Northeast Business Trends
Bogged Down By Snow
The snowstorm caused transportation issues for those with shipping needs in the Southeast. The market has been reported as flat and uneven due to the economy, demand, tariffs and weather-related delays.
The market in Pennsylvania, according to a local lumber source, is “herky-jerky because we do business one day but not much the next day. It’s kind of surprising because there isn’t much regularity in business right now. I think it’s because of the weather and economy. The snow we had a while back gave us a hard time and many of our customers couldn’t work. With China’s economy still being off and us still having a 10 percent tariff on material going there, that market is off too. We’ve scrambled to pick up better business in other markets, but the situation is spotty everywhere. The customers who used to buy a load a week aren’t here anymore. In the domestic market, most of our moulding and millwork and distribution customers did okay last year. They’d say their business was more difficult than the year before. They’re getting jobs but they are smaller and more competitive.”
Despite the herky-jerky market, it isn’t worse than six months ago because, “it’s a little better. The tariffs basically killed us because we couldn’t ship. It also affected the price of everything. The big promise with the tariffs was that they’d bring more manufacturing back to the United States but that’s not true. In Red Oak, I’d say we’re three to 400 dollars behind what we were last April or May. That’s a substantial cut and not just in 4/4 — that’s across every grade and thickness we have. Red Oak was 47 percent of what we made last year. I think the other hurdle for us is Ash. It was 45 percent of our business, and we’re done with Ash now. The bug, the Emerald Ash Borer, has killed everything in our area and we were one of the last people handling Ash over here. We were also one of the largest producers of Northern Ash. It’s dead. It will be extinct in the next five years,” he added.
Aside from Red Oak and Ash, they offer Cherry, Hard and Soft Maple, a little White Oak and Poplar. “By sheer volume, Red Oak will always be our bestseller. Soft Maple is probably a bit more profitable, but we don’t do as much of that one as we do Red Oak,” he stated. As for grades and thicknesses, they handle 4/4 through 16/4 and “do every grade — FAS, Nos. 1, 2 and 3 Common as well as pallet material and ties.”
They sell to distribution yards but not wholesalers and export a lot. “Four years ago, we were 80 percent export. By the end of last year, we were 26 percent. We don’t consider Canada an export market. 74 percent of our business at the end of last year was U.S. and Canada based. When we were at 80 percent, 90 percent of that 80 was going to China. We do more business in the Middle East and Mexico now. China’s economy is very slow, and demand and usage of North American hardwoods is off because of the economy and tariffs. We really shot ourselves in the foot with the tariffs. I can’t voice my displeasure more with this administration for messing with my pockets twice now. We’ve about crippled business every way we can. The Chinese not buying and the lack of steady demand in the United States has caused a ripple effect and prices will go down,” the source noted.
Despite a “herky-jerky” market, one lumber source reported that business is a little better than six months ago.
When asked how the snowstorm affected transportation in his area, he commented, “We’re used to six months of winter where we are. The only problems we had would be in the South because they don’t know how to handle that, especially with domestic freight going into the Southeast. We can get trucks, but they’re about 100 to 250 dollars more for a truck to ship because there’s so much that needed to ship but didn’t. Now, there’s a backlog.”
“The market is pretty flat, but it is still moving,” stated a lumber source in New York. He attributed the flatness to “a combination of economic and seasonal issues. It’s about the same as six months ago. To improve the market, the economy needs to get better.”
As for species, he said, “You name it, we do it all. Our bestseller is probably Red Oak, and we handle everything from 4/4 to 12/4 and 16/4.”
They sell to wholesalers and are, as he said, “60 percent export right now. It’s not a struggle to get product out or find buyers for us. My customers haven’t expressed too much worry about the market. I don’t see anything positive or negative on the horizon that we should look out for.”
In West Virginia, a lumber source commented that they have had “so much cold weather that the trucks got behind, and everybody is playing close to their chests. The sun is expected to come out and warm us up a bit. The lumber business is steady but a little slow. If I call enough people, I can find some buying this and that.”
It is “as good as six months ago despite the commotion the weather caused. This was the hardest winter we’ve had in several years. We didn’t have any power outages here, but we had a power flash that cooked my air compressor, which cost us time and with some of these late models that have control boards, they’re five or six years old and everything needs to be rewired. Then, we must wait to get replacement parts, which has been infuriating. The supply chain issues haven’t gotten much better since Covid. It’s still a long wait for bandsaws. I guess that’s the new normal and we must get used to it. What might be affecting people, is if they were running on low inventory and then the transportation issues hit. If they get short on inventory, they’ll have to move off dead center. One guy I talked to who went to the Indiana Lumbermen’s meeting said that the sawmill representatives he spoke to in Ohio keep getting calls about people looking for pallet lumber. We might start seeing the price move forward because apparently the industry is working and they are shipping product out and will need our pallets eventually. I’m optimistic about that.”
Poplar, Red and White Oak, Hard and Soft Maple, Cherry, Beech, Birch and Basswood are what he said they offer. “The Red Oak business is okay, and cants are pretty good but I’m struggling with a couple of items. The people I talk to have a positive spin on it because of spring. People used to buy this time of year, so they had more material in inventory for when the spring building season started. If they wait too long, then there will be a mad rush and hopefully the prices will bounce up. There’s no money in Beech or Birch, but we have markets for it. People sell it for scragg or send it to the pulp mills, but we try to use whatever the forest has. We’re handling all grades. The high-grade and industrial items are the best movers right now. Flooring Oak has been good. Red Oak and Poplar are our bestsellers.”
His customers mostly consist of “distribution yards, flooring, cabinet and pallet companies. We haven’t been cutting railroad ties for several years because the pallet lumber has been good enough. Some of our orders are very specific – wanting 50 percent of the lumber to be long. If we were cutting railroad ties, everything would show up 8 1/2, so we stick to the longer product for the millwork houses. Some of it goes for export if it is length specific and since it is long, we make pallet cants because they buy all the different lengths.”
Transportation, due to the ice and snow, also set this business back, as shared by the representative. “We had some orders that were supposed to be delivered, and I told the truckers a few weeks ago when it needed to ship out. They called me recently to say they were behind and couldn’t get to it and had to delay it by a week. I even gave them more notice than ever but they’re still behind.”
The labor situation “is a lot better than it was,” he added.
