 2.8% in 2018. Growth will betempered by ongoing international tradeuncertainties and other geopolitical impacts. “Total economic demand, especially in theindustrial economy, is still growing, but not atthe same frenetic pace we saw in the first half of2018,” Donald Broughton of Broughton Capitalwrote recently. November Spotlight Spot market freight volume and rates slid inNovember for most equipment types. Accordingto the DAT Freight Index, November volume was
2.5% lower month over month and 24% percentunder last year’s extraordinary seasonal mark. Freight rates remained stable for vans whileflatbed rates slipped 7 cents lower for the month,in a typical seasonal pattern. Reefer cargo bucked trends by reboundingbefore Thanksgiving with an 8% increase inavailability and a 2.5% bump in the average per-mile spot rate from October. “Spot market volumes and rates are likely to risethrough December, as e-commerce deliveriescontinue to ramp up,” said DAT market analystPeggy Dorf. “Retailers are offering nearlyunlimited free shipping to online customersduring the holiday season, boosting orders andadding to pressure on freight transportation andlogistics.”
Slides are from the Lou Smyrlis Transportation Buying Trends presentation at the CanadianLogistics Conference 2018.
DECEMBER 2018
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ONLY 1 TABLE LEFT!
Capacity is slowly increasing Capacity is gradually improving as small fleetsbecome adjusted to electronic logging device(ELD) requirements and Hours of Service rules.The introduction of ELD requirementsreportedly resulted in some older driversleaving the industry rather than conforming tothe changes. Driver recruitment has been aidedby driver pay increases, although driverturnover remains high, especially for largerfleets. The average U.S. truckdriver is 49 years old,seven years older than the overall averageworker age. The average salary is about $70,000,and there is a shortfall of about 63,000 driversacross the country. And of the hundreds ofthousands of trucking jobs created in recentyears, a large majority of them--at greater thana two to one ratio--are in fleets of 100 or fewertrucks. Most are aligning with fleets of six trucksor less.
“I’ve been talking about the driver shortage foralmost 30 years,” Smyrlis said recently at theCanadian Logistics Conference in Vancouver BC.“One of the very first stories I ever wrote wasabout the driver shortage. After 30 years I thinkwe can be confident in saying that we are notgoing to solve it, at least not in the way we havebeen trying to solve it.” He questions whether we are putting ourrecruitment efforts in the right areas. In Canada,32.5% of drivers are recent immigrants, withpeople of South Asian descent dominating thatsector. Effectiveness in reaching out to thispopulation would be aided by utilizing Punjabior Hindi language platforms. Smyrlis also pointed out the gender inequity ofthe driver base. “97% of truck drivers are male.Yet 49% of the working population is female.Does it make sense to continue on a path wherewe don’t consider half the population (as part ofthe job candidate pool)? Can we really say we
Spot market rates declined in November for dry van and flatbed equipment, while rates rose forrefrigerated van trailers in advance of Thanksgiving, according to DAT Solutions, which maintains arates database of $57 billion in annual market transactions.
DECEMBER 2018
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have a driver shortage when we don’t evenattract half of the working population?” Capacity is also being helped by the influx ofnew truck investment. New trucks have greateruptime, which can translate into 4% greateravailability for service. Smyrlis cautioned,however, that new equipment investment isn’tso much to expand the fleet size but to retireolder equipment. “Around 75% of Canadian trucking executivesare saying they are ordering new equipment for2019 but it is replacing aging equipment in theirfleet,” he commented. “In fact, if you look at thesize of major fleets in the U.S., they are actuallyshrinking. They are getting smaller. The smallerU.S. fleets are getting larger, but they still don’thave the capacity to counterbalance what thelarge guys have (lost).” And in spite of cost and availability pressures,
the issue of truck detention remains a significantissue. According to survey results, only 16% saidthey would always collect a truck detention fee.Another 42% said they would rarely collect adetention fee if their trucks were held up andalmost a quarter said ‘never.’ “It is pretty sobering that they (carriers) have toabsorb those kinds of inefficiencies to theirsystem,” Smyrlis said. “Even more concerningwas the fact that they were not only absorbingthat kind of inefficiency, but they were also doingabsolutely nothing about it.” Truck Tech Change While Smyrlis hears a lot of skepticism about newtechnologies such as platooning (the linking oftwo or more trucks in convoy, using connectivitytechnology and automated driving supportsystems), driverless trucks and others
While trucks are frequently detained by shippers, over 65% of carriers rarely or never collectdetention fees.
Watch for new technologies such as Advanced Driver Assistance Systems (ADAS), platooning andeventually, driverless vehicles.
he cautions that some technologies in the recentpast that were viewed with pessimism--such assatellite truck tracking, still ended up beingadopted much more quickly than many wouldhave thought. “I think automation will come sooner than wethink,” Smyrlis said about transport technologyadoption. “Because when we look at investment,and the increase in profitability that automationbrings, we see some pretty high numbers. Allthat it takes is for one or two carriers to give it atry, and if they get a significant advantage, andthen you see it catching on.” Many experts predict that autonomous drivingfeatures that improve driver safety willincreasingly be adopted, even though thecommercial usage of autonomous vehicles maybe years away. Electric trucks are expected to besoon available for heavy-duty trucking, but only
for short hauls. Eric Fuller, president and CEO ofU.S. Xpress, reported in one article that electric-powered trucks are “not ready to go that 500miles we really need,” but that could happen infive to 10 years. One of the big changes in transportation will bein the area of data analysis. Data from ELDs willhelp transport providers identify patterns ofdelays, slow routes and other inefficiencies. “ELDs, they’re a very rich data source,” DeanCroke, chief insight officer of FreightWaves, toldAllTruckJobs.com. “If you said what was going tobe the one big trend next year with ELDs, beyondthe need to be compliant with the regulationsfor the old devices, I think it will be a lot of thepeople that have these devices will find ways togenerate more insight from the data that comesoff them. I think that’s going to be the big changenext year.”
DECEMBER 2018
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As companies grow, the are faced with brandingdecisions. Should they stick with a universalbrand, or should they have specific brands thatare uniquely connected to particular operationsor segments? Faber Halbertsma Group, which inrecent years presented a universal brandpresence through Pooling Partners, recentlyannounced that it is plotting a shift in direction. "We are going back to the old company names:IPP, PAKi, PRS and individual productioncompanies," reports the Poolingpartners.comwebsite. "This means that the name, PoolingPartners, will be replaced by the names by whichthe individual companies used to be known intheir own markets." According to the company, it sees moreopportunity for each Faber Halbertsma Groupcompany to position itself using a distinct brandlabel, with a common look and feel to retain thesolid back-up of the Faber Halbertsma Group. "The rebranding is an investment in our futurebusiness and serves to build a strong platformto allow our businesses to thrive," it continues. There are a lot of things to consider whenconsidering an approach to branding. RobertWallace of Scottsdale AZ-based Tallwave writesthat if "you offer multiple products or servicesthat appeal to distinctly different audiences, somuch so that a given customer likely wouldn’teven consider buying one product but would bevery interested in another, then the individualbrand approach might be more fitting." For example, a pallet recycling company that isgoing to launch a retail wood pellet operationmight not choose to create a completely newbrand, as the target audience probably has hadlittle or no understanding of the pallet company's
reputation. If the pallet recycler decides to launcha new pallet business due to a core shortage thatis causing pain for its existing customers,however, it might make more sense to stick withits existing brand. Some companies use a "masterbrand" and sub-brand approach. Whatever the branding strategyemployed, however, Wallace cautions that "it isimportant to ensure you carry the same visionand values through each of your separateofferings." Faber Halbertsma Group states that the usage ofthe new brand names will begin to startimmediately. By the end of March 2019, all thecompanies will use their new name. The new brand names will be in most cases similarto those heritage brands used by the individualbusinesses prior to the introduction of PoolingPartners. The list of brand names includes: FABER HALBERTSMA GROUPIPPPAKiPRSFABERFRANCEPALNAUSPASECPACKAGING PARTNERSPHOENIXSATIMT&A
One Brand or ManyDo you have various regional operations or serve different product markets? With theannouncement of Pooling Partners rebrand, it is useful to consider whether to have one brand ormany. What's the best way forward for your business?
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Contraload Launches New, IndustryLeading IBC to European Pooling
Market
Contraload (www.contraload.com), theEuropean market leader in plastic pallet pooling,has announced the latest addition to its liquidcontainer pooling range – Superior. Productionbegan in November and Contraload is nowoffering these new state-of-the-art liquid bins tocurrent and new clients. Superior is the most hygienic and safe reusableIBCs on the market, ideal for high-value liquidsas well as ingredients logistics. Its 70% foldingratio and easy stacking features will allow 182empty bins to be transported in a standardEuropean truck. It is water and dirt proof with a100% safe, easy-to-clean design from base tolid make this bin ideal for pooling. The double wall structure provides anexceptional strength and durable performancewith a 1500kg unit load. Its standard 1200X1000footprint in conjunction with 1000L capacity andrackability, make the bin usable for all companiesin Europe.
Contraload has chosen not to offer its customersa wide variety of liners, glands, and valves.Instead, it offers expert advice on both filling andemptying, and simply supports its customers inbuying directly from the liner producer. “To getthe right liner in the Superior, we are partneringwith a selection of liner producers in differentcountries, making sure customers get the bestbag for the job. They can buy directly from theproducer and keep prices low,” says Ebo DeMuinck, Product Manager Liquids at Contraloadwith over 20 years of experience in liquids. “The new Superior is the best fluid bin available,and we are pleased to be able to offer it for poolingto Contraload clients, enabling them to enjoy itsindustry-leading benefits without need ofpurchase,” states Jesse Sels, MD of Contraload.“This bin, in conjunction with our industry-leading pooling system, provides a best-in-classsolution for industries such as food processing,ingredients, cosmetics and pharmaceutical. It issimply “Superior”.”
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CJ SHEERAN has for months been raisingawareness on the vast impact a 'No Deal Brexit'will have on every business in Ireland thatexports to and imports from or via the UK usingwooden packaging and pallets. The UKGovernment has taken note of the widespreadscope of this potential upheaval with the recentpublication by DEFRA (Department ofEnvironment, Food and Rural Affairs) of a set ofTechnical Notes on the impact of a 'No DealBrexit' and their Guidance Note entitled"Importing and exporting plants and plantproducts if there's no Brexit deal". On March 29, 2019, the UK will become a ThirdCountry. The EU requires that all imports fromthird countries that have wooden packagingmaterial (WPM) must conform to therequirements of ISPM15 - the InternationalStandard for Phytosanitary Materials. This is aninternational standard under the InternationalPlant Protection Convention that countries mustapply to reduce the risk of the introduction andspread of certain pests. ISPM15 requires WPMto be treated (typically using heat-treatment)and marked. WPM includes pallets, cases, crates,boxes, cable drums, spools and dunnage. As indicated in the EU's technical notice on thetopic, in the event of no deal, all WPM movingbetween the EU and the UK would need to beISPM15 compliant. "This will impact allbusinesses in Ireland that use timber packagingand pallets for imports from and exports to theUK and also those using the UK as a landbridgeto the continent", says Ashleigh Doyle,Compliance Director at CJS. "The seriousness ofthis issue cannot be underestimated". On theimport front, 850,000 trailers and containerscome into Dublin Port every year from the UK.
With the vast majority of their contentspalletized, this means that in the event of a nodeal Brexit, all of these pallets will have to beheat-treated in compliance with ISPM15. If theyare not, they cannot be permitted to enter Ireland.The same applies to exports. CJ Sheeran's Directors have recently met withthe Department of Agriculture, Food and theMarine (DAFM) to discuss ISPM15 and Brexit andto outline the urgency of the need to ensure thateveryone is prepared for all eventualities and tokeep customers and the industry up-to-date ondevelopments. With the recent installation ofadditional kilns, CJS have significantly increasedISPM15 heat-treatment and kiln drying capacityto what is now the largest capacity in Ireland andthe UK. "They said Brexit wouldn't happen, theysaid Trump wouldn't get elected, they said SlieveBloom wouldn't win the hurling county final - butthey all did", says Mark Sheeran, MD of CJS. "We'reready".
Impact of Brexit on Timber Packaging& Pallets
Leading Irish pallet producer discusses the pallet impact of a "No Deal Brexit"(Reprinted with permission from the CJ SHEERAN newsletter)
[Pictured above: Fergal Moran CJS, Seamus Dunne Forestry Inspectorate Senior Inspector, MarkSheeran CJS, Ashleigh Doyle CJS, Colm Hayes DAFM Assistant Secretary General and Tom McDonaldForestry Inspectorate Regional Inspector]. Below: CJS now has the largest pallet HT capability inIreleand and the UK.
DECEMBER 2018
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France: Collaborative Online PalletManagement Platform Looks to
Eliminate the Inefficiencies of EmptyPallet Transport
A new collaborative online pallet managementplatform, MagicPallet, was officially launchedthis month in France. Described as the firstcollaborative platform dedicated to theexchange of European pallets, the launch followsa one-month pilot phase that involved 15companies. MagicPallet offers the potential toeliminate the inefficiencies of empty palletreturns associated with pallet exchange. Pallet exchange impacts 38,000 carriers inFrance and 600,000 in Europe. The cost of palletreturns in France is 100 million € per year. “Untilnow, the principle was that carriers traveled longdistances with empty pallets to bring them backto their customers, the shippers – for example,for an SME of 200 trucks, the cost of pallet returnsis about 200 k € per year,” stated Pierre-EdouardRobert, the founder of MagicPallet. “As far as theshippers are concerned, the pallets were notalways returned on time by the carriers, theybought them urgently and at a high price.” MagicPallet is now available throughout France.The company plans to expand across Europe ata rate of two countries annually. It will start inGermany and Spain in the second half of 2019,followed by Italy, the United Kingdom, theNetherlands, and Poland.
The business is projecting a turnover of 650 k €at the end of 2019 and 3.8 M € by Year 3, withemployment to increase to 12 people by the endof 2019, and 40 within three years. The platform stands in contrast to proprietarypallet banking schemes offered by palletcompanies in Europe such as PGS and PoolingPartners.
Upcoming Events 1/18/2019 - 1/22/2019 WPA Annual Meeting, Rancho Mirage, Californiawww.westernpallet.org 3/13/2019 - 3/15/2019 NWPCA Annual Leadership Conference,San Diego, California. www.palletcentral.com 3/28/2019 - 3/29/2019 INDUSTRIAL PACK, Atlanta, Georgia.INDUSTRIALPACK2019 5/8/2019 - 5/9/2019, Global Softwood Log & Lumber Conference,Vancouver, BC. www.woodmarkets.com 5/27/2019 - 5/31/2019 LIGNA 2019, Hannover, Germany.www.ligna.de 6/7/2019 - 6/9/2019 CWPCA Annual General Meeting, Victoria, BC. www.canadianpallets.com.
DECEMBER 2018
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