Contrary to many suppliers’ expectations, sales were in a slump for most of September as a weak demand kept buyers on the sidelines. In early August, lumber mills had returned from their summer shutdowns with little to no order files (an unusual occurrence, especially considering that many had taken extended breaks) but they had figured that, by Labor Day, dealers would be back in the market to at least replenish and possibly cover their upcoming needs for fall business. However, the lack of orders made it painfully obvious that dealers were content with their inventory levels as receding prices and attractive offers did little to spur them into buying new material. One notable reason for the dearth in business (that also happened to coincide with the mill’s coming back online) was the U.S. Department of Commerce’s final determination that adjustments to the Countervailing and Anti-dumping duties (as part of the Softwood Lumber Agreement (SLA)) would be implemented, increasing the old collective duties from 14.40% to 35.19%. Many dealers (including us) had seen the train coming down the tracks and had anticipated its arrival by buying volumes in late June and early July, a prudent and timely move as lumber mills started baking in the SLA increase shortly thereafter. The outcome is that the early buying (coupled with a sagging housing market and, for a few, opportunities to buy cheaper domestic Southern Yellow Pine as an alternative species) delayed the need to buy any notable quantities of SPF lumber in the interim. As a result, prices had eroded to an uncomfortable level for Canadian lumber mills, who took strides to cut back on production, limit offerings and put more emphasis on selling in their own Canadian market (to circumvent their price disadvantage in the U.S. with the SLA duties). Currently, pricing is bouncing off the bottom and is trending with a much firmer tone as there appears to be a reversal close at hand: dealers are getting back in the game to cover fall business, but mills have tighter supplies and are doing their best to keep negotiations to a minimum. For October, we anticipate prices to be firm and climb as the month progresses.
At this end of the business, we often spend more time estimating jobs than we do buying and selling them. We are often tasked with pricing material with little or conflicting information and have to make calculated guesses for not only the full specs, but how much is needed (including waste), when it will be needed, how much the cost may change (when or if it becomes an order) and what other items may be required to complement the installation. Building materials isn’t exactly the product category you want to be sloppy with, as playing the horseshoes and hand-grenades game doesn’t work well here: the slightest error in being too high, too low, too long or too short in volume, cost or lead time can cost you thousands of dollars and oftentimes the job. We’ve come a long way using technology that helps the quoting process along, but it is usually limited to quantities and components. Once you have that data, the challenge becomes who it will come from, what it will cost and when it will be needed (which often affects the first two challenges, source, and cost). Nonetheless, what matters most in getting the best quotes for your jobs are the employees who work at the company: they must be competent with the latest technology, possess deep industry knowledge and know their customers and market very well. Even more importantly, they must possess common sense, take pride in their workmanship and act with a sense of urgency in respect to your needs. All the above attributes are a prerequisite we feel that we must meet to present you with a quote that we can stand behind.
The spring and fall seasons are normally preceded with a flurry of quote requests from contractors looking to take bids and secure jobs for the upcoming seasons. At Shepley, everyone in our Sales, Estimating and Purchasing departments stays remarkably busy, ferreting out the information needed to produce the most comprehensive dealer-provided quotes that we think are the best in the industry. We realize that we are only as strong as the weakest link, which is why we support each other through a check and balance system that ensures that all quotes are timely, accurate, thorough and with the proper products and brands for the customer and job. We stand behind our quotes as much as we stand behind our products and the services we provide, and the pride we take in presenting our quotes is tangible and universal between all departments and employees. We are grateful to have the opportunity every day to continue to increase or enhance our sales, reputation, and presence on Cape Cod by successfully earning business through our quote process.
When it comes to budgets, quantities, or prices, how much is enough, too little, or too much? Trust that if you have asked Shepley to do your take-off, you can be confident that it is precise and that the prices will be honored for 30 days, despite market conditions. Perhaps we are so passionate and confident about the accuracy, durability and security of our quotes because we know what it’s like not to have it: some businesses prefer to operate loosely and “guarantee” their quotes only up until the moment you hang up the phone with them. However, we realize it’s nothing personal, but rather a choice of whether to lead with confidence and conviction, or to pass the weight of uncertainty on to your customer. Trust that we here at Shepley will carry that weight so that you don’t have to when it comes to bidding your project. Thank you for your business!