As we move into 2019, companies of all kinds are continuing to look for truck drivers and other employees. We recently saw a maker of laminate casework offer up to $80,000 salaries for over-the-road truckers.
In past discussions, Gene Wengert, FDMC’s Wood Doctor, mentioned that the lack of logging truck drivers (part the lack of 18-wheeler drivers nationwide for all types of cargo) was causing difficulty for sawmills to have enough logs for sawing.
There are also many logs going directly from the woods into overseas shipping containers. We are seeing higher log costs in order to get logs into the local sawmill. Wengert also mentioned how the increase and predicted increase in the next few years for railroad ties was going to mean less lumber sawn at our hardwood sawmills.
“That is, the buyers of RR ties are paying more for a 7 x 9 inch tie than the value of the 40 BF of lumber that could be sawn by not making a tie,” Wengert said. “Plus, the sawmill can produce ties faster and with less manufacturing cost than sawing lumber.
“Now we have new data showing that the nationwide shortage of 18-wheeler drivers has resulted in more cargo being shipped by rail. More rail traffic means more ties for maintenance of rails; most ties are replaced due to mechanical damage and not rot, so more rail traffic means more replacement ties will be required.”
What does all this mean? Hardwood lumber availability will tighten.
“There will be even less emphasis and profit for the sawmill to make the hardwood log entirely into lumber, which in turn will mean that lumber availability will shrink. The "big guys" might be able to get all the hardwood lumber they need, but most of us will find that getting enough lumber means paying a lot more,” Wengert said.
What can we do? Wengert offers strategies for the new year:
1. As our own (U.S. grown) lumber prices rise, we will look more and more at lumber from outside the U.S., tariff or not.
2. We will look at the possibility of using lower-price, U.S. grown species (one example: cottonwood that can be finished to look like cherry or walnut).
3. We will look at using less solid wood and more composite products, like MDF, or even plastic.
4. We will examine our own manufacturing operation to see if we can waste less wood by better efficiency and by finding economic uses for small pieces that we thought were scrap.
5. We will buy forest land with timber or buy standing timber for eventual harvest and contract with a sawmill to saw "our" logs with the lumber going mainly for our own plant.
6. And finally, if we do not prepare for the future, we will see the amount of foreign-made furniture and casegoods increasing way beyond the 60 percent that it is at now. The foreign companies can get wood at lower costs (partly because of no tariffs, partly because they already have efficient, active sources of lower cost foreign wood, and partly because their manufacturing yields are very high) and we all know that the wood cost (lumber sheet goods) of the products we make is around 70 percent of the total manufacturing costs.
How can you learn what is best for you? Keep up to date at events in 2019. The first one up is Wood Pro Expo in Charlotte, March 6-8.
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