The Preferred Contractor Program is an incentive-packed program designed to reward select contractors and remodelers for using Perennial Wood.

Shepley is excited to offer custom fit Atlantis Rail Systems. The Atlantis RailEasy™ cable system is an attractive, affordable, low maintenance stainless steel railing infill option for indoor and outdoor applications. The fittings are made from marine grade, type 316, corrosion resistant stainless steel and fit a 5/32 diameter stainless steel cable. 

Regionally, the anticipated demand for lumber in May was beyond the reality as sales didn’t meet expectations for most, leaving many retail and wholesale outfits heavy on inventory and scrambling for a way to spin off their stock before an impending market correction. Fear-based purchasing at the beginning of this year, driven by the prospects that shortages were imminent and sales would be inordinate, brought us to the stage that we are at now, where there is more inventory than is needed for the business that is currently in the pipeline. Purchasing only enough to cover immediate needs, buyers are finding accepted counters and prompt shipments the norm. Conversely, there is a looming notion that sudden demand will kick in and purge inventories. Some traders and larger wholesalers have been striking deals with mills, making block-buys and multiple truck orders with the anticipation that the market will rebound. With summer shutdowns approaching, this is could be quite likely, but not until there are enough sales to turn inventories at the retail level. The rebound may also not be to the extent that may be anticipated: with a four-month run up of pricing (with the Random Lengths Framing Composite peaking in April at $450), pricing had gone too far in one direction, and was destined to retract.

The conversation was about “fixers”. You‘ve run into fixers around the water cooler; the  parking lot after work; or elbow to elbow at the bar. Although fixers aren’t much good at fixing, they are very good at telling you everything that is wrong! At the same time, they do a good job of convincing (at least themselves) that it’s everyone else’s fault. Fixers are in fact blamers, but don’t tell them that without bracing for a good fight.

Viktor E. Frankl, Austrian Psychologist, once said, “When we are no longer able to change a situation, we are challenged to change ourselves.”

Charles Rosner, renowned advertiser and marketer from the 60s through the 90s wrote, “If you’re not part of the solution, you’re part of the problem.” This was used as a recruitment slogan, in 1967, for AmeriCorps VISTA.

Isn’t life pretty simple when you think about it? Many times each day we hit the fork in the road that offers us the choice between being part of the solution or being part of the problem. When we’re standing at the fork, we really do have the choice to be one or the other, it’s that easy.  Identifying “fixers” who are really part of the problem is easy too. If it’s100% someone else’s fault, you’re a “fixer”. If you find yourself standing by critiquing rather than helping, you’re a “fixer”. If you find yourself dissecting the situation, after the fact, rather than working on it while it’s going on, you guessed it…you’re acting like a fixer.

Let’s face it, to some extent we’re all fixers. It’s a matter of degree and choice of action. Being a fixer doesn’t mean you’re a bad soul, it just means you’re making some bad choices. Although you might get people to agree with you, they won’t be sympathetic toward you.  Picking everyone else apart requires no care and maintenance and certainly no responsibility, but when you get down to it who respects a “fixer”?

We all own at least some part of every situation, even if it’s only a sliver. Fix your sliver, even if it’s only 5% of the total, you’ll set an example for others to follow in fixing the rest. Challenge other fixers with, “I hear what you’re saying, but what are you going to do about it?” Lastly, you can help “fixers” and yourself by remembering a favorite quote of mine by Henry Ford: “If you think you can, or you think you can’t…you’re right” . Try fixing more than blaming!

Start Time: 9:30 AM
Date: May 21st
End Time: 3:30 PM

Congratulations to our heroesRon Winner  and EJ Jaxtimer!

Ron is an outside salesman at Shepley and received the Mentor/Role Model award for his work with Cape Cod Child Development. EJ Jaxtimer, Shepley customer, was given the Community Service award for the many generous ways he helps out our community.

We are proud to call Ron and EJ our friends AND heroes!

Shepley Wood Products is excited to become a stocking dealer for Zuri Premium PVC decking.  Zuri Premium PVC decking is manufactured by Royal Building Products and is the best PVC decking currently on the market.

Zuri’s unique features consists of a PVC substrate, wrapped in a photo realistic print foil, with a clear acrylic top coat.  The acylic top coat protects the surface from scratches, fading, stains, moisture issues, and helps with slip resistance.

Shepley stocks five colors—Brazilia, Chestnut, Pecan, Walnut, and Weathered Gray.  The finishes are very realistic and beautiful and because of the acrylic coating the deck maintains the original color and condition.  Included in the product offering are end pieces that enable a finished end of the deck and for excellent looking stair treatments.

Backed by a 25 year warranty,  Zuri is the best PVC decking you can buy today. It’s a great solution for high end decks with the look of Ipe but very low maintenance requirements of PVC.   The product is available 5/4 x 6  in 12’, 16’ ,and 20’ lengths.

The recommended fastening system is the Camo screw and guide gun which utilizes a guide and tow screw system for the hidden screw look.

Stop by Shepley, in Hyannis, to see the deck we have just installed outside the sales office.  We are very proud to offer this great product and look forward to providing a great decking for your customers that want the look of wood without the worry of the upkeep needed to maintain them.  Sample packages are available at the sales counter.

Happy Selling!!!

Clay Gilmore began his career with Shepley in 1989 as the Millwork Buyer. Clay now heads up the sales territory of Orleans, Harwich, Brewster and Dennis. His inside team consists of Katrina Finton and Bill Gresh. You can reach Clay, Katrina and Bill at 508-862-6222.

If there is one thing that we can bank on in this industry, it’s that it is cyclical. There are many causes for demand fluctuations (economic, natural disasters, regional growth, current trends, etc.) that will always impact our supply and, subsequently, pricing. We can resolve that whatever today’s market conditions are will likely change in the near future, because building materials are a dynamic staple that can be substituted and well-controlled, unlike food and fuel. For instance, Ipe decking was in short supply last year and so the market ran up right through the end of 2012 as buyers over-bought under the guise that Ipe was always going to be hard to obtain. As dealers were scrounging to obtain what they needed, they put their orders in and waited and waited for shipments that were coming from Brazil, all the while entertaining and accepting higher prices. As more realized that the lead times and prices were unreasonable, alternatives sprouted up and business was directed away from the imported wood. Then, as containers arrived (in late Fall, well past decking season), a glut occurred which eroded pricing and sent distributors (who don’t want to be overstocked on a big ticket item like Ipe) scrambling to move inventory by discounting prices. What happened to Ipe last year is a good example of a dramatic market condition that spurred emotional buying, which inevitably runs up pricing to the point of collapse.

There is no crystal ball for predicting the path that the market will take, but there are historical patterns that prove that what goes up must come down. The market is taking a breath after climbing a long and steady hill and evaluating what is coming next, which appears to be steady business backed up by economic stability, fair weather and thin inventories. Based upon this, our expectations are that buying will take place on the wholesale level (while prices are flat) and selling will increase at the retail level. Both actions will drive up the market again in May, but supply will be better this time around and it will flatten again. We have strategically bought against the market and are well stocked with competitive material, and are ready and grateful for your business.

Even though we’re all faced with the two inescapable inevitable’s of life, death and taxes, there are certain people who leave an incredible effect behind them. On April 9th, Mike Cole of Cape Associates in Eastham, Yarmouthport and Chatham left this earth and became one of those people who will always linger in many minds, as someone who can’t be erased from our memories and who will pop into our thoughts with regularity. “Indelible” is a great way to describe these few people and it’s ironic that a few years ago Mike and I had a conversation about another friend of ours, Attorney Pat Butler, who also was taken from this earth far too early. Mike and I had the very conversation about Pat that I now feel about Mike. We’d asked ourselves the same questions about what makes a person’s time, their time to go. We struggled with the fact that someone so good, wouldn’t be around to continue being so good. Frankly, I don’t think Mike and I really figured out the reason for Pat’s being taken but with Mike’s death, I have come to understand a little more.

Great writers and artists often don’t hit their peak success in life, it’s after they die that they are recognized for what they have brought us. For an Indelible, Mike certainly wasn’t a fellow who went around trying to cast a big shadow or to prove his importance. He has always been remarkably thoughtful, considerate, and giving. He certainly had a gift for settling people down rather than riling them up and he has been the type of communicator who dropped you enough hints that you picked up the right trail and took it, as if you yourself had come up with the right idea in the first place.

Mike had just retired and turned over the business of Cape Associates to his children, months before he left us. He didn’t even have time to take a deep breath, relax and reflect like he certainly deserved to be able to. Knowing Mike, he would have embarked on a whole new series of challenges, as Mike was a fixer and a mentor. He is also one of those people that you just can’t imagine the world without. He was a natural part of our industry and a real success at it, growing Cape Associates some 15 fold under his leadership, yet every one of his competitors respected him and even called him for advice. How rare is the person about whom no one has anything bad to say? No one has ever uttered a negative word about Mike, but then he wouldn’t return the favor either. Under his leadership as President, The Homebuilders and Remodelers Association of Cape Cod (HB&RACC) rose to a whole new level. It became the voice of our industry and began, finally, to be taken seriously by town governments, the Cape Cod Commission, and by our related builder’s associations around the state. Mike literally put us on the map and made us credible.

Seven years ago, when we needed to do extensive construction work on our Wellfleet branch, as we turned it from a former garden center into a lumber yard, I faced every lumberman’s dilemma in choosing a builder from among our customer base. It’s the old tale of making one person happy while angering 900 others because they didn’t get the job. I chose Mike because I knew he’d do a good job but also because he was the one person that everyone else would understand my reason for picking.

Mike’s style was not to force but to coach, to lead and to give you the hints you needed to find your way. I realized at his wake that he has left a lot for all of us. As much as we miss him, we were so lucky to have him. Being the Indelible that he is, I will have many moments where he will pop into my head. He will give me the opportunity to look at the situation through his eyes instead of mine. I’ll have the chance to ask myself, “What would Mike do?” and he’ll have given me another of his hints. He’ll have dropped another bread crumb for me to follow. Mike being Mike, I know that I am only one of very many who will have him pop into their thoughts in the same way. I’ll be seeing Mike for at least the rest of my life and suspect and hope that you will too. Thank you, Mike from all your many friends.

Start Time: 5:00 PM
Date: April 30th

Choosing a basic 5015 baluster and 6010 handrail is easy. It’s when we go beyond the basics that there is apprehension on where to buy and what to choose. There are a ton of stair part suppliers out there, but if you look closely, the offerings of each are extremely similar. Many stair part suppliers actually buy most, if not all, of their offerings from China. And as most stair builders know, crisp lines and quality can be suspect and sporadic. And if something out of the “ordinary” is needed, lead times can suffer.

Oak Pointe is far beyond the typical stair part supplier. They are actually a manufacturer and leader in stair parts made in the USA. The quality of their stair parts, and turnings with multiple profiles, and decorative milling options, make them a preferred supplier at Shepley. At Oak Pointe what is custom to most is standard to them . They offer a large selection of handrail, baluster and newel options in any, or multiple, species as the norm.

Oak Pointe’s custom capabilities, short lead times and quality make them a leader in the industry. The hollow turnings are impressive and the vast selection of milling options will meet any design theme. Custom turnings are an integral part of their business, with turnings available up to 124″ long x 15″ in diameter. They offer historic restoration and will prime, paint, stain & clear coat most offerings.

Oak Pointe will also offer cabinetry components, island columns, bun feet and cabinet legs. Fireplace columns and decorative columns are part of their offerings.

Contact Shepley today to find out more about creative and custom offerings available from Oak Pointe!

Matt Peirce is an Interior Trim Road Salesman for Shepley, who is supported by Casey Nadeau. You can reach them at 508-862-6225.

Complimentary dinner AND 2 continuing education credits toward the renewal of your CSL license! Learn more here!

It’s interesting to note that today’s Random Length Framing Composite is, as of print, $423. The last time that it hit this level was March 2005 (at $422), eight years ago. This was before any of the recessionary issues had become apparent and also when housing starts were well over 2 million per year. Take into consideration the increases of just about every other building material over the past eight years and you would be hard pressed to find another item that is the same price as it was eight years ago. For example, asphalt roof shingles are almost double the price that they were then, and steel items are, on the average, 75% more as well. The irony to this is that there are fewer lumber mills and less lumber in the market, so why would pricing not be, in fact, greater than it was when housing starts were over 2 million? Why the difference? The reason is that lumber is produced to meet demand and is a specialized product; it isn’t a material that will be commonly used in other commodity products (like petroleum and steel). In addition, with the decline of paper consumption, pulp mills aren’t demanding as much wood as they once were, thereby allowing more wood to go to the lumber end of the business. As a commodity, lumber is abundant and renewable, and can be sourced from many different regions. Because of this, opportunities exist to source lumber from other markets that may be at a price advantage to our current sources. As Domestic and Canadian fiber pricing escalates, it makes it easier for other markets to compete in the U.S. markets (and the European market, in particular, is well-poised to do just that as they see our higher prices sustain). This will, inevitably, add to lumber inventories and potentially flatten out pricing. Another factor that can (and likely will) attribute to more lumber in the market is that most mills scaled back production due to the recession. With increased demand, they now have the opportunity to add additional shifts or reopen closed lines and ramp up their production. Further still, during the recession some mills chose to close entirely and mothball their businesses until the economy rebounded. With the certainty that construction demand will continue to grow, the likelihood of them jumping back into the game is great. The reality is that, where there is an opportunity to capitalize on a need, smart business people will seize the opportunity and find a solution, and subsequently reap the benefits of their efforts. With regards to building materials, there is no doubt that there are thousands of opportunists at every level of the supply chain that are paying close attention now to where an opportunity may exist. We also cannot disregard the opportunists who are currently part of the supply chain; lumber mills and traders are certainly enjoying today’s prices and have no desire to see them deflate. There is much propaganda generated to try and stimulate buying, and it can be difficult to dispel or refute the claims. Sooner or later though, you learn who’s just banging their pots and pans in an effort to incite buying, and who has a more reasonable, factual and less emotional message to deliver.  With as much talk that is being done about how lumber prices are going to escalate this year due to shortages, there is a quieter message that is confidently arguing that a steep and fast rise of lumber pricing will be offset by a decline, based on the premise that there will be more supply infused into the market (either through increased production or through exports). As history can prove, what goes up does come down and the lumber market is no different. The key is not to overreact in one direction or the other and it is with this in mind that we proceed with caution and buy defensively in an effort to maintain our inventory at competitive levels.

We acknowledge that we are definitely on the upswing of the building recovery and realize that 2013 will present its share of challenges as we continue to emerge from the recession. As the lumber market stands today, we are seeing a trend in which pricing is likely to increase over the next four to six weeks (as Spring business pops) and, as it usually does, a flattening and relaxing as peak demand subsides. Keeping our “fingers on the pulse” of the market is our best strategy, as we will react where needed and think twice before doing so.

We thank you for your continued business and ask that you please contact us if you should have any questions or concerns regarding your upcoming jobs.

As we have been regulated to build tighter and tighter buildings to save energy, we have created some interesting challenges as side effects. Houses that are this tight have had trouble breathing, and poor indoor air quality and mold are two side effects that are certainly unintended, but are very real issues just the same. Indoor air quality can be helped by properly engineering make-up air into the HVAC system and/or using air exchangers. Mold can be addressed with pretreatment of building components and by proper moisture control and proper building envelope planning and construction.

Who gave much thought to indoor air quality and mold thirty years ago? Back then was just the beginning of super insulated building envelopes and we hadn’t learned the lessons we now know today. The building code changes are by no means over and we will all be aiming at a moving target for years to come. Whether it’s the hurricane codes and how they change building or the energy codes and how they tighten up the building shell, it will continue to be up to us to anticipate and not simply react.

Doors and windows have evolved with the codes too. 30 years ago, a door or window wasn’t even rated for air or water infiltration. If they had been, they would have rated very low on today’s Design Pressure or Performance Grade scales. Whereas today, we see double hung windows rated with a DP70 rating, three decades ago you would have been lucky to see the equivalent of a DP 20. Doors and windows are made to much more exacting performance standards and frankly, as tight as houses are today, they have to be. As the only major operable part of the building envelope, doors and windows are subjected to incredible force with the differences in internal and external pressure. In the old days, a house could equalize easily. Remember those drafts we grew up with in older houses? The movement of that air allowed pressure and moisture to equalize easily between inside and out. Remember the old technique for surviving a hurricane? It was to crack open the windows on the leeward side of the house, to help equalize the tremendous storm pressure and not allow the house to literally vacuum water and air inside.

Windows and doors that are engineered to meet today’s higher demands and today’s higher standards will only perform to their rating, if they are installed as they were designed to be installed. To that end, the Building Code now requires that all windows and doors be installed in accordance with manufacturer’s installation instructions. Instructions from manufacturers are remarkably similar from company to company because the rating agency used to grade performance is the National Fenestration Rating Council (NFRC). So not only is it a code issue to not follow the manufacturer’s installation instructions, it’s also a potential warranty issue. In the event of a problem with a window or door, the last thing we want is to be debating with a manufacturer whether the problem is caused by installation.

If we do it right, we only have to do it once. We are happy to help with teaching your crews how to install windows and doors to factory specifications. For those who don’t enjoy reading multipage instructions in different languages, we have installation videos and jobsite training available so that your subs or employees know how to install to the letter of the law. We also offer pre-assembly of certain components such as slider frames and mulls in our shop to simplify the process on the job. Please check with your salesperson for details. Simply weigh the cost of one ounce of prevention against the always expensive pound of cure and remember one of our Shepley favorites, “We get what we inspect, not what we expect”. We’re here to help!

Click here for more information.

register to attend at www.capecodbuilders.org
Start Time: 5:00 PM
Date: 2013-03-12
End Time: 8:00 PM

visit www.capecodbuilders.org to register!
Start Time: 07:3
Date: 2013-03-22

Click here to watch “Shepley Andersen A-Series Patio Door/Frame Installation”.

This solar field has nearly 6,000 panels generating 1.4 megawatts of photovoltaic power!

Quote from Tony Shepley – President, Shepley Wood Products:
“We are excited to be part of a collaborative effort that is helping to push through alternative energy as an emerging technology. This solar array is producing significant green energy with no moving parts nor environmental risk, only positive impact. Charles F. Kettering, head of General Motors, once said ‘We should all be concerned about the future, because we will spend the rest of our lives there.’ Welcome to the future!”

About My Generation Energy –
My Generation Energy is a Cape Cod based solar installation company that has been expanding rapidly since Luke Hinkle started the company in 2009. In 2012, My Generation Energy became the largest solar installer in Barnstable County with a broad appeal to both residential and commercial customers. My Generation Energy is also known for creating the Nation’s first Community Solar Garden® project, an innovative and responsible way to make solar more accessible.

Quote from Luke Hinkle, President, My Generation Energy, Inc.:
“While the image of thousands of solar panels is impressive, the real beauty of this project is in the vision of the future for businesses on Cape Cod and throughout Southeastern Massachusetts. My Generation Energy has been actively developing business models to amplify the local benefits of solar. Many other solar developments on Cape Cod are unfortunately owned by distant and veiled entities—hence, the major benefits are lost. The remarkable success of My Generation Energy and its customers stems from a focus on local ownership. As recently demonstrated with our Brewster Community Solar Garden development, the proper business approach keeps the benefits close to home. The Airport Way Solar project shows another method for forward-thinking business owners to control their energy supply and re-invest in area businesses. My Generation Energy sincerely thanks the owners of Airport Way Solar for their commitment to these principles. We are excited to play a role in this energy revolution.”

The notable work of Mark Hambly (Shepley Service Department Manager) and Dede Miller (Service Coordinator) was reflected in the accolades collected during customer satisfaction surveys performed by Andersen Corporation.

Shepley is a member of the Andersen Dealer Service Network, allowing us to handle service and warranty issues, and giving us full access to the parts and resources we need to provide you prompt and effective service.

To schedule a service visit, contact your Shepley sales representative or call the Shepley Service Department at 508-862-6219.

The fastest and most efficient way to get parts information and quotes is to determine year, glass size and swing (if applicable) of the Andersen unit. To do this first find the product’s manufacturing date located next to the Andersen logo etched on the interior bottom right-hand corner of the unit.

Next, measure the visible glass size (width and height) from interior. Then, if needed, determine swing of door or casement window from exterior.

At this point your Shepley Andersen Team can determine the part number, cost and lead time. More recent parts are usually available within a week where older vintage parts may take 4 weeks. You are also able to tap into over 20,000 items spanning 80 years worth of Andersen products by visiting their online parts catalog at http://www.andersenwindows.com. Along with a description of the parts and pieces, Andersen’s site also provides detailed instructions on how to install them along with video demonstrations of installations, warranty information and care and maintenance guides.

Over the course of 110 years Andersen Windows has been determined to improve the performance and energy efficiency of all their doors and windows. So, if new windows or doors are in your customer’s plan and budget their home will greatly benefit from the innovations achieved over this time. If a full replacement or remodel isn’t in their plan and your customer just needs an older Andersen unit repaired then please utilize the resources that the Shepley Andersen Team can provide. Thank you.

Joe Murphy manages the Shepley Showcase, our dedicated Window and Door Showroom. Direct: 508-862-6228 jmurphy@shepleywood.com

Battic has the only stair cover kit available that meets the 2009 International Energy Conservation Code (IECC) and the 2009 International Residential Code (IRC) – used in all 50 states and most jurisdictions! 2009 IECC Section 402.2.3 and 2009 IRC Section N1102.2.3 reads: “Access hatches and doors: Access doors from conditioned spaces to unconditioned spaces (e.g., attics and crawl spaces) shall be weatherstripped and insulated to a level equivalent to the insulation on the surrounding surfaces.”

A minimum of R-30 to R-49+ is now required by Code. Battic has the highest insulation of ANY kit available. Beware of inferior products with zippers, magnets or Velcro that can leak and break, do not have proper insulation and cannot meet Code.

The Battic BEST kit includes durable reflective box cover, weather-stripping and insulation. It installs in minutes with NO tools. The Battic fits easily between trusses, rails and existing construction, which is why contractors love it!

The stair cover is light weight and very strong and durable (tested to withstand 350 lbs. on top). The reflective aluminum shield slips over the stair cover and seals the insulation. It also provides a reflective surface that saves energy and reflects away heat. The Reflective Aluminum Shield blocks up to 97% of radiant heat!

The Battic Door Stair Cover meets your “green” building needs, because it’s made from recycled materials. It also saves on energy costs and increases the comfort of your home by reducing drafts.

The Battic Door system pays for it’s in a few months! What are you waiting for? Order yours today!

Don Rhodes has been with Shepley for 12 years. He has extensive industry experience with windows, doors and interior products. Don is a Shepley Interior Trim Road Sales Representatives, and is backed by Erin DelVecchio. You can reach Don and Erin at 508-862-6225.

“One man’s hedge is another man’s gamble.” – Tony Shepley

Most people who have gambled will agree that there is little opportunity to come out on top with a winning. It’s the luck of the draw and well-executed decisions that give one the best opportunity to win. Although there is no guarantee on a gamble, the excitement of the potential of coming out on top lends to the entertainment aspect of recreational gambling. Speculating on where a particular market is going in a business setting is akin to gambling, although the result may not be quite so clear (and it’s certainly not entertaining). When buying against the lumber market, one can never predict what influences may or may not occur that will significantly impact the value of lumber at the time that the bill is due. Hedging ones’ bets that a particular alignment of situations is the ideal time to gamble on buying heavily into inventory (with the anticipation that it will be worth more) is a true risk as, by the time that delivery is taken, events could dramatically change the outcome. The lumber industry operates on extremely low margins and it is a commodity that has the distinction of having very high “highs” and very low “lows” in a short period of time. It can make a lot of sense to take the risk to try and squeeze out a higher profit margin when you can buy low and sell high. However, today’s market is still quite volatile as compared to how it was prior to the recession, and it hasn’t quite fallen into any patterns that would make buying on speculation a wise decision from the dealer level, especially when volumes are still comparatively low to pre-recession levels. Although it used to be a great opportunity to gain additional margin, it can safely be said now that that was when the economic factors that played a key role in the predictability of influential circumstances were more predictable.

Today, with lumber being a global commodity, impacts to the market can happen in a minute’s notice and the risk is far greater than it used to be to hedge against the market. Sure, opportunities do still exist, but the reward may be minimal as compared to the risk which would take the form of a significant price penalty a dealer or wholesaler would pay if they were to get it wrong. We are often asked if we can beat the impending advancement of price increases by buying in bulk prior to increases and, often, we can if it is a product that is not part of the commodity market and stands the great likelihood to hold its value. With lumber in today’s climate, we believe that the best approach is to act on opportunities when we can and take advantage of our contracts and relationships with traders. Our contracts help to insure that we have wood when we need it and at a competitive price and our relationships with our traders help give us insight to impending issues that oftentimes give us a chance to seize an opportunity before it’s announced to the world. The “loading the boat” approach to purchasing can have a profoundly negative effect on pricing in an unstable market, so we choose to  average our costs by carrying enough inventory for a typical month’s worth of sales and, if we need to do our own hedging, to have on order another month’s worth. By working with our average rolling costs over a six to eight week period, we are able to clip the peaks and valleys from the costs of the materials, and provide you with a bottom line, cumulative price quote that is as competitive (and oftentimes even more competitive) than those yards that choose to buy on speculation.

As we head toward spring and the weather becomes more conducive to building, we do expect a busy building period. You can be confident that we have covered our inventory needs with the quality stock that you have come to expect from us and we are well-poised for business. As always, please be sure to consult your salesperson should you have any questions or concerns regarding any current or upcoming jobs and thank you for your business!

With every cycle of market fluctuations that we experience, whether stimulated by raw material shortages, unexpected demand, natural disasters or global impact, we are able to learn a little more of the nuances of the new and revised post-recession market. It has been a long time since there has been any consistent demand to the lumber market; in recent years, it has been characterized by brief peaks and valleys as pricing has followed suit. On the whole, pricing has remained well below the historical norms but one commonality has been the sensationalism built around the fluctuations, and the anticlimactic result as it passed. There is much drama built into what could be: pulling the truth out of the prophecies and determining what impact they may have on our livelihood make for lively conversation but also, to some extent, instill a lot of anxiety. Just about everyone in this industry has an opinion to offer as to what can potentially happen to our market, but the sage advice comes from those that look at the entire process of homebuilding, from the forest to the homeowner, and take everything that may affect conditions into account. In addition, they realize that over-reactions are a factor of human nature and that those who likely to incite fear and panic with their opinions must be taken into context and challenged.  One machine of the new age that contributes to expediting fear and panic is our media, which is a major contributing factor to the manner of our industry’s response to any noteworthy tale. In an instant, a sensational article can be spread to all players in the supply chain and fervor can ensue. There is plenty of reporting that is done to educate and inform us, but the writers also know that the first rule of selling a story is to build in a level of sensationalism that will catch everyone’s attention and get people talking and, oftentimes, buying. Bolstering their claims of the next major pending issue with the latest (and oftentimes obtuse) facts and figures helps them to argue their predictions. The latest round of sensationalism is surrounding the recent increase in lumber pricing that we’ve seen, comparing current figures against our recent history figures, more specifically, our recession years. As you’ve heard from us numerous times, the Random Lengths Composite is a figure used as the industry “barometer” of lumber pricing: it is designed to be a broad measurement of pricing movement. Currently, our composite is hovering in the $380/m range, which sounds like quite a drastic climb from even one year ago when it was almost a full $100/m less. But what needs to be understood is that we have come from a period of such low lumber pricing that the low numbers that we had become accustomed to would never be able to sustain this industry. As a matter of fact, in order for mills to remain in existence, the composite has to be at $300/m just for the mills to break even. Compared to the heyday of 2005 (and before recessionary influences did their damage), the composite was where it was today at $382/m (and it even spiked to $420/m for February of that year). The composite ebbs and flows month to month, and yearly averages more accurately reflect pricing trends. For 2012, the yearly average as $322/m, the first time that it has broken the $300 mark since 2006 (at $327/m). What needs to be taken into context is that we are in the midst of a rare rally, the first in years that is bolstered by optimistic factual news that more business is to come, which is cause for the increase in pricing. Ours is a cyclical business, and extreme highs and lows are never permanent: often, they are over-reactions. We can’t forget that for where there is a demand, entrepreneurs will find a way to fill the void if they see an opportunity to earn a profit. As the reality of a housing recovery becomes a dawning fact, we can expect continued fluctuations and will need to keep in mind that there will always be an ebb and flow to supply and demand, contributing to the highs and lows of pricing.

It is our job to best interpret and filter industry propaganda and provide you with what we know are truths that are relevant to both of our businesses. In addition, we know that the success of our business depends upon how well we can provide you with your needs, being quality, competitively priced products that can be delivered to you when you need them. We realize that we are susceptible to market fluctuations as much as any other lumber yard, but it is our job to make informed purchasing decisions that allow us to clip the peaks off of pricing spikes so that you don’t have to let extreme market conditions become another burden for you to bear. Through informative venues such as our Shepformation, we hope to provide you with relative market guidelines that give you a month-to-month snapshot of market conditions. But we also realize that it takes more than our Shepformation articles: we need to be there for you to convey the latest information on a day to day basis, through the efforts of our highly trained and well-informed sales staff. Please do keep in mind that, although we speak in terms of “the market”, we can provide you with more concise and specific information as it relates to any of the building materials that we sell (engineered wood, roofing and siding, millwork, hardware and more). All of our departments are affected by conditions brought on by the supply and demand of building materials in general, and each follows its own cycle of price fluctuations; they may not be as frequent or dramatic as lumber, but they occur nonetheless and we work very hard to make sure that they do not become your issues. We also realize that you have to be able to forecast your own budgets and that requires us to provide you with as accurate information as possible as to where we see things going. Although no one can predict where the market may go with 100% accuracy, we can assure you that we will not only keep you well informed but will also buffer wild swings so that you will not see drastic changes in any short period.

Thank you for your support and, as always, please feel free to contact us should you have any questions or concerns.

Last week, I took my children to a restaurant. My six year old son asked if he could say grace. As we bowed our heads, he said, “God is good, God is great. Thank you for the food, and I would thank you even more if Mom gets us ice cream for dessert. Liberty and Justice for all. Amen!” 

Along with the laughter from other customers nearby, I heard a woman remark, “That’s what’s wrong with this country. Kid’s today don’t even know how to pray. Asking God for ice cream! Why I never!” 

Hearing this, my son burst into tears and asked me, “Did I do it wrong? Is God mad at me?” As I held him, I assured him that he had done a terrific job and God was certainly not mad at him, an elderly gentleman approached the table. He winked at my son and said, “I happen to know that God thought that was a great prayer.” 

“Really?” my son asked. 

“Cross my heart” replied the gentleman. Then in a theatrical whisper, he added (indicating the woman whose remark had started the whole thing), “Too bad she never asks God for ice cream. A little ice cream is good for the soul sometimes.” 

Naturally, I bought the kids ice cream for dessert. My son stared at his for a moment and then did something I will remember the rest of my life. He picked up his sundae and without a word walked over and placed it in front of the woman. With a smile, he said, “Here, this is for you. Ice cream is good for the soul sometimes.”

So go ahead and enjoy a nice big bowl of ice cream!

An improving market has people speculating that lumber price increases are sure to follow. We’ve taken a number of calls from customers inquiring about the best ways to hedge against this conjectured inflation. As reported in Paul Roger’s Lumber Update (in this issue of Shepformation) prices are up from where they’ve been. But, to put today’s prices in perspective, the Recession drove levels down to those we used to see in the 1980’s and kept them depressed for a long time. Occasionally a customer will bring us in an old hand written invoice from our earliest days. They are quaint mementos of our past, sometimes from the days before our first computer system. They also carry pricing that is not a whole lot different than what we’ve been selling many items for, over the past few years. Yes, lumber prices are up, but only up to where they were 6 years ago. Recently, pricing was at levels we saw 20 years ago. Lumber mills have been having a devilish time surviving, because of so often having to sell below their cost. As efficient as mills have been forced to become, the low market levels have taken their toll. More than half the mills have shut down, and some of the best names in dimension lumber, like Winton, are off the market. But as demand is less than half of what it was when things were booming, there hasn’t been enough demand or shortage of supply to really drive prices up to where they should be in terms of normal inflation.

It is every lumber broker’s job to stir the pot and keep everyone on the edge of their seats wondering when the market will explode. They make money on market activity. Mills and brokers would love to find a way to drive up prices. They’ve been down so long, the only direction they can think of is up.

Earlier this month Bloomberg.com reported their opinion that lumber prices could actually come off a little in 2013, after their recovery in 2012. Between increased production in the U.S. at mills not running at full capacity, and increased lumber imports from Canada, plus decreased exports to China, they expect enough of a supply to satisfy the still relatively low demand. That will keep lumber steadier than we might have thought. Yes, there will be certain lines that defy this. Drywall, insulation, and steel seem much better able to get higher prices to stick. Lumber tends to give back a lot of what it takes in market gains.

When asked how to hedge against price increases, we can answer with the old industry adage, “One man’s hedge, is another man’s gamble”. Taking a position, commits you to that position, regardless of what the market does. No one can cover all their risk, without taking on the cost of that risk.

Here are our recommendations for 2013:

• Don’t try to outsmart the market. It will have its ups and downs.
• Demand and pricing work with seasons. Whatever projects you can schedule for off peak months will favor your ability to buy better.
• Use time as your ally in getting your homeowners to commit and get projects started. Put a time limit on how long you can hold your price.
• Tie your contract pricing to an independent indicator like the Random lengths Composite Average (our Dow Jones indicator of lumber market pricing) so that you have some protection against market spikes, natural disasters, and the fact that lumber still is historically underpriced.
• Don’t drive yourself crazy! It’s our job to worry about timing the market and protecting you against price spikes. There is always a bit of ebb and flow, but we can really smooth out the cycles.

Talk with your Shepley sales team. An important part of quoting is forecasting. We’re here to help!

7:30AM – 2:30 PM at the Shepley Showcase.

Earn continuing education credits toward the renewal of you Construction Supervisors License. Click here for details.

Tuesday, January 22, 2013

9:30 AM -3:30 PM

Shepley Showcase

75 Ben Franklin Way

Hyannis MA

Walk-ins Welcome! 

To call for an appointment,contact Leah at Shepley 508-862-6261 or lkosnack@shepleywood.com

There are ways of washing your roof every couple of years and applying zinc or copper strips to the ridge of the roof, but there is a better solution! Installing CertainTeed AR (algae resistant) shingles will help deter the growth of that nasty black algae.

CertainTeed’s StreakFighter™ protection for asphalt shingles is designed to make them resistant to algae by placing a unique layer of copper oxide between the mineral core and the ceramic pigment coating. These copper rich granules are evenly dispersed throughout the shingles exposed surface, allowing the copper to leach out over time, providing reliable, long-term protection against algae growth.

While zinc is also a notable algae resistant metal, we prefer the performance of copper. Zinc can sometimes cause “blooming”, a reaction caused as the zinc oxide builds up in moisture rich environments. Copper granules are available in a wide range of colors, therefore they won’t distort the original color of the roof by giving it a gray cast, like zinc can.

CertainTeed shingles with StreakFighter technology are available in a wide variety of styles including: traditional three-tab; designer laminate and; heavyweight luxury shingles. In addition to a great selection of styles, they carry a great warranty. These warranties protect against manufacturing defects and algae contamination.

For more information on CertainTeed StreakFighter shingles contact the Roofing & Siding Specialists at Shepley!

Gordon Correia has over 35 years of industry experience—20 plus in the field and over 15 in sales. He works along side Andy Senatore and they are the Shepley Roofing and Siding Vertical Product Specialists. Gordon and Andy have over 60 years of combined experience. Don’t hesitate to  give them a call with any roofing and siding questions you may have. Gordon’s Cell 774-836-5886 / Andy’s Cell 774-836-3149

As is the norm, most dealers refrain from “loading the boat” with stock inventory as they go into the New Year (in order to avoid paying taxes on their inventory value as well as reducing the amount of stock to count for year-end-physical inventories). However, the increase in business forced many dealers to bring in enough stock to extend them through the mill shut downs and well into January. With an unprecedented run in sales for this time of year, historical sales provided little guidance. For those who weren’t keeping a close eye on their inventory on a daily basis and not defensively buying against their sales, replacement material was priced much higher than their sold inventory and it wasn’t easily obtained, even if the mill could quote it. Particularly with 2×4 and 2×6 stock, many popular mills sold off what they had prior to the shut downs and went off line with “no quote” replies to inquiries. One trader reported multiple cases of pricing spreads of up to a $40/mbf between some of the few mills that were still quoting stock, which was a clear indicator of the pricing volatility leading up to the shut downs. Consequently, some stalwart SPF dealers were forced to convert to fir at a minor discount, just so that they had something in their yards to sell. In other instances, dealers simply lost what business they could have enjoyed due to the fact that they either didn’t have their inventory covered or were priced much higher than other competitors.

Of the astute dealers that could see where the market was going, they did load their boats and covered their inventory all the way through mid-January and beyond, when mills would be safely back on-line. It’s with this anticipation that pricing would flatten out and availability concerns would be alleviated upon the reopening of the mills that returned some stability to the market. As of print, it is appearing that this is just what we will experience for this first month of the New Year: pricing is expected to flatten out after a stretch of increases and availability issues will be lessened. The immediate challenge now is determining what impact the weather will play on our ability to build and the mill’s ability to produce. In regards to our own inventory, Shepley bought defensively and early on, so we are in a very favorable position with our inventory, being that quality, price, and volume are not an issue.

According to an article in the Random Lengths (vol. 68, Issue 49), “lumber available to the U.S. through the third quarter (2012) totaled an estimated 27.6 billion board feet. That’s about 7% higher than in the same nine-month period of 2011, and the highest level for the period in four years. The gain, however, compares to a significantly stronger percentage gain in housing starts, which year to date is running 28% above a year ago.”  The recent influx of business came as a distinct blessing to an industry that has long since suffered with a modicum of activity. It is also a great illustration of how reactions to the new reality of the lumber industry will distinguish those dealers who are “in” the new game of lumber supplier from those who rely upon old habits and standards that are largely reliant upon outdated perceptions. It’s apparent that the old days of lumber buying, when a dealer could easily get what they wanted when they wanted it, are behind us for now. The reality is that homebuilding is gaining significant momentum (almost 900k in October ’12; a 42% increase over October ’11) but the lumber supply chain infrastructure (available timber, loggers, lumber mills and truck drivers) has not grown since the major reductions caused by the recession.  Considering that one million housing starts used to indicate a poor year, we are bound to see a struggle to obtain wood and, inevitably, deal with pricing volatility in the face of a lack of available lumber. In an article released by the International Wood Markets Group titled “North American Lumber Prices Forecast to Soar in 2013 and Reach Record Highs in 2014” (IWM press release, 12-10-2012), a “super-cycle thesis” surrounding the lumber supply has potential to create an inordinate lumber shortage amidst a strong demand, thereby escalating lumber pricing to new highs. Citing, among other things, the effect of the Mountain Pine Beetle epidemic in British Columbia (which is anticipated to destroy up to 60% of all pine trees by the end of the decade), plateauing Canadian lumber production (the Quebec government, which controls 90% of the provincial forests, is slated to have reduced harvesting by the 30% objective next year (initiated in 2004)) , Chinese demand (2012 saw a drawback, but consumption is expected to increase in 2013) and the role of Timber Investment Management Organizations (TIMO’s), which own forests and will have greater control on logging, (and expected to manipulate margin by controlling inventory), the article focuses on the worst-case scenarios of the lumber industry recovery. As we’ve experienced with the many hypotheses and predictions surrounding the lumber market, points of concern such as these laid out in this article need to be taken with a grain of salt because we know that no one’s crystal ball is crystal clear. There are also elements of urgency and anxiety that these articles create, which help to incite sales. The reality is that supply and demand will seek their levels, just as what we’ve experienced with this latest run of business and, in the long term, business will be drawn to where there is money to be made. As demand increases, entrepreneurs will find a way to meet the needs of the consumer and, presumably, some of the concerns that we have today with supply will be abated. The bottom line is that it will be dependent upon the progression of the recovering U. S. housing market, which is still in a state of flux. Recovery will be measured in more immediate terms, and this is where we feel that those that are dedicated to their own and, ultimately, their customer’s success, will realize and seize the opportunity that by developing strong relationships with suppliers, concerns of pricing volatility, inferior quality and short supply issues will be mitigated.

As we begin the New Year, we are seeing it as a start to a new and exciting era, one that will give us the opportunity to enjoy some long lost prosperity through new business; new business that we are eager to earn. It will be with our sincerest gratitude to have the opportunity to earn your business and prove to you that we are the company that you want to do business with.

Thank you for your support.

Fortunately, you just survived the end of the world!  The Mayan Calendar scare was supposed to happen on 12/21/2012, and here you still are, reading this article, days later. So, congratulations, you lived through Armageddon, just as the experts told us we would. Dr. John Carlson, NASA Director of the Center for archeo-astronomy, began studying the 2012 Mayan doom prophesy almost 35 years ago. Apparently the Mayans thought in much longer time intervals with their Long Count calendar, making it the most complex calendar system ever developed. They thought not just in thousands of years, but in millions and billions while they studied the stars in our universe. Dr. Carlson explains that with those kinds of big picture numbers, their calendar “rolls over” the way your odometer does when it passes the 100,000. So on 12/21/12, the Mayan Calendar simply rolled over to a re-start, not the end of the world. To any would be worriers out there, Dr. Carlson’s message is, this wasn’t a close call, it was just an unfounded misunderstanding. Someone saw a blank page and started worrying.

Remember the Y2K scare? For all the hoopla leading up to 12/31/99, and the number of companies that invested in new computer systems, it appears that the Y2K phenomenon was no more than another Mayan Calendar rollover scare. Is anyone out there aware of a single company that went out of business because of Y2K computer issues? Interesting, isn’t it?

2012 is special because less than two weeks after the “end of the world”, we now have to worry whether the US will drive headlong over the fiscal cliff. From fire and brimstone to financial collapse in just 10 days! Film at eleven!

To put this all in perspective, remember that the quickest and most powerful emotion we feel is that of fear. Fear gets people’s attention better than anything else, which explains its frequent use. We all become carriers if we pass on misinformation or fan the flames of rumor, and fear is always one of those things that people seem to want to share, so that explains its power. Fear can also be a great way of getting attention off ourselves and onto someone else.

So assuming that the Fiscal Cliff is, in actuality, another great example of both parties of our government continuing to kick the can down the road, while managing to keep us all in suspense, we will likely not fall into fiscal collapse. Although there are certainly some hugely important points for us to address about federal spending, economic stimulation, and federal revenue generation, the economy is not going to implode. This isn’t the first time; it’s just the next time, by the way.

Let’s presume that you’re convinced we’ll survive these events – what can we do to not scare ourselves so much going forward? How do we start to focus on solutions rather than just fear?

1. Do your diligence. Don’t believe everything you see on the internet or that you get in an e-mail from someone who is trying to rile you up. Go do a little research and find the facts. www.factcheck.org is a great resource to monitor factual accuracy of U.S. politics.
2. Don’t hit the “Forward” button quite so fast. Before you pull the trigger, figure out what you’re aiming for
3. Challenge your sources! When it sounds too good, or too bad, to be true….it probably is. Instead of passing along a fear, put it to bed!

So Mr. and Mrs. Contestant….would you like “Disease and Pestilence” for $400? How about “World Terrorism” for $600? Or should we just get back to the game basics of Fix the USA for the grand prize?

Season’s Greetings and Happy New Year!

The Shepley Estimating Department is skilled at working with LEED projects. They can help you with product specification and managing the documents you will need to achieve your certification. For more information on USGBC LEED, click here.

Read the details here.

Charles Darwin

Benjamin Disraeli

Bejamin Disraeli

Aldous Huxley

Abraham Lincoln

Abigail VanBuren

Tom Dennison, Shepley General Manager

Nido Quebin

Supa Doors, Inc. has been manufacturing environmentally kind” stile and rail MDF doors for over 20 years in the USA. All doors are hand checked before they are shipped, ensuring product reliability. With two decades, and over a million doors of experience, Supa Door is confident that their doors will stand the test of time, so offer a limited life time warranty.

Every door is built to order, offering design flexibility, because they are made to your specifications, by hand, with sophisticated machinery. The Supa Door patented technology-stile and rail laminated process ensures no weak joints and offers other advantages like interlocking keyed edges that run the full length of both stiles. Supa Door also offers solid wood doors (for that cherry study), and most designs can be identically matched to the MDF doors.

Supa Doors offer environmental sustainability. MDF, at its core, is recycled wood. Supa Door also uses 100% recycled wood fiber, low VOC primer and glue, and offers “no added formaldehyde” and FSC certified material options.

Supa Door has always been a major player in the hotel and commercial fields.  Their doors have very good STC (sound transmission coefficient) ratings. They also offer 20 to 90 minute fire doors in most styles.

If you’re looking for an excellently crafted door for your next project, consider Supa Door, they’re “the end of the boring door, where custom is standard”!

Rob Taylor has 25 years of experience in the lumber and building materials industry. He specializes in Interior Trim and is supported by Pete Iodice.You can reach Rob and Pete at 508-862-6225.

What did slow business was the effect of Hurricane Sandy, which essentially pushed sales down the calendar. Some were talking of additional price hikes due to material needed for the rebuilding of destroyed structures along the New York and New Jersey coasts, but that is unfounded for now. Hurricane Sandy did have a major impact on several of our key suppliers who were without power, communication or both, due to the storm for better than a week. CSX announced a temporary embargo of all rail freight cars destined to Philadelphia north up to Massachusetts in an attempt to try and prevent an unmanageable backlog of cars. This did contribute to a tightening of available lumber, but it was short-lived. As power came back on line and companies once again found their footing after the storm, they struggled to find trucks to deliver their material as, by this time, reloads and dealers were clamoring for their now-very-late orders. By the time November arrived, a sudden draw on construction materials and a tight supply exacerbated by storm delays tied into moderately rising prices. Traders were suggesting to dealers to buy “while the material is still available and while it’s at today’s price”, and some dealers took that advice although it seemed to be more of a reactionary suggestion due to the Hurricane as well as a desire to run up of business.

Trucking is still a very real issue as, in many cases, Christmas trees trumped lumber deliveries, further extending lead times. It’s anticipated that this latest cycle will follow the norm, in that the rise will be met with a decline as supply and demand meet equilibrium. When a leveling will happen depends on how much more building is slated to occur in the coming weeks and what impact the winter weather will have in New England. Mills typically shut down during the holidays and many already have full order files that won’t be filled until they reopen after the New Year. While the mills work through their available log supplies, supply may remain an issue after the New Year if demand is sustained. As we head into December, prices are remaining firm as demand is still moderate against a tight supply.

In reflection of 2012, we had a good year for business and are extremely grateful to be enjoying some of the effects of the rebounding U.S. housing market. Looking toward 2013, we are optimistic that we will see more of the same. According to the U.S. Commerce Department, new home construction had reached an annualized rate of 872,000 in September, the highest figure in over four years (but still a paltry figure against the highs of 2,000,000 between the years of 2004-2006). As business continues to grow, concerns shift more toward available supplies, prices and lead times. Whereas a lack of steady business in recent years has gotten dealers nervous in investing too much in their inventories, the lack of having enough stock on hand contributes to reactive buying, further perpetuating the run-up and retraction cycles of lumber pricing. Although we may still be a ways from enjoying steady business that can instill confidence at the dealer level, it will also take that steady business to initiate a rebuilding of the infrastructure of the lumber supply channel (in order to promote a consistent environment for pricing and supply). According to the Forest Wood Products Journal, total employment in the building materials sector declined by 194,000, or 28% between 2005 and 2010. The amount of lumber mills that once existed to support a regular 1.5 million plus houses per year will have to slowly be rebuilt as over half are now out of business since the Recession. Another major concern is the trucking industry, which will have to become flush with rigs and qualified drivers. The American Trucking Association estimates that there’s currently work need for between 20,000 to 25,000 drivers nationally, a deficit attributed to the fact that  older drivers are coming off the road (for retirement or because they fail to meet CDL health requirements) and there is very little interest from our younger generations to take on a driving career. The ATA estimates that that number could go as high as 239,000 in the next ten years.

The key will be to have long and steady and not short and sporadic business cycles so that the threat of having too much overhead in the midst of a retraction won’t kill profit margins and harm businesses. We may not be able to enjoy this until the hangover of the Recession wears off and the rebounding economy finally ignites in the form of added jobs and consumer confidence. In the meantime, we need to adapt and thrive amidst this fluctuating business cycle. This is where we believe that our strength as a lumber yard comes in, as we believe in investing in our inventory and developing long-term relationships with our suppliers who keep us well-apprised of market activity. Based on this philosophy, we are able to refrain from knee-jerk reactions to market conditions and provide you with the consistent pricing and quality lumber that you need from a supplier in order to be profitable in your business. By carefully monitoring the market, our inventory and your activity, we are able to provide you with the consistency that may not otherwise be the case with other dealers.

Currently, we are in a great position with our inventory and are ready to provide you with your lumber needs in 2013. In addition, we are very grateful to have had a wonderful year and want to thank all of you for your past, present and future support. Have a safe and Happy New Year!

With all the hot air being blown around about the pros and cons of wind turbines, photo voltaic solar arrays are quietly generating power. Solar panels have been around for decades but technology is making its expected leaps and bounds forward and has resulted in huge gains in quality and performance while at the same time costs are continually driven down. Today, a solar panel costs about one thirtieth what its predecessors cost several decades ago. At the same time, reliability and performance are far improved. While solar may not be on the same rate of rise as the Internet, the solar industry is increasing at a 100% annual growth rate. Only two years ago, solar passed the 10 giga-watt annual production figure. To familiarize you with the terminology, one kilo-watt is one thousand watts, one mega-watt is one million watts and one giga-watt is one billion watts. It takes one kilowatt (kWh) of electricity to burn a 100 watt light bulb for 10 hours. That’s a lot of light powered by rays of sunshine!

Critics of any form of alternative energy are usually quick to point to higher costs of power production. But frankly, every form of energy we use today enjoys some form of subsidy. You didn’t think our gas prices were this low, in comparison with the rest of the developed world, just because of our good looks did you? Certainly having the US dollar as the world reserve currency doesn’t hurt, as everyone has to buy oil with dollars, but subsidies also affect traditional energy production. Monetary backing promotes growth of resources and hopefully leads to self-sustained stability. Look at the Internet, it didn’t spawn itself. It was developed by the government as a military tool and subsidized to the point at which it could take flight by itself.

Strategic analyst and author George Freidman writes in his book, The Next Hundred Years, that he foresees solar collector arrays in space, which will beam energy back to earth by microwave transmission, by the year 2050. Friedman believes the US will be uniquely positioned to take advantage of this new energy opportunity and that it will establish us as an energy leader and free us from our fossil fuel dependence.  However, that’s 38 years away. In the meantime, we are working on state-of-the-art technology that is still on the ground and not yet in the sky.

Shepley Wood Products is the first lumber and building material distributor (that we are aware of) who can claim to generate more electrical power than it uses. Currently, we are the owners of the largest solar array on Cape Cod! But we look forward to being eclipsed by larger solar projects in the near future. Located next to the Barnstable Municipal Airport, our solar array has nearly 6000 panels covering a surface area of almost 4 acres and a ground area of 6 acres, and generates 480 volts of power back into the grid. Yes, the electric meter does actually spin backwards in what is called a net metering arrangement with Nstar. This array does prefer a sunny day and produces peak output of just under 1.5 mega (million) watts. Longer summer days are higher producers than short winter ones and sunny days out perform cloudy days, but even during our most recent tropical rain storm, with not even a hint of sun visible,  our solar farm was producing a respectable 46 kilo (thousand) watts. Our goal was to put a piece of undeveloped property to its highest and best use. We want to help drive alternative energy awareness to help wean us off of foreign energy and encourage the production of domestic energy.

Charles Kettering once said, “We should all be mindful of the future, because we will spend the rest of our lives there”. By harnessing the sun’s rays, we hope to bring the future one step closer.

How Many Credits/Hours?
Construction Supervisors License/ “Unrestricted”: 12.0 Hours*
The One and Two Family Dwelling (“Restricted”) License: 10.0 Hours*
The Specialty Licenses: 6.0 Hours*
*Every Two Years at Renewal

What Categories?
Of the required hours, there are five mandatory topics, with a minimum of one hour required in each:
Code Review
Workplace Safety
Business Practices
Energy (except Demolition Specialty License)
Lead-Safe Practices (only first renewal cycle)

How?
To earn the required credits (CEUs), licensees must take courses that have been pre-approved by the state. The Board of Building Regulations and Standards (BBRS) deems that approved courses must “impart appropriate and related knowledge in the regulated industries.” Students must attend classes in their entirety in order to receive the approved credits.

Where?
The Home Builders & Remodelers Association of Cape Cod (HB&RACC) is a Course Coordinator for CSL Continuing Education. They are coordinating courses being held at various locations across Cape Cod—including your local lumber dealers.

Have you considered becoming a member of the HB&RACC? You receive a discounted rate on CSL courses, a voice in your industry, advocacy on legislative issues, and so much more! Join us at the next General Membership meeting to learn more about the benefits of membership in the HB&RACC. This meeting will feature the CEO of the National Association of Home Builders!

Visit www.capecodbuilders.org

Next time you have a project that calls for stained or painted cedar siding, consider using pre-finished Maibec Eastern White Shingles instead of field coating. Every shingle is kiln dried, precision milled and stained to provide long lasting beauty. Pre-stained shingles offer U.V. protection and they are water repellant and mildew resistant. Pre-painted or pre-stained cedar shingles save the labor cost of an on-sight painter. And you avoid costly scheduling delays due to bad weather or seasonal constraints. You’ll never have to worry about overspray, dripping, splattering or clean-up problems. Therefore, the jobsite is neat and the product looks finished immediately. Pre-finished product eliminates the risk of color variation, lap marks, shrink lines, streaking and dirt pick-up. Unlike a field finished shingle, which is only coated on one side, back primed wood resists absorbing moisture that can cause the finish to blister and peel.

A big consideration in using pre-stained or pre-painted shingles is the warranties. You don’t get anything close to this if you field finish! You get a 50 year warranty against wood decay with semi-transparent “spice” series, solid stain, bleaching oil and misty gray finishes. There is a 20-year limited solid stain warranty, including 7 years labor (two-coat applications), a 10-year limited solid stain warranty (one-coat applications), and a 3-year limited “spice series” warranty.

For more details on the products and warranties that Maibec and Shepley offer, contact Gordon Correia or Andy Senatore at

508-862-6200.

Shepley Stocks:

• · Maibec Gray: R&R clears and R&R extras (1 coat)
• · Lighthouse Gray: R&R clears and R&R extras (1 coat)
• · Bleaching Oil R&R clears and R&R extras (1 coat)
• · Weathering Stain: R&R clears and R&R extras (1 coat)
• · Lighthouse Gray: R&R clears and R&R extras (2 coats)

Boy, did I unleash a firestorm of response to the article I recently wrote about customers wanting “More, more, more”. People have gone out of their way to tell me stories of how customers have put them through the wringer to quote a job six ways to Sunday, only to dismiss them with one line e-mails saying “we received your bid, we will be soliciting other bids and will get back to you.”

Remember the old days, when someone admired your work, made the effort to learn about your business, and sat down and negotiated a contract? Remember when a customer would wait until you were available? In light of today’s economy and today’s “it’s all about the bottom line” outlook, those memories seem quaint and quite distant.

Pendulums are made to swing and although this economy has certainly swung far to one extreme, the laws of nature ultimately bring it back. Here are some things to think about while we wait for the return swing to happen.

1. Don’t take things personally.

2. Consider your audience- how do you give them enough to qualify, but not so much that they take advantage of you, at your expense?

3. It’s OK for you to qualify your customer as they are qualifying you.

4. Let them know how much you’ll do for free and when it will start to cost. You can’t do everything for nothing. You can’t give away the store and not get some business back.

5. “Our present circumstances don’t determine where we can go, but merely determine where we start.” Nido Qubein

To bring point number 5 to life, I have to share a story that I find inspirational. A fellow I know in his late 60’s suffered a stroke. It left him paralyzed on the left side and he described it as if a line had been drawn vertically down his body and everything on the right worked and everything on the left didn’t. How could you not feel hopeless? This man is an excavator and he still has a Caterpillar 225 from the early 70’s that he has owned since new.  I remember when he first got it.

He told me that when he was half paralyzed, he used to drag himself out to sit in that excavator every day. He would tape his left hand, now paralyzed, to the joy stick and try to think the nerves into moving.  After weeks of trying, one day he felt a flicker of movement. He kept at it and started to make some hand movements with his left hand, not useful movements that could make the excavator function, but hand movements just the same. After a time, that old Caterpillar could finally start to move, then with more time and effort, it moved better and better. Somehow, very familiar motions, that he had practiced for 40 years running that machine, began to re-establish themselves and he re-learned skills that he hadn’t really lost, they were just buried somewhere that he couldn’t get to. His recovery took a lot of work and time in the operator’s seat. He told me his wife thought he was crazy dragging himself out there each day. I told him he should write a letter to Caterpillar.

Today, he looks fine and moves well. He met the challenge on his own terms and converted certain defeat into practical victory. He just had to take a different path to do so. Sometimes, to get through challenging times, we have to look at different approaches. Heroes are those who accomplish what the rest of us were convinced was not possible.

There was a time when relying on historical sales data was the best strategy but, because it just doesn’t adhere to any consistent pattern any more, more attention is paid to what is ahead by observing quote levels. As we had experienced this same time last year, preparations for a “lean” winter were well underway when suddenly business popped in mid-November, spurring reactive buying, depleting back-up supplies and leaving everyone wondering how to best prepare for the coming months. Fortunately for us, the level of business sustained right through March, thanks (in large part) to the extremely mild winter we had. Should the same happen this year, we don’t believe that anyone will be complaining but there could be a few panicky moments of trying to obtain stock that won’t be there.

Since early September, mill order files have pared down, lead times have shrunk and pricing has been in a slow decline. The Random Lengths Framing Composite, which had settled at $342 at the first week of September, has only retracted a mere 7% as of print. It appears that the reason that pricing hasn’t deflated more is because dealers have been busy quoting jobs and are showing confidence that there is work in the pipeline, and so mills have been careful to only produce for current demand and not run any surplus. The general sentiment is that the market is still very “under-bought”, meaning that dealers and traders alike do not have enough inventories on hand to cover the business that is anticipated to come. This can be attributed to the lack of consistency in historical sales patterns, which is spurring a lack of confidence in banking on potential and probable business (truly a hangover of the recession is being gun-shy at buying more than for immediate needs). For our own inventory, we have been keeping regular trucks on order so that product closely coincides with market pricing; this has been a strategy that is keeping us very competitive and well-stocked. Going into November, we will maintain this same strategy so that our pricing remains sharp and our inventory levels are secure.

In the broader spectrum of the lumber market, there is a lot of optimism towards the growth of the current and future U.S. housing market, and the Canadian mills in particular are taking it seriously. Big mill producers, such as Tolko, West Fraser and Canfor have announced that they will be running at full capacity this quarter in response to demand from the U.S. and the Asian markets. New U.S. housing starts for the month of August showed an annual rate of 750,000, a 12.8% increase over 2011 and a 2.3% increase over July. Forecasting for 2013, expectations are that starts will exceed 835,000. Although any sign of growth is welcome, this is still well below the one million start benchmark that used to signal a “bad year” for building, but at least it’s going in the right direction. Having gradual and steady growth may actually help us in the long term, as the supply chain isn’t what it used to be when we had over a million starts. With so many consolidations and mill closures brought on by the recession, there just aren’t enough current resources (mills, reloads and drivers) to be able to handle any fast growth. Factor in seasonal periods that restrict foresting, and the situation can become even worse. According to an article in the Vancouver Sun by Gordon Hamilton, Gerry Van Leeuwen, vice-president of the Vancouver research firm Wood Markets states that “the coming year could bring price volatility…. brought on by insolvencies and consolidation in the U.S. distribution and wholesale sector, which have led to a squeeze in the supply chain that is bound to affect lumber prices going forward”. In summary, fewer distribution locations mean less available product thereby bringing greater price fluctuations. This scenario ties into the warnings that we’ve regularly heard from our traders: being “under-bought” is a position that will come with its challenges. Most notably, an under-bought yard will not be able to obtain inventory when it’s needed, will pay a premium for stock and jeopardize their competitive standing. Ultimately, it will be their profitability that will suffer the most.

Thankfully, at Shepley we have a great system of teamwork in place that allows us to forecast on real business and avoid being under-bought. In addition to that, we believe in investing in our inventory. Despite the national economic issues we face and the impact that it has on us locally, we are glad to report that our business is strong despite the challenges that affect us all so greatly. We have not and will not deviate from our business formula of providing exceptional service with quality products to you, our professional building contractor customer. Through our efforts in establishing relationships and applying our industry know-how, we are well stocked with competitively priced, quality materials for your next project and remain dedicated to your success. As always, we appreciate and thank you for your business!

(Article courtesy of CapeCodToday.com October 4, 2012)Last month, the Hyannis Elks Club presented their “Citizen of the Year” award to Tony Shepley of Shepley Wood Products.

The award is given out annually to one person in Hyannis/Barnstable who demonstrates a commitment to service to the community. In discussing the reason for giving out the award, Exalted Ruler Jeff Deitke stated, “we want to honor the people that provide service to the community and recognize the time and financial contribution that it takes for them to devote themselves to the community.”

Exalted Ruler Elect, Frank Zibutis said, “Tony is a true philanthropist that the Cape & Islands is very fortunate to have as an exemplary citizen and friend.”

The award was presented at the clubs’ annual Member Appreciation Night at their lodge on Bearses Way, March 10th. The officers and members of the club keep their eyes open looking for things that happen and stories of people that are noteworthy to recognize for their commitment to the community.

The membership also honored the recipients of the Hyannis Elks Club’s “Elk of the Year”,  Mike Perry and “Officer of the Year”, Paul Legere.

Tony Shepley is well known for his commitment to the community. He serves on numerous boards in town and is well known for his consistent generous donations to a wide variety of organizations.

Courtesy of the Hyannis Elks Lodge 1549.

I recently listened to a talk on diversity which offered insight on how stereotypes, pre-conceived beliefs and our impressions drive our behavior. It got me thinking about how we react to the world around us.

A lot of our behavior is likely based on conditioned reflexes influenced by old survival instincts. Running from predators involves more reaction than thought process, and in times of stress or panic, it’s not unusual for us to show more of a fight or flight response, than an intellectual one. Our capacity for intuitive decision making has evolved over the years, but we still take shortcuts to simplify complex decisions. We reference our past experiences in an effort to speed up the process of getting to a satisfactory outcome. In our effort for efficiency, we risk jumping to conclusions or filling in the blanks before considering all the facts.

Look at how your kids react when introduced to unfamiliar foods. Many times they offer a disgusted “yuck” and refuse to eat it, even though they’ve never tried it.  Maybe this is a hold over defense mechanism from the lessons our ancestors learned while foraging in the woods for nourishment? The wrong food selection could prove fatal. Fortunately for us today, Stop & Shop isn’t known for its dangerous food selection, so you don’t have to be a slave to only what you know.

Prejudice is certainly a great example of our leaping to conclusion. We create stereotypes and start to profile. This may have started as a mechanism to protect us by allowing us to sort out potentially dangerous people from perceived safe people, but these things carry over with unintended consequences. Then we find ourselves passing judgment on people for how they look, who they vote for, or where they’re from.

Sometimes people leap to a conclusion, by starting with the conclusion. How about that customer, who has you do an incredible amount of work bidding a project, and then instead of reading what you have given them in your bid package just jump to the last line of the last page, directly to that final number? Often they may be trying to grab for the easiest handle and also may be trying to hear what they’d like to believe. They’re looking for the “easy button”, they want to “cut to the chase”, and “get to the bottom line”. All well and good, but you have to remind them that you get what you inspect, not necessarily what you expect.

Part of our maturing as people and developing as a race, is our ability to move past operating on gut reaction only. We grow when we think, process, digest and then formulate an opinion and a plan. We separate ourselves from the rest of the animal world by our ability to look beyond the surface, to dive into the details above the bottom line and to not judge every book by its cover. Sometimes we all need a little reminder that we have this ability and that it’s important for us to use it. After all, we’re human!

Throughout the summer, prices climbed due to a limited supply but, as mills came back on line and began producing, pricing slightly retracted. However, the retraction was not enough for secondary’s and dealers to bulk up on inventories so the “buy only what you need” was the most common strategy employed. With October upon us and typically being one of the busiest building months of the year, prices are relatively firm and have the potential to climb if business picks up. Traders are warning dealers to cover their needs for the next four to six weeks, although it should be noted that these warnings have become a common and handy tool to spur sales. Pulling out the threads of truth from the statements of impending increases can be a challenge (if not an art-form), so some buyers are taking the advice to heart while others are passing. As of print, pricing has come off a little since the beginning of September and has stabilized, but there is anticipation that October business will stimulate the market and pricing.

It’s interesting to note that (from strictly a pricing perspective) today’s lumber prices are still considerably lower than where they were five and even ten years ago. In pre-Recession years 1996 through 2006, the Random Lengths Framing Composite average was $368, or approximately 10% higher than today’s number. Considering the low of $197 in 2009, it’s been a slow but steady climb back but yet it still hasn’t reached equilibrium as compared to the increases that we’ve seen in other building materials such as sheet rock, insulation and roofing. It’s remarkable that lumber pricing has remained as constant as it has despite the fact that we have lost so many producing mills due to the Recession. If building today, know that lumber is still a bargain despite the limited resources.

In the competitive market of lumber, successful dealers quickly learn that they have to pay close attention to market pricing and position their inventory accordingly in order to maintain sales. One of the biggest disparities we come across in this industry is the apples-to-apples comparisons of building products, as there are plenty of items that appear to be apples on paper, but are oranges in reality. This is further complicated by the many seemingly equal brands of products in today’s world (take PVC and composite decking for example, as there are dozens of available brands with very few outward differences). When comparing lumber and determining that specie, grade and mill are on par, the focus goes to the current market price for the product, and how a dealer is positioned against that market price. As you’re well aware of, this is a highly competitive industry that keeps professionals finely tuned to the “going rate” of goods, and sometimes wise (or lucky) purchases allow the benefit of an exceptional profit in the face of a market price. Then there are “loss leaders”, which is a term for a marketing technique utilized by retailers in which popular “lead” products are significantly discounted (most often below cost) to draw the attention of consumers and to lead them into believing that all of the pricing supplied by the dealer is at bargain pricing. Although a successful tactic, it’s a misleading one that cannot be sustained for too long in the lumber industry. At Shepley, we have built our reputation on consistently offering honest and fair prices for a quality product and so we find gimmicks such as loss leaders a manipulative tactic. We work very hard to monitor market pricing and will never give you a trick number to get your attention.  We also view our relationship with you as a partnership and so we don’t want to give you any reason for doubting our prices. In fact, we want to be a part of your success so, rather than playing those games, we aim to make our prices fair across the board with the intention of having a net bottom line that will make you as sharp as you can be on your project. Our goal is to provide you with a comprehensive, complete list of goods at competitive pricing that will not surprise you with hidden expenses during the course of your job. To us, value of this nature is where long lasting relationships are built: we try to instill a trust in you that we are not angling and scheming to gain your business through ruse pricing or dishonest actions.  We want to be the company that you want to buy from, and for all of the right reasons.

Speaking on behalf of all of us at Shepley, thank you for the opportunity to be your building materials supplier and we all look forward to being at your service.

I listened to someone recently complaining about his customers. He told me that everyone is hard to satisfy and that all his customers seem to constantly want more. More attention, more response, more discounts, more hand holding and more innovation.

I found this interesting. I told him I certainly understood how he felt but that I thought he was fortunate. His customers weren’t telling him they wanted less of him, they weren’t telling him they were leaving and going elsewhere, they were simply exercising their rights as customers. In every competitive event, don’t we expect contestants to run faster, jump higher and throw farther? Would you buy a ticket to see someone swim the 200 meter freestyle slower than last year? Not likely.

Customers aren’t going to pay us to feel sorry for ourselves. You might get some pity if you work for free but if you’re charging what the work is worth, you shouldn’t plan on a pity party. It’s part of good service to stay focused and motivated to raise the bar, not rest on it. The old 80/20 rule of caring is that 80% of our customers don’t care that we have problems and the other 20% may be glad we do. In customer relationships, sympathy is optional. You may get it, if you’re lucky, but don’t wait around expecting it. What we must remember is that it is our customer’s job to ask for more service, to ask for a lower price, to tell us we are too expensive, and to spend more time concentrating on what we can do better, than congratulating us for what we do well.

None of us invented the rules of customer relationships…we just live them. The conditions of any competitive relationship aren’t easy, but they are fruitful. None of us ever learned or improved by sitting back. It is our job to remind our people and ourselves that our customers aren’t an inconvenience, they’re our life blood. Customers are not a source of frustration, stress and failure. Customers simply present us with an opportunity to perform. When we perform well, they want more of us. We then can flourish, grow, and profit. When we make our customer the enemy we find out we are only fighting ourselves. Take a deep breath, count your blessings and take responsibility for the outcome. Blame yourself before you blame your customer.

According to our buying group’s Lumber Futures department, most dealers are still very optimistic that sales will remain strong for the next 2-3 months and that any pricing corrections will be minimal. The Random Lengths Framing Composite (our barometer for lumber market pricing) has remained solidly above the $300 break-even mark since the beginning of 2^nd quarter 2012, an encouraging sign that there is a sustained demand. Determining what to forecast for usage into the next coming months is a hard call for most dealers as the unexpected business can lead one to believe that it was Fall business coming early, but some took early positions while others decided to ride it out. Although this industry has a tendency to be a little over-zealous regarding market conditions (for the sake of profiting from these fears), we do believe that the consistent message from the supply end of the trade is that prices will remain firm to up through September.

With U.S. housing starts showing a 27% increase over for the first half of 2012 as compared 2011, there is no doubt that the rate of building is growing as a result of consumer confidence, low mortgage rates and low real estate prices. News reports are focusing on American’s weak consumer confidence and that is bolstered by the fact that the majority of American’s household finances are still tight enough to make it a real struggle just to make ends meet; the aspiration to build a new home or addition is still too big a risk to even consider for most. Although the toll of the recession on the psyche of the average consumer has made consumer spending weak, the hopes are that fewer fluctuations in the economy with spur job growth and will, eventually, help to quell some of the fears of taking on debt for the sake of living space. As the American population continues to grow and housing inventories decline, the command for more homes will certainly spur a need for more building.

The cost of just about every commodity that we consume has increased dramatically over the past decade, and much of it can be attributed to the cost of fuel. Whereas consumer confidence is often spurred by the opportunity to take advantage of a “deal” or “discount” (such as our Massachusetts Tax-Free weekend has proven), the recent decline in gas prices has encouraged more Americans to hop in their vehicles to travel (as anyone who has spent time on Cape Cod roads this summer will attest to). As we all well know, the reality is that gas isn’t a bargain today in terms of what it was a decade ago ($3.60 per gallon today versus $1.38 per gallon then); gas is only “cheap” in terms of what it has cost recently. The perception and reality of what is considered a good deal should not be disregarded when it comes to lumber; we’d like to think that the current deflated prices of real estate and lumber should encourage more Americans to be building. Although lumber prices have rebounded somewhat from the lows of 2009, they are still only on the average 15-30% higher than they were at this time a decade ago. In terms of value, lumber is one commodity that has remained relatively unaffected by inflation despite the paradox of being in a significantly reduced volume of supply. This summer’s unexpected activity may be a turning point for the lumber market, in which prices remain at more of a constant price level than in year’s past. If demand sustains at today’s levels, supply will be tight, but manageable. If any significant increase happens, we will experience more shortages and higher prices until production can catch up. However, one shouldn’t be lulled into a false sense of security to the notion that production will instantly ramp up to demand. Log inventories are low (and cannot be harvested, dried and milled quickly) and available producing mills and trucks that would be available to handle the business are merely fractions of the whole that used to be available a decade ago. Lumber market predictions of late have left much to be desired as no one’s crystal ball is nearly as clear as they would hope it be, so wise lumber yards buy enough to cover their needs and just a little more, just in case.

It’s key that successful lumber yards work to remain as stable with their pricing as they do with their inventory in order to keep customers in the best position that they possibly can. We’re happy to say that we’ve strategically positioned ourselves with great quality, competitively priced material and are ready to be the stable supplier for all of your lumber needs this Fall and beyond. We commit to keeping you well apprised of any significant changes in market conditions, and welcome you to share any concerns you may have regarding any upcoming jobs. Thank you for your business!

As mentioned in our July 2011 article, in years past it took strong swings in supply and demand to significantly impact lumber pricing. This was largely attributed to the volume of business that was being conducted as, with greater inventories, companies have a larger buffer to absorb price fluctuations. However, with thinner inventories, there is a greater impact. As those in the lumber trade have become accustomed to keeping their inventory levels as lean as possible in order to keep cash flowing, the luxury of maintaining heavier inventory levels in an effort to cover potential needs can have a devastating effect to profit margins. The buy-it-when-you-need-it strategy that many lumber dealers have gotten used to isn’t as flexible as it once was and, in many cases, not an option at all. Last year, the impact of Hurricane Irene created extreme shortages in reloads and dealers could not get the tallies, mills and grades that they wanted.  When this occurs, many are forced to take a wild-card truckload of tallies from sub-par mills of inferior grades in order to get some of what they need in order to cover holes in their inventories. As a result, pricing and lumber quality can suffer. It’s a difficult situation to be in but, if you are running out of inventory and substituting your normal mill choice, grade or dimension for ones that are available, you may lose business in the process. We are no exception to this risk, although we act to protect ourselves from these situations by entering into contracts with quality lumber mills and work to maintain and forecast a stable inventory so that we can be certain that we can provide you with quality lumber at competitive pricing when you need it.

So far this year, we have been blessed with spectacular weather and our hurricane season isn’t appearing to be a tumultuous one. Nonetheless, it doesn’t take a hurricane impact here on Cape Cod to have an adverse effect on lumber supplies in general. Other factors that impact the market, such as China’s draw on lumber, lack-luster housing starts, high unemployment rates and trucking shortages all play their part in availability and pricing. Despite these “white noise” global factors that impact us on a local level, the normal business trend is that approximately every four to six weeks, we get an uptick in business that firms prices and clears order files, followed by a slight relaxing. In an effort to flatten out the peaks and valleys, we plan our purchases strategically and analyze market pricing trends in order to remain competitive with high quality lumber. Based on this, we stake our reputation on being the company that contractors can rely upon for their needs, and we will work in earnest to maintain that reputation. Please remember that our sales staff is here to serve you in the best manner that they can and we all promise to work in your best interest, all the time. Should you have any questions or concerns about our lumber quality, levels or pricing, please contact your Shepley sales person today. Most sincerely, we thank you for your business!

I recently received an e-mail from a cousin of mine. He asked me to imagine what it would be like to buy lumber the way we buy airline tickets. He said the typical transaction might sound like this:

Customer: How much for a 2×10-14’ KD SPF?

Clerk:       Well, that depends.

Customer: Depends on what?

Clerk:       Actually, a lot of things.

Customer: How about giving me an average price?

Clerk:        Well, that’s really too difficult a question. The lowest price is $14.24 each, but we have 150 different prices up to $48.95 each.

Customer: What’s the difference in the grade?

Clerk:       Oh, there isn’t any difference, it’s all the same grade.

Customer: Well, I’d like some of the $14.24 stock.

Clerk:       First I have to ask you a few questions. When do you intend to use it?

Customer: I have a crew showing up tomorrow.

Clerk:       Sir, the 2×10-14s for tomorrow are $48.95 2x10s.

Customer: What? When would I have to buy to get the $14.24 2x10s?

Clerk:       That would be in two weeks, but you will also have to agree to start framing before                 Friday of that week and work through at least Sunday.

Customer: You’ve got to be kidding!

Clerk:       No sir, we don’t kid around here. Of course I’ll have to check availability of the $14.24 2x10s before I can commit any to you at that date.

Customer: What do you mean check? I can see you have stacks of 2x10s right outside the door.

Clerk:       Just because you see it doesn’t mean we have it. It may be the same 2×10, but we only sell a certain number of pieces on any given day. Oh and by the way, while we have been talking, the price just jumped to $15.10.

Customer: How can that be?

Clerk:       You see, we change prices and rules many times daily and since you haven’t actually locked in your order, everything is subject to change. Unless you want the same thing to happen again, I suggest you lock in some $15.10 material. How many pieces do you need?

Customer: Well I’m not positive about the quantity so why don’t I get what I think I need and then add a few extra pieces just in case?

Clerk:       I’m sorry sir, you can’t do that. If you buy lumber and then don’t use it, you’ll be liable for penalties and possible confiscation of the lumber you already have.

Customer: What?

Clerk:       That’s right, by knowingly over ordering, you may be in violation of our tariffs.

Customer: But what does it matter to you…I already paid for it!

Clerk:       Sir there is no point in getting upset, that’s just the way it is. We make plans based on the idea that you will use all the 2x10s and when you don’t it causes us all sorts of problems.

Customer: This is crazy! I suppose something terrible will happen if I don’t                  keep framing until Sunday night.

Clerk:       Yes sir, it will.

Customer: Well that does it! I am going somewhere else to buy 2x10s.

Clerk:       That won’t do you any good sir. We all have the same rules. You may as well buy them here while the price is still $15.10. Thanks for shopping with us.

Next time someone tells you that consolidation of industry is all for the good, please share this with them. Our mission is to never lose sight of the people who drive our business. As it says on our shirts, “Attitude is Everything!”  We know you have a choice of whom you use for materials; we thank you for choosing Shepley. You are now free to move about the cabin.

If you ask a table full of businesspeople “How’s business been so far this year?” chances are 9 out of 10 will tell you that business is better this year than last.  We are emerging from the deepest recession of our lifetime, and it has been a long haul.  The signs of health are returning: housing inventory, at just over five month’s supply, is historically low, and unemployment is at the best levels since 2007.  The National Association of Home Builder’s (NAHB) Builder Confidence Index is actually double what it was just one year ago.  Unfortunately, so far, banker confidence is not, so tell your banker friends to cheer up!  Eighty percent of housing in the US is priced below $300,000 and that is wonderful news for home buyers. Interest rates remain lower than they have been in over 50 years and somehow banks have figured out how to be profitable without doing a lot of lending.  Please make sure you don’t follow the Federal Government’s budgeting and spending model, in your business, but please do spend what you can to rebuild your infrastructure. Our economy needs it.

2012 is a great time to train, equip, and re-tool. Those who don’t clean up their loose ends this year, will likely find themselves too busy to do so next year and beyond. If recessions give us anything, they give us pause. They create a time for forced self-reflection, and set the stage for action and improvement. Economic downturns have historically been the cradles of innovation.  People are forced out of their comfort zone in bad economic times and then begin to adapt and invent. Necessity (and hardship) is the mother of invention.

What have you learned about your business during the past four years? With all the reinvention you’ve been forced to achieve, will you keep it, harness it, and work it?  Or will you slowly slip back to the comfortable pre-recession numbness that a good economy seems to encourage?  I’m not suggesting you become a price-slashing low-bid meister, I am talking about having the vision to stick to a solid business model that puts the lessons you’ve learned to work and pulls your business forward.

As a supplier, we get an interesting look into several thousand customer businesses and their models. The one common theme we see with those who succeed best is: teamwork – trained and well communicated. Successful builders surround themselves with a team of subs and suppliers. They communicate their workflow so all the players perform smoothly together, and this helps to control and minimize mistakes as well as keep administrative overhead down.  Price-shopping builders, who jump from sub to sub, typically don’t succeed, and when the economy comes back, everyone remembers who ground them down to the bone. If you are not comfortable partnering with your current subs and suppliers, maybe you should be finding ones who you are comfortable with. Who makes up your team?

Our hope is for a gradual, smooth economic recovery. We need one that doesn’t swing from famine to feast, one that doesn’t stress the supply of materials, labor and field expertise.  We need to re-acclimate to regular business, not get greedy, but get better. We don’t need a boom; we just need a rising tide. How about a manageable climb instead of a sprint followed by a tumble?

Don’t build your success on a good economy; build it strong enough to work in a bad one.  Build your business on solid principals and sturdy foundations. Iron out the details while you have the time to do so, and set your course for success. You have survived some of the toughest times on record. We’ve all learned plenty of lessons in what felt like the hard way.  Let’s put those hard earned lessons to work!

Money will never make you happy, but no money is guaranteed to make you unhappy. The quickest way to lose money in business is to leave business details open ended and not pin them down in a legal document. Spelling out expectations clearly is the ounce of prevention that keeps you from having to come up with the expensive pound of cure.

Think of it, we all hear what we want to hear and everyone would rather hear free than have to pay for it. The old phrase “Well begun is half done” applies. You need to define the elements of a job in a contract that you and your client can review, understand and sign off on. If you don’t put it down in writing, you create a “He said, she said” situation that no judge wants to listen to. Here are the simple elements that any contract must contain to be valid and useful:

Scope of Work- you must describe what the extent of work to be done under the contract will be. This allows you to the differentiate changes and additions to the original contract. Please document those changes or additions in writing with pricing.

Price- What is the total amount of the contract so there is no misunderstanding? A contract isn’t a contract without a contract price.

Schedule- spell out completion dates and then further spell out extended dates on change orders.

Payment schedule- what are your expectations for when you will get paid and do you break it down by phase completed or time elapsed?

Name and address – of the owner as well as the project address.  You have to know who you are dealing with.

Here are some other important items you should consider adding to your contract:

Provision for legal fees - in the event of a dispute that goes to court.

Late fees - in the event of slow payment.

Jurisdiction definition- in the event that a matter goes to court, you want the case to be judged locally and not in your client’s home state which could cause you great inconvenience. Wording to the effect of “Parties agree that jurisdiction over any issues arising from this transaction will be exclusively in the courts of Barnstable County.”

For your sake, and your client’s sake, put things in writing and don’t leave room for misunderstanding or misinterpretation. Handshakes are wonderful….after everyone has signed on the dotted line. Don’t try to show the judge your handshake. He might wave you off!

I’ve always tried to follow a five word business philosophy, “Use common sense, no surprises”. Sounds simple doesn’t it? You know from running your own business that things look more complicated the deeper you get. The most important thing we must all remember is that it’s up to us to keep it simple. Spell it out now and the chances are you won’t be telling it in court later. One of the biggest areas of contention in the building business is still the contractual side of the business. Problems arise most frequently because things aren’t spelled out properly or to the understanding of both parties. Please remember the basics of missed communication:

· People tend to hear what they want to hear.

· Most people, though adult, still believe in miracles and think that by wishing hard enough, something will happen the way they’ve dreamed it.

· People are perversely willing to spend more time after the fact assigning blame than they are in planning beforehand to prevent a problem. Blaming others carries no responsibility, planning does.

The best business people I deal with are careful to make sure the details are understood and they follow- up to make sure. Here are some tips for making sure you get the correct points across:

· Write everything down, give a copy to your customer, and keep one yourself.

· Use drawings, photographs, etc., to better clarify what you mean.

· Time and date your notes.

· Have your customer initial or sign orders, change orders, etc.

· Get a deposit (people pay much better attention when their money is involved.)

· Summarize your meeting points in a fax or e-mail and send your customer meeting minutes so they have a second chance to hear the message.

· Be consistent in your follow up- it sets a tone and defines your relationship.

· Never assume the ball is in their court and wait until it comes back to you.

· Ask them to tell you what they heard you say.

All of the bullet points above are small parts of you setting the tone for your relationship with your customer. They are proactive, not reactive. They begin to define the way your relationship is likely to develop. People are constantly testing and evaluating each other at the beginning of a relationship. If you use organization and follow-up to present yourself to your customer, they have clear points with which they can begin to understand you. Please understand that the reason we have to practice these points is that they don’t always feel natural.

In practicing proactive communication, you are taking the lead and there’s always more of a feeling of risk in the lead than when you’re hanging back in second place. Remember, the best thing about being in the lead….. the view is much better!

It certainly seems like we can’t resist a diet of stress, intrigue and suspense. Much like that Bavarian Crème donut just won’t stop beckoning when the only thing you came in for was a cup of coffee; we somehow get attracted to a lot of things that really aren’t the things we should be snacking on. The lure of bad habits or forbidden fruit is always strong and the tug of war of human urges versus common sense is the familiar theme of so much of our lives. The temptation to make the plot thicken, to “villainize” change, or to dread things that may never even come to be; is what we do so naturally. “How much have cost us, the evils that have never happened?”- Thomas Jefferson

Sometimes we agonize over things at the moment that will be hard to even remember six months later. That’s my formula, if I won’t be able to remember it in six months, is it really worth getting that worked up over right now? Change is inevitable, but change is inevitably difficult to accept.

In our local market place on Cape Cod, there has been a big change in the way Andersen windows and doors will be sold. There will be one less large retailer selling Andersen but still plenty of others left to service the market. When this change took place, many people called us and said, “You must be thrilled” or “This has got to be a great opportunity for you.” Our answer is we are never thrilled to see another company go through the painful process of ending a long term supply relationship. There, but for the grace of God, goes any one of us. Also, in terms of opportunity, every new day is an opportunity, but opportunity dresses in work clothes doesn’t it? We aren’t waiting for opportunity to show up and favor us. Opportunity simply gives us the chance to get to work and prove we can make the right things happen, take care of our customers and improve ourselves. Opportunity isn’t a gimme, it’s just the beginning of a process.

We’re excited that some new customers will get a chance to learn more about our incredible deep bench of window and door talent in our Shepley Showcase. We have window and door specialists who rival anyone in the industry. We have a fabulous service department led by Mark Hambly. Our service folks consistently have some of the top customer satisfaction scores in the country according to Andersen and their satisfaction surveys. We couldn’t be prouder of the people who get it right and fix it right.

But the most important parts of all this, are that we have a responsibility to support the Andersen brand in this market and that we don’t take anything for granted. We are motivated not to sit and wait for opportunity to knock, but to raise the bar ourselves on how windows and doors are sold in this market. Even if people are happy, we’d like them happier. Whatever we are today, we would like to be better in the future. With your confidence and communication, we can do anything you need us to do. We look forward to the opportunity to work for you! Thanks for your business!

I realized, while sitting down to write this, that at least phonetically there isn’t a lot of difference between doom, gloom and boom. I think a lot of the difference is state of mind.

We have been wringing the last drop out of terrorism, the stock market, corporate greed and misbehavior. The pundits have worn the term “recession” like a comfortable old jacket that has been around so long it has holes in both elbows. Newspapers and the media are in a feeding frenzy for bad news—be it social or economic. Why is negativity so absorbing?

As parents, we learn a lot about human nature. Small children are really just miniature adults with less in the way of communication and motor skills, but humans all the same. My favorite age in kids is about three-years-old. The view into a three-year-old’s life is fascinating. Their simplicity is their charm. A three-year-old wants to improve his control of the world around him, but doesn’t realize that control is elusive. Children, early on, may start to think that the only way to totally control anything is to destroy it. Anything other than total destruction requires maintenance.

If he wants to control the conversation, he can… with an ear piercing shriek. If he wants to control the table top, he can… clear it of all objects with a sweep of his extended arm. Destroying uses fewer resources and its usually final, sort of a “‘nuf said” approach to life.

Terrorists get their attention the same way three-year-olds do, but with bigger tactics and more gruesome results, yet they gain control—with no responsibility. The news media employs tactics that may not be all that different than the terrorists they publicize. They get your attention by whatever means necessary. Apparently the networks by now are so desperate for news to report that someone jokingly asked an official Pentagon spokesperson if they would be willing to read the weather report to fill airtime. The offer was declined, I’m happy to say.

We can’t forget that three-year-olds, in their simplicity, still have a lot of natural balance. They still have a sense of wonder, they absolutely believe in Santa Claus, and they have a sense of how to control in very positive ways, too. I am amazed by the power of a three-year-old’s hug or kiss, the energy in their laugh, and their thrill in a game of hide and seek. We adults often lose our perspective in worries, bad news, and the hope that someone else is worse off than we are.

My New Year’s resolution… to not to let the terrorists, the naysayers, the doom and gloomers get any more of a toehold in my life or the lives of those I love. For this whole year, I’ll resolve to spend more time with people who say, “If I were any better, I’d be twins” and no time at all with Geraldo Riviera, Jerry Springer, Maury Povich or people who act like them, thank you.

Go ahead, turn gloom and doom into boom! Liberate the three-year-old inside you! Live for what you want to be, not what you’re scared of becoming. Have a Happy and Prosperous 2102 from all of us at Shepley!

Sometimes we agonize over things at the moment that will be hard to even remember six months later. That’s my formula, if I won’t be able to remember it in six months, is it really worth getting that worked up over right now? Change is inevitable, but change is inevitably difficult to accept.

In our local market place on Cape Cod, there has been a big change in the way Andersen windows and doors will be sold. There will be one less large retailer selling Andersen but still plenty of others left to service the market. When this change took place, many people called us and said, “You must be thrilled” or “This has got to be a great opportunity for you.” Our answer is we are never thrilled to see another company go through the painful process of ending a long term supply relationship. There, but for the grace of God, goes any one of us. Also, in terms of opportunity, every new day is an opportunity, but opportunity dresses in work clothes doesn’t it? We aren’t waiting for opportunity to show up and favor us. Opportunity simply gives us the chance to get to work and prove we can make the right things happen, take care of our customers and improve ourselves. Opportunity isn’t a gimme, it’s just the beginning of a process.

We’re excited that some new customers will get a chance to learn more about our incredible deep bench of window and door talent in our Shepley Showcase. We have window and door specialists who rival anyone in the industry. We have a fabulous service department led by Mark Hambly. Our service folks consistently have some of the top customer satisfaction scores in the country according to Andersen and their satisfaction surveys. We couldn’t be prouder of the people who get it right and fix it right.

But the most important parts of all this, are that we have a responsibility to support the Andersen brand in this market and that we don’t take anything for granted. We are motivated not to sit and wait for opportunity to knock, but to raise the bar ourselves on how windows and doors are sold in this market. Even if people are happy, we’d like them happier. Whatever we are today, we would like to be better in the future. With your confidence and communication, we can do anything you need us to do. We look forward to the opportunity to work for you! Thanks for your business!

Most in the building trade can agree that we’ve had a great spring as far as business is concerned and are optimistic for what lies ahead. However, there is a little anxiety as to where the market may go. Take into consideration that, halfway through 2012, the Random Lengths Framing Composite (the industry indicator for lumber market conditions) is holding steady in the $340’s, as compared to all of 2011 where it limped along with an average of $270, rarely cracking the $300 benchmark mill break-even point. With June as a direct comparison, the composite was at $262 last year as compared to $341 this year, a remarkable 30% increase. However, it’s not reflective of the volume of building that’s occurring as much as it is indicative of a short supply. The National Association of Home Builders and Macroeconomic Advisers are predicting that housing starts are only expected to increase by 17% in 2012 to 715,000 (as compared to 610,000 for 2011) and we are nowhere near the pre-recession 1 million plus housing starts that we used to enjoy. As we have experienced, a little bump in business can have a profound effect on the market and this past spring can be considered a taste of things to come. As a factor of the depletion of operational lumber mills, ramping up production to meet sustained demand will lie in the hands of the mill owners, many of which are reluctant to reopen mothballed facilities (or even add a second shift) in the event that demand drops off and prices slide. Mills only make a profit when the Random Lengths Framing Composite is over $300, so contributing to its decline is not one of their objectives. For dealers, obtaining competitively priced lumber when needed may force more to relinquish the habit of relying on reloads and instead require them into investing in larger inventories….or finding substitutes.

From all perspectives in the building industry, these are still tough times to make a profit. If obtaining quality wood comes with exorbitantly high prices, dealers will look for ways to shave their expenses in order to remain competitive. One method is to turn to alternative products that are similar in make-up, but of a lower quality (a tactic that we avoid). When it comes to maintaining our standards with lumber, we rely upon the feedback of our receivers, order pickers, drivers and most especially, you our customer. We have learned what grades, species and mills are favored (and which ones are not) and we purchase our lumber accordingly. As a rule, we buy only SPF (Spruce-Pine-Fir), #2 & Better stock as it is the benchmark in quality for our region. We buy only kiln-dried (KD) products and not green (KD products are much more stable and not prone to mildew or insect activity) and will not buy grades that are less than #2 and Better, such as #3 and Utility. We also avoid the lesser quality aspects of the species of White Fir and Hem-Fir, which have a propensity for splitting, checking, warping and are prone to mold growth. With some dimensions, however, SPF is not available so we will turn to Doug Fir, which is the next best quality to SPF. As lumber supplies tighten and prices escalate, these lesser grade alternatives to SPF have a tendency to become more common as they can be more readily available at a significant price concession, which is entirely reflective of the grade and specie. Although the lower pricing can be attractive, the waste factor is the largest detriment to using the Hem-Fir and White Fir products as what you save on the front-end will be easily lost on the back-end in terms of cull. Our method in avoiding escalating prices and shortages are to stay in tune with current market pricing conditions and to buy enough at the right time to cover our anticipated needs. Through our relationships with lumber traders, it has been an effective practice.

It is our goal and commitment to provide you with competitively priced, quality lumber and we are well positioned to handle all of your needs. Should you have any questions or concerns, please remember to contact your lumber sales person and thank you for your business.

The best business people I deal with are careful to make sure the details are understood and
they follow- up to make sure. Here are some tips for making sure you get the correct points across:

-Write everything down, give a copy to your customer, and keep one yourself.
-Use drawings, photographs, etc., to better clarify what you mean.
-Time and date your notes.
-Have your customer initial or sign orders, change orders, etc.
-Get a deposit (people pay much better attention when their money is involved.)
-Summarize your meeting points in a fax or e-mail and send your customer meeting minutes so they have a second chance to hear the message.
-Be consistent in your follow up- it sets a tone and defines your relationship.
-Never assume the ball is in their court and wait until it comes back to you.
-Ask them to tell you what they heard you say.

All of the bullet points above are small parts of you setting the tone for your relationship with your customer. They are proactive, not reactive. They begin to define the way your relationship is likely to develop. People are constantly testing and evaluating each other at the beginning of a relationship. If you use organization and follow-up to present yourself to your customer, they have clear points with which they can begin to understand you. Please understand that the reason we have to practice these points is that they don’t always feel natural.

In practicing proactive communication, you are taking the lead and there’s always more of a feeling of risk in the lead than when you’re hanging back in second place. Remember, the best thing about being in the lead….. the view is much better!

One of the most notable interruptions came as an unfortunately devastating and fatal mill explosion on April 23^rd at the Sinclair-Lakeland mill in Prince George, British Columbia. The Sinclair-Lakeland mill, up until the time of the explosion, had produced over 10% of the United States’ Western stud supply. In response, stud pricing immediately increased by as much as $35-$40/mbf as both Eastern and Western studs were already in short supply. Traders quickly advised dealers to cover their stud needs over a 60 to 90 day period, clogging up order files and pulling any scant remnants of available inventory out of the market.  However, further exacerbating the situation is that, being the second recent explosion to occur at a lumber sawmill, the Canadian government mandated that an inspection of every lumber sawmill in British Columbia be done by May 9^th to ensure that proper dust collection safety precautions were in place in order to mitigate the chances of another explosion. This, in turn, created delays in production as any mill that did not pass inspection had to rectify or implement the necessary safety precautions before they could start producing lumber again.

On the East coast, the mild winter and the strength of sales depleted log inventories, leaving some mills unable to produce any lumber products at all until they were able to reload their log decks (in some cases, not until late June or July). In addition, an over-abundance of wood chips stalled production. Modern mills waste nothing, so bark, wood shavings and sawdust (commonly referred to as “chips” in the industry) are sold to landscape wholesalers, paper mills and farms. As lumber has been in a depressive price state since the Recession, chip sales have been the back-bone for the profitability of many sawmills. To quote Stephen Long from his article in the Northern Woodlands publication (11/2006): “Being able to find markets for bark, slabs and sawdust, all of which used to be treated as waste, has become the sawmills’ key to staying alive – or even thriving – in an increasingly competitive international marketplace. In the words of one enterprising mill owner, he needs to be efficient at turning 5 board feet of log into 6 board feet of product”.

Sales of chips to paper mills create the bulk of the resale portion of the milling process and, as a result, sawmills rely heavily upon the consumption of wood chips by paper mills, who turn the wood pulp into paper. However, as society continues to become ever more paper-less, there is a lesser demand for wood chips. As a result, mills are having a tough time selling their chips. Over the course of the last six weeks, three paper mills have either put saw mills on a heavily reduced allocation or refused taking deliveries altogether. According to Thom Rafferty at Millbrook Lumber, “…the sale of chips by a lumber mill to a paper mill is a major source of revenue. Without the ability of a lumber mill to sell their chips to a paper mill, the lumber mill simply cannot operate remotely close to a profit. For example, a mill producing 75 to 100 million board feet annually, produces approximately a truck load of chips every hour which fetches roughly $1,000 from a paper mill.”  The lack of being able to sell the chips inevitably forces the mill to stop producing lumber.

More than 50% of sawmills that were in operation prior to the U.S. recession are now closed; the lumber supply chain has been thinned out so much that any moderate changes in supply or demand have profound effects on supply, lead-time and quality. Factor in the lack of truck drivers, and you’ve got a real challenge on your hands. That challenge has been faced head-on by Shepley, as we strive to be at your service and provide you the quality lumber and building materials that you need when you need them.

As always, please feel free to contact us for any issue or concern you may have with your building materials and know that we make it our collective goal to deliver on your satisfaction. Thank you for your business.

Whether or not one chooses to be a bull or a bear in this market depends on what you believe are the contributing factors that indicate growth (or lack thereof). Job growth is a major indicator for us as it signifies the potential of future home ownership, and any positive news is taken seriously. One such positive example is the announcement of the U.S. Labor Department on April 5^th that, according to March’s unemployment benefits numbers, “weekly applications dropped 6,000 to a seasonally adjusted 357,000…the fewest since April 2008” (Rugaber, AP 04-06-12). The unemployment rate generally gets adjusted when unemployment applications drop below 375,000, so news that a reduction in applications is encouraging. In addition, the unemployment rate has dropped from 9.1% in August to 8.3% in February, the lowest it has been in three years. As a result, analysts have reported that the retail sector has recently grown revenue 4.1% and consumer spending increased in February to the highest level in seven months. Building material suppliers in particular have enjoyed the recent spate of home improvement expenditures, a large portion of which were postponed due to the recession.

On the flip side, the bears may not be quite so willing to accept that happy days are here again as negative economic articles seemingly appear across the page from every positive one. For instance, shortly after the announcement by the U.S. Labor Department that unemployment applications were on the decline, the Bureau of Labor Statistics announced that a fewer-than-expected increase of 120,000 jobs were added during the month of March, setting off fears and concern that we could be seeing the start of a new trend of a plateau or decline in job growth. On top of the alarmingly fast rise of the cost of fuel, the lack of growth in the job market would make one reticent to invest or spend, further curbing any additional economic growth. Positive and negative comparisons can be made against a large variety of economic factors, but the lingering damage of the recession keeps a cloud over the fact that a speedy economic recovery is still at bay.

However, due to low mortgage rates, low property values and the cheap price of lumber, it is still an ideal time to build, buy or remodel a home and wise investors are savvy to that. In spite of the recession, the American population has continued to grow and live longer, exacerbating the need for housing. Due to the impact of lost jobs and homes during the recession, rental properties have escalated along with rental fees, but it is once again becoming more feasible and less expensive to buy or build a home than it is to continue to rent. As the job market grows and housing inventories decline, the need for building will grow and those who can see the value will continue to invest in the wonderful real estate that only Cape Cod can offer.

As always, you can rely on Shepley to be your consistent building materials supplier. If there is one thing that Tony Shepley has instilled in all of his employees, it is to strive toward excellence and deliver exceptional service and quality product on a consistent basis. Based on that premise, we can assure you that we have the quality wood at competitive prices that will help you exceed at your job, and we look forward to the opportunity to serve you. If you have any questions or concerns regarding your project, please be sure to contact your sales person. Thank you for your business.

For now, supplies are meeting current demand. However, according to an article written by Peter G. Hall, Vice President and Chief Economist of Canadian Export Development, the United States housing surplus is shrinking by almost a million units per quarter while housing starts remain almost half (675,000) of what they should be (1.4 million) in order to keep up with the U.S. population growth. The economy is rebounding and there will be a release of pent up demand for homes, but what has got us all concerned is a “snap” in that release that could potentially bring whatever growth we could enjoy to a halt. Canada does have enough wood to meet demand, but it happens to be in tree form at the moment. Mills cannot simply harvest a tree from the forest and fire up their saws to promptly produce lumber as the drying, milling and shipment process has to be followed. Unfortunately, there isn’t any way of expediting the process, so product needs to be in the process before demand is placed in order to meet the regular lead times and price expectations.  Again, the balance of supply and demand is everything in the market and therefore predictions of what business to anticipate and what levels to harvest, produce and buy are at the forefront of everyone’s minds in the supply chain. This has been a very unusual year for us so far for business as, historically, the months of January and February are slow due to weather conditions. With the warmer weather has come a higher volume of sales at an unexpected time and it made our crystal balls cloudier than they were before. At a recent national buying show in FT Worth, Texas, lumber dealers were being grilled by traders and mill representatives about what business they are anticipating over the course of the next quarter (and beyond) as they are desperately trying to determine what direction to take for their supply levels. For the most part, the replies were positive in that “this year will be better than last” but that’s merely an easy answer to an obscure question as we’re all searching for specifics.  With U.S. job growth exceeding 245k per month over the past three months and expected to maintain a pace of 200k for each month for the rest of the year (Barclay Capital), there is a lot of excitement that business will maintain and even grow. However, the Gross Domestic Product isn’t growing at the same pace which may be a better indicator that there is a plateau in sight. Sage advice is to maintain excellent communication, pay close attention to market conditions and use your best judgment.

Excellent communication is a commitment that we make to you so that we can help each other in this business relationship and is also what we strive for internally in order to determine what positions we need to take in order to protect your and our interests in lumber inventory. We cannot predict exactly what we will encounter in the coming months as far as the business climate is concerned, but rest assured that we take notes and act upon the feedback that we receive from you. It is in this endeavor that we are able to position ourselves above our competition and provide a level of service to you that we hope is unparalleled. I am pleased to say that, through our relationships and clear communication efforts, our inventory is on very solid footing in that it is excellent quality and price competitive. We appreciate the feedback that you can give to us and value your perception of the market. On behalf of all us, we most sincerely appreciate and thank you for your business.

A builder’s job is not an easy one, with so many variables to control and decisions to be made.  Any job with this many component parts requires a good critical path plan to ensure successful results.  A critical path is simply the pre-planned succession of events from initiation through completion.  When you think about any building, it shares a basic similarity with almost any other building.  They virtually all begin with engineering and design, require planning for utilities and waste disposal, need a foundation on which to start, and are usually framed in a conventional method using studs, headers, joists and rafters.  Sure there are variables, but there are usually more similarities than differences in the basic components of buildings in our area.

Cost control is always a hot topic.  We spend a lot of time quoting projects and a lot of that time straightening out bid lists that compare apples to oranges and oranges to pears.  We see a lot of “bottom line” shopping in which customers (both yours and ours) go straight to the final number without really knowing what is involved in producing the bottom line.  We’ve all seen people get fixated on the price that they want to pay, sort of like the homeowner who swears they can build the house themselves for $65/sq. ft.  Ten people can tell that homeowner that it can’t be done, but when price denial sets in, the common sense talk falls on deaf ears.

Price denial in our business takes on interesting forms.  We see many people who are obsessed with the price per piece of what we sell but who don’t make any effort to control the number of pieces. Bottomliners may even figure that a quote with fewer pieces is a cheaper quote.  It certainly isn’t, if it doesn’t have enough of those pieces to do the job, or the correct size or type of pieces.  How good is that lumber price when you have a dumpster full of scrap?

We set ourselves a goal several years back, of creating a new approach to lumber and building material estimating.  In the old school, the lumber supplier gives the builder a “budget” quote, which is a rough calculation of what they estimate it should take to build the house.   Today, we have taken a different approach.  We create a “parts list,” which details all the necessary components in the house and breaks down their use and location, providing the general contractor with a control document and the framer with a working list.  By clearly spelling out all the details, listing assumptions we have made and questions we need answered, we have begun the planning process for budget and delivery.  It is still up to our salespeople to pin down the answers and to verify the assumptions.  If we do this before the fact, we can help provide you control. If we wait until after the fact, the horse is figuratively out of the barn.

The work and decision making must all be done at some point during the job.  The weakness of how it has often been done is that it is much more expensive to make decisions and changes in the field than it is to make them on paper.  We consider it our job to provide the framework for making those decisions up front.  Anyone who has ever had a job stop because no one could make a decision on the roof shingle type or color will know what I mean.  How about that complicated trim detail that needs a week of shop time, but your framer needs it this afternoon?

We want to do the heavy lifting.  We want to give you and your framer a document to check, not to figure, and to help answer the questions up front that will keep the job running smoothly.  It is our job to help build consensus in advance as to what we will need on your jobsite.  We would prefer that you don’t end up with an extra lift of lumber and one of plywood sitting on the job.  It encourages theft and does not discourage waste.  You don’t need the risk exposure created by either one.

Please think about this…what difference does the price per piece make if you can’t control the number of pieces used?  You should know, as you go, how you are doing compared to your  budget.  You should not have to wait until the end of the job to see how big the scrap pile was or how many dumpsters you had to pay for.  Our estimating department and salespeople are ready to help you take control of the ordering process and, therefore, control of your profits.

Brisk business has put a strain on already thin lumber inventories. As we near spring, concerns about covering inventory needs has stimulated even more buying as traders have been advising retailers to cover needs for at least 30 to 45 days. The caveat to protecting yourself in this manner is the significant drop that the market can have in a short period of time. For instance, the plywood market endured a $30/m + increase in the space of three weeks in December 2011 at a time when inventory levels were painfully thin; thin enough for some our suppliers to have been out of some sizes altogether for the entire month of January. As a reaction to replenish their inventories, they bought heavy on trucks that were six weeks out…..only to watch the market deflate $30/m and more during the month of January. As a result, the panic reaction to get a lot of inventory on order while prices are escalating can easily punish you with higher-than-market-priced inventory once shipment arrives. Lumber mills have not produced enough inventories to build up an ample enough supply to meet any significant demand and, with the mild winter we’ve had, what is produced is quickly shipped out to retail lumber yards. As a result, reloads are remaining remarkably thin on inventory and obtaining tallies tailored to exact needs is a real rarity. In addition, most mill orders are taking 2-3 weeks at a minimum to arrive (which is plenty of time for a significant swing in market pricing). Further exacerbating the supply availability is the fact that trucking is still not able to meet up with the demand of shipments. So often an order is late that the new strategy is to order material with a request date that is far ahead of when it is actually needed, in the hopes that it will arrive when you want it.

Our traders keep their ear to the ground on all daily activity of the market and offer up the best advice they can muster, and the common and constant warning that we are hearing from them is that the “market is severely under-bought”. To be “severely under-bought” means that there aren’t enough inventories at any level of the supply chain (mill, reloads and retail yards) to fulfill demand at a service level that is expected at a “normal pace”. As a whole, there is a six month’s supply of lumber in the market based upon current levels, but what will happen if business hits a level that is above normal? That is the key part, as what business is expected to be is still the great unknown factor, and one that mandates retailers and wholesalers alike to keep their fingers on the pulse of business and react not too soon and not too late, but to order as needed. This strategy is keeping the inventory levels low, but there has been a quantum shift in attitude throughout this industry that may help keep a purchasing momentum going into the spring that may shift the dynamics of the current lumber supply. Not the least of which being China’s demand on better grades of wood, supply may be significantly affected by the American market as it may finally have its draw up on  home building (which will bring to us the welcomed set of new challenges of allocating materials).

As we pull out of winter, lumber prices are holding steady with the potential to creep higher. Even if demand slips, we are not expecting pricing to come off much as mills continue to limit supply based upon cautious buying at the reload and retail levels. Although the market may be severely under-bought, we can say that we are not. Through our contracts, well-developed relationships and attentiveness to our inventory, we can guarantee you that we will have quality wood at competitive prices on hand when you need it. It is our commitment to you that we are the company that “does it right” and that you want to buy from. We realize that we must earn your business every minute of every day and it’s a challenge that we gladly accept as we consider every order we earn a victory. Thank you for your business and, should have any questions or concerns, please remember to contact your lumber sales person.

Very strong lumber sales in New England in December gave way to moderate demand in January. Thin inventories at the reload and dealer levels pushed an unanticipated demand on mills, and obtaining material was difficult even with the mild weather. As we’ve become accustomed to, a lack of “putting a truck under the inventory” has been the leading cause for late shipments, although production is certainly an issue as well. Prices remained firm to up, depending upon the availability of the item and the requested tally. Dealers are still very under-bought against the market as they know that whatever little activity that is occurring can come to a screeching halt if winter makes a dramatic appearance. The fear of owning too much inventory is proving to be a weaker argument, though, as prices are firm and availability is spotty. Mills are trying to keep up with the demand, but are still only producing as much as wholesalers and dealers are willing to buy. As a result, there is very little material in current production that is going to surplus inventory. This has had the greatest impact on the plywood market, which simply has not been able to keep up with demand. Plywood prices have been climbing, lead-times have grown substantially and many dealers and wholesalers have completely run out of inventory. In particular, ½” x 4 x 10 CDX and Advantech have been very difficult to obtain over the past six weeks and continue to be a problem.

One of the more common sentiments heard around the holidays was to hope for a better and busier 2012 as 2011 was particularly tough for many lumber professionals. However, the general consensus amongst the industry is that 2012 will be a repeat of 2011, but with the expectation that lumber pricing will stabilize (a concept that hasn’t been around since before the recession). Lumber pricing has ridden a roller coaster ride since the recession, but with many more low valleys than moderate peaks. The stabilization of the economy is expected to keep annual housing starts in excess of 650,000 and, based upon numerous mill closures in recent years and increased global demand for lumber, a real-time shortage of lumber is expected. For many in the supply chain, the projected shortage is bringing the anticipation that there will be an end to margin erosion as it has been, by far and large, the result of deflating prices due to a lackluster demand and a surplus of inventory.

In the meantime, lumber prices are still historically low. To clarify what “low” lumber prices mean, we need to compare them to the averages that we had seen during the peak of homebuilding.  As of print, the Random Lengths Framing Composite (the price barometer for the lumber industry) is at $279.  The average composite price from 1996 through 2006 (which was the peak of homebuilding), was at $368, a 32% increase over today’s prices. Also consider that today’s composite is within 2% of the 5 year average between 2006 and 2010 (our great recession period), which was at $284. Unlike so many other commodity items that seemingly have double-digit increases overnight, lumber is still a real bargain. When factored along with low interest rates and real-estate values, lumber prices make homebuilding an even a more attractive venture, especially right now.

As we head into our last stretch of the winter season, business continues to be unexpectedly better than anticipated and material is moving. Replacement stock is firm to market levels, but has the potential to fluctuate depending upon the weather and continued demand. The general consensus is that prices are expected to remain at least firm over the next six weeks (even if the weather makes a turn for the worse) as production will take a while before inventories are stocked to normal levels. Here at Shepley, we had bolstered our lumber and plywood inventories prior to the rise in the market so we are well-stocked with quality material at very competitive pricing.  Our commitment to you remains the same as we promise stock quality products at competitive pricing for when you need them. In addition, we will keep you well apprised of any market conditions that may affect your business. Please remember to contact your sales person should you have any questions or concerns and, on behalf of all of us, thank you for your business!

The piece below is a classic for our times. Never do we question the meaning of everything more than in times of challenge and these are certainly times that challenge everyone. Sometimes we have to remind ourselves of the very basic elements that are really important and we have to keep ourselves from getting sidetracked by the things that aren’t. This is a piece we have published before but is definitely one that deserves re-reading from time to time. Please enjoy it.

When things in your life seem almost too much to handle, when 24 hours in a day are not enough, remember the mayonnaise jar… and the beer.

A professor stood before his philosophy class and had some items in front of him. When the class began, wordlessly, he picked up a very large and empty mayonnaise jar and proceeded to fill it with golf balls. He then asked the students if the jar were full. They agreed that it was.

So the professor then picked up a box of pebbles and poured them into the jar. He shook the jar lightly. The pebbles rolled into the open areas between the golf balls. He then asked the students again if the jar were full. They agreed it was.

The professor next picked up a box of sand and poured it into the jar. Of course, the sand filled up everything else. He asked once more if the jar were full. The students responded with a unanimous yes.

The professor then produced two bottles of beer from under the table and poured the entire contents into the jar, effectively filling the empty space between the sand. The students laughed. Now, said the professor, as the laughter subsided, “I want you to recognize that this jar represents your life.”

“The golf balls are the important things – your family, your children, your health, your friends, your favorite passions – things that if everything else were lost, and only they remained, your life would still be full. The pebbles are the other things that matter like your job, your house, and your car. The sand is everything else – the small stuff. If you put the sand into the jar first,” he continued, “there is no room for the pebbles or the golf balls. The same goes for life. If you spend all your time and energy on the small stuff, you will never have room for the things that are important to you. Pay attention to the things that are critical to your happiness. Play with your children. Enjoy your friends. There will always be time to clean the house and fix the washing. Take care of the golf balls first, the things that really matter. Set your priorities. The rest is just sand.”

One of the students raised her hand and inquired what the beer represented. The professor smiled. “I’m glad you asked. It just goes to show you that no matter how full your life may seem, there’s always room for a couple of beers.”

Some dealers took a position in December to buy enough wood to stretch them through the mill’s holiday shutdowns and curtailments (well into mid and late January). Considering the recent spate of business, this was a wise move as, for the first time in many years mills went into shut-downs with full order files and little to no wood on the ground. These full order files mean that, when the mills re-open after their shut-downs, all production will be directed toward filling presold orders and not towards building a surplus. As a result, the dealers who did not buy ahead may not be able to fill their needs and may be forced to pay premium prices on sub-par wood and tallies in order to get the wood fast, if they can get it at all.

Although demand in this market fluctuates constantly, a shortage of wood (and a lack of a way to get it into yards) will drive prices upward. Factor in any possibility of poor weather conditions prohibiting access to logs, the supply shortage could be further exacerbated and potentially escalate prices further. As a precaution to shortages and price hikes, we had invested in our inventory in December in an effort to obtain pre-increase pricing for the quality wood that you demand. For the first quarter of 2012, we anticipate prices to be firm to up based upon market conditions, which are currently a tight supply and a moderate demand.

Another factor that may be affecting our available supply in 2012 is that China has awoken to the fact that buying a better quality product produces a higher yield. As a result, their recent purchases of higher grades of lumber from Canadian mills (even top-shelf “J” grade) are cutting into what is available to the U.S. market. Over the next five years, China proposes to build 85 million housing units (or, as compared in square footage to the average American housing unit, approximately 42 million U.S. housing units). Once cresting regularly over 2 million houses per year, the United States is still working in the range of just over half a million. With such a low ratio of building as compared to the Asian market, the U.S. market has increasingly become more irrelevant to Canadian production. According to Pat Bell, Canadian Minister of Jobs, Tourism and Innovation, China alone is taking 30% of British Columbia’s total lumber production. As a lumber supplier that is committed to carrying a higher quality product (with respect to the fact that money and time is wasted on inferior products), we understand why China is moving towards the better grades. Anyone who’s experienced “bargain” priced wood can quickly attest to the fact that cull piles are an expensive result. Nonetheless, the demand on higher grade commodity products is a phenomenon that we will be watching closely.

Although some market indicators are clearer than others, we use our best judgment based upon our strong relationships, current facts and gut instinct. We take what we feel are the necessary steps to protect our inventory from shortages and out-of-control price hikes by buying volume when we see an opportunity. In addition, we negotiate contracts with our preferred lumber, plywood and pressure treated suppliers to guarantee a supply at competitive market rates. As we enter into a new year, we are very confident that we have great quality products that can offer a higher yield than what many other competitors offer, yet at very competitive pricing. To this end, we are confident that we are in a good position to service your needs, despite whatever this winter may bring. Please remember to stay in close contact with your Shepley sales representative should you have any questions or concerns and, most sincerely, thank you for your business.