October29

Lumber Update – November 2019

By Paul Rogers

Another month has passed of a flat lumber market, and the anticipation of a rally that would spur pricing upward is fading. Tight supplies, not necessarily demand, had kept prices propped up. It became apparent as the month ended that traders were getting a little nervous, as strong positions they had taken in early September with anticipation of a robust fall (and climbing prices) were now becoming a liability. As a result, more offers poured in to retailers, who were carefully reserved on what they would take on as year-end inventories were right around the corner. Although few want to be loaded with material to carry in to January (retailers get taxed on surplus inventory carried in to the New Year), that didn’t mean there wasn’t buying going on. Anticipation of a surge in the market has kept buyers on point for most of the past two months and business has been steady, so the better deals were not passed up. Although (as of print) a rally hasn’t materialized, sales have been very brisk and positive news about the building market (IE: Reuters, “U.S. housing starts, building permits scale 12 year high”) fuels the concept that buying lumber now will be money in the bank down the road. This will be true if the pace of construction surges (as we still have a 2.5 billion board foot deficit of lumber pulled from the market due to mill curtailments and closures), but the supply and demand equilibrium seems to be very much in balance at this time so the tipping point of whether or not a market disruption occurs may come on the heels of additional mill closures or a sudden economic retraction. In the meantime, more inventory is landing in retail yards and winter is coming, so demand may be stifled and quell all talk of a rally. We are currently well-stocked with competitively priced inventory and are confident that, for November, pricing will remain firm for the month, with the outside chance of upward movement as we close in on December.

In this industry, customer service matters, so feedback from our clients is imperative if we want to know how well we are (or are not) doing. The saying goes that “no news is good news”, but is it?  It sounds like an oxymoron but, in our opinion, there is such a thing as a “good complaint”. Although none of us want to be the owner of a shortcoming, not being made aware of the problem prohibits you from making it right, which can be even more damaging. If your customer isn’t inclined to call you out on the problem, you can count on their dissatisfaction to be registered in the form of lost future business, either with them or (even more far-reaching) through their communication with their extended network. Issues that arise put both the customer and supplier in very vulnerable positions. Not only because it’s human nature to avoid conflict, but also because it puts both in the moment where action and responsibility are required.

Nonetheless, in the spirit of addressing the inevitable, taking charge of a situation, improving upon your success, and having a satisfied customer who can sell your virtues for you, it’s best to simply ask them if they were satisfied in doing business with you. Feedback is indeed a gift, but yet there is something quite comforting and disarming when a person you have employed concludes the contract by sincerely wanting to know how satisfied you are with their work. In our industry, where customers are likely spending more money on their projects than anything else that they have ever bought in their lives, we are especially vulnerable and sensitive to a customer’s dissatisfaction, especially for something as personal as a home. We are eternally grateful for your feedback and can assure you that we will employ a great sense of urgency to react, as we know the sense of urgency required on your behalf to take a situation and get it back on track. We are not in the building products business, we are in the people business and our focus is on you, our customer. Our end game is a happy homeowner as well, so you have our commitment that we will strive to find the most efficient and positive outcome for all.

This business isn’t all about complaints. The vast majority of the time, we have smooth successes and very satisfied customers. We’d like to think that we’ve reached this point by being a company that has always had a consistent, vested interest to our customer’s satisfaction. In our 40+ years, we have had plenty of experience being advocates for our customers and are grateful to each and every one who has helped us improve our game. Thank you for your business!

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