April22

May 2016 – Lumber Update

by Paul Rogers

March’s sales momentum carried well into April, with plenty of urgent buying made on the retail and wholesale levels to replenish inventory that was, at times, tough to manage. With few weather-related interruptions and a tone that the “good days” were back, buyers were kept busy chasing trucks and gauging how much and for how long they should purchase to cover their inventory needs. The strong outtake at the retail level, however, didn’t necessarily coincide with the mill’s production: working off of solid order files and with seemingly plenty of wood on hand, pricing reacted moderately and soon flattened. Despite consumption levels being favorable, Canadian mills, in particular, were finding profit levels elusive, with the exchange rate being at a 24% discount to the U.S. dollar. As a result, more effort went towards turning volume so offers and counters were commonplace. Although buyers are still cautiously observing the market for signs of a swing in either direction, it is officially “Building Season” and so sales will likely keep pricing propped up for the month of May.

There is a saying that goes “price, quality or service: pick any two”. Also known as the “Project Management Triangle” (and commonly seen as “cheap, good and fast”), it poignantly argues that you can be offered a cheap price, high quality or exceptional service, but you can only have two of the three. The chief point is that a business cannot deliver on all three and be profitable. There is no doubt that, no matter you are purchasing, you are making concessions for one in order to have the other two. Ultimately, the decision to choose the two that are most important to you and your project will vary from time to time, but what you get for the two you choose will surely sacrifice the third. We bring this up as we know that we all have to follow this model, despite our best intentions. The key to coming as close as you can to achieving the Price/Quality/Service trifecta is to know your budget, know your need and know what value comes from the source. As we are no exception and have to make the sometimes hard decisions (like you) for where to source, we do realize that we must deliver the best that we can on all three points and come up with a delicate balance that sometimes includes some out-of-the-box thinking and/or trial and error. We offer some unique products and services that you may not find at your typical lumber yard, and that is because we hope that, for the two that you must prioritize, you see an exceptional value that trumps what you may find elsewhere.

With this in mind, please do communicate with your Shepley sales person to learn about the quality products and unique services that we can offer you. In addition, we welcome you to voice any suggestions or concerns that you may have in regards to the products or services we offer, so that we can better service you. We are committed to advancing our level of service to you and exceeding your expectations. Thank you for your business!

 

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