Southeast Business Trends
A Better Market In The Southeast While Transportation Remains A Concern
By Ruthie Robison
Associate Editor
Lumber sources in the Southeast are reporting a better softwood market even with a seasonal slowdown for some. Many in the region, however, are facing challenges with transportation, including the high price of diesel, a shortage of drivers and some customers’ expectations of mills covering the difference in increased trucking costs.
An Alabama lumber representative said the softwood market in her area is better than it was six months ago, although she noted at the time of this writing that it “started slowing down last week, so it’s a little quiet this week.”
“I don’t know really what’s causing the slowdown,” she said. “But it’s sort of like the weather. You never know from one day to the next what it’s going to be doing. It may be slow this week, and then next week everybody’s going to want everything that you don’t have.”
Her operation handles strictly Southern Yellow Pine in 2×4, 2×6 and 4×4 and specializes in PET material. “About 60 percent of our production goes in PET material,” the source said.
As far as movement, she said PET material is selling best.
“We’ve got orders booked that we can’t even cover,” she explained. “Some of them book out two to three months ahead of time. But right now, the PET material is in big demand.”
The contact’s customers include traders, truss manufacturers and wholesale distributors. She said they have commented about a slight seasonal slowdown.
“They said as hot as it is people can’t get out in 100-plus degrees and do construction work,” she said.
A challenge her operation is facing is transportation.
“Trucking is a real serious issue right now,” the contact said.
The cost of diesel fuel has caused trucking companies to raise their prices, and some end users don’t want to pay the extra freight. They want the mills to catch the difference, she commented.
“So, freight issues right now are really tough,” she explained.
There’s also an issue with labor with some of the trucking companies.
Some Southeastern sources report transportation as a top concern.
“We’ve got one trucking company that runs all over the United States. They told us they have 100 empty trucks with no drivers,” she noted.
Her customers are also having a challenging time finding trucks.
“They want to turn their loads over to us to find trucks. Well, we don’t have any better luck than they do, and so we have to turn around and give it back to them,” she said.
But overall, the lumber representative said the market is “going to get better; it always does.”
She added, “It may be slow this week and next week, and then the next few weeks, it may be skyrocketing. You just have to go with the flow. Do the best you can today and don’t worry about it.”
In Georgia, a lumber supplier said the market in his area is good and better than it was six months ago.
“We got more orders coming in right now than we did six months ago,” he said. “Six months ago, it was wintertime, and it wasn’t as much. Definitely the volume is a lot better now, and the prices are a little better than six months ago.”
Handling Pine in mostly 1-inch boards, his customers include distribution centers and treaters.
While he hasn’t received any feedback about the market from his customers, he said, “We can tell they seem to be moving pretty good now.”
The source said he thinks that the demand has improved, and it’s a better market situation right now.
However, “Transportation has been a little expensive and tough here lately,” the contact noted.
“The transportation has been a little bit of a challenge but so far by paying higher freight rates, we’ve been able to go ahead and get everything up where we need it to go,” the source said.
He said he thinks the challenges with transportation may be due partly to a shortage of trucks, “but I think it’s more the price of diesel fuel than anything.”
He said the market is “not the best we’ve ever seen, but it’s going pretty good right now.”
A softwood lumber source in North Carolina said the market in his area is slow.
He added that there’s not much difference in the market than it was six months ago.
“Hardwood is slow because we’re not producing as much as we were producing,” he said. “We’re more into Yellow Pine at this time.”
He handles about 90 to 95 percent Southern Yellow Pine. “We do very little 4/4, heavy 5/4, a little bit of 6/4 and 8/4 in Yellow Pine,” he explained. He also handles some hardwood, including red and white oak and poplar.
“A couple of years ago, we were 80 to 85 percent hardwood, and gradually we have slipped over to 90 to 95 percent Pine,” he noted. The shift, he said, was because of the market.
His operation sells to a variety of customers, including retail yards such as Lowe’s, and millwork shops.
The lumber supplier said labor is very stressful at the time of this writing.
“We don’t have enough people to run 100 percent,” he explained.
He added that people are not looking for jobs. “We used to have 20 to 25 a month come by looking for work. You’re lucky if there are two or three. Some of them will take the job but don’t ever come to work.”
Transportation is another challenge. There’s some price gouging happening but there are still some decent rates out there, he said.
“Transportation is really all over the board,” he explained.
Overall, the market seems to be favoring Southern Yellow Pine in his region, although transportation and labor issues continue to be concerns.
For now, some Southeastern softwood lumber suppliers are hopeful that an increase in demand will continue into the fall, although the market is in a state where it can change from day to day, while those experiencing a subpar market are continuing to produce what is selling. Transportation, however, seems to be a key challenge across the board, whether it’s finding trucking for loads or the high price of diesel biting into profits.
