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GRADING HARDWOOD – ‘ ‘ONWARD ONWARD AND UPWARD’
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DEPARTME NTS
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Letters to the Editor Inside NHLA Foundation Focus Education Spotlight Insurance Corner Legislative Log Rules Corner
READER SERVICES 4 6 19
President’s Message Executive Director’s Message Calendar
IN THIS ISSUE... 10
GRADING HARDWOOD – ‘ONWARD AND UPWARD’ by Michael Buckley
CONTENTS W W W. N H L A .C O M
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H A R D W O O D M AT T E R S T H E VO I C E O F T H E H A R DWO O D I N D U ST RY
THE MISSION OF NH LA To serve NHLA Members engaged in the commerce of North American hardwood lumber by: maintaining order, structure and ethics in the changing global hardwood marketplace; providing member services unique to the hardwood lumber industry; driving collaboration across the hardwood industry to promote demand for North American hardwood lumber and advocate the interest of the hardwood community in public/private policy issues; and building positive relationships within the global hardwood community.
January/February 2014 ▪ Issue 142 National Hardwood Lumber Association PO Box 34518 ▪ Memphis, TN 38184-0518 901-377-1818 ▪ 901-382-6419 (fax) info@nhla.com ▪ www.nhla.com
EXECUTIVE COMMITTEE
MISSION LEADERS
Scott Heidler Heidler Hardwood Lumber Co. President
Skip Holmes Thomas & Proetz Lumber Co. Unique Services
Pem Jenkins Turn Bull Lumber Co. Vice President
Charlie Netterville Fred Netterville Lumber Co. Industry Advocacy & Promotion
Dave Redmond Highland Hardwood Sales, Inc. Past President 2010–2012
Greg Patenaude Péladeau Lumber, Inc. Membership & Marketing
Mark A. Barford, CAE Executive Director
Brent Stief Huron Forest Products Structure
NHLA STAFF
Gary Swaner Swaner Hardwood Co. Rules
Mark A. Barford, CAE Executive Director m.barford@nhla.com David George Creative Director d.george@nhla.com Renee Hornsby Director of Communications/Editor r.hornsby@nhla.com
The views of contributions do not necessarily reflect the positions of NHLA. All advertisements for Hardwood Matters are accepted and published with the understanding that the advertiser and/or advertising agency are authorized to publish the entire contents and subject matter thereof. The advertiser and/or advertising agency will defend, indemnify and hold any claims or lawsuits for libel violations or right of privacy or publicity, plagiarisms, copyright or trademark infringement and any other claims or lawsuits that may arise out of publication of such advertisement. NHLA neither endorses nor makes any representation or guarantee as to the quality of goods and services advertised in Hardwood Matters. Copyright 2013. All rights reserved. Reproduction in whole or in part without written permission is prohibited.
■■■ Rich Hascher Inspector Training School Instructor John Hester Marketing Director Dana Spessert Chief Inspector Denise Stewart Director of Finance/CAO
COMMITTEE CHAIRS Jeff Durst Hull Forest Products Inspection Services Orn Gudmundsson, Jr. Northland Corporation Communications & Marketing/Finance Mark Mah Upper Canada Forest Products Hardwood Advocacy Darwin Murray McClain Forest Products Continuing Education Jim Reader Downes & Reader Hardwood Co. Membership Joe Snyder Fitzpatrick & Weller, Inc. Rules Jim Steen Pike Lumber Co., Inc. Inspector Training School
For advertising inquiries: Contact John Hester, Marketing Director at j.hester@nhla.com or 901-399-7558.
Kim Vollinger W. M. Cramer Lumber Co. Convention
ADVERTISER INDEX 18 14 17 3
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American Hardwood Industries Brewco Incorporated Brunner-Hildebrand DMSi Software
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Dunavant Global Logistics Group Elimbs, LLC The Jacobs Team Lumbermen’s Underwriting Alliance NHLA Convention
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Pennsylvania Lumbermens Mutual Insurance Company Pike Lumber Company, Inc. U•C Coatings Corporation Wood-Mizer Products, Inc.
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PRESIDENT’S MESSAGE
A BUSY BOARD OF DIRECTORS The holidays are over and it is time to get back to work! I hope everyone had a happy and healthy holiday filled with family and friends. Since my last letter, more than a month ago, a lot has happened within NHLA and the hardwood industry. The first happening from NHLA was a meeting of the strategic planning committee. This year, I asked NHLA past president, Jim Howard to chair the committee. The goal of the meeting was to change the strategic planning process and build a system of review which will aid NHLA both now and in to the future. Thirteen members of the NHLA board generously donated two extra days of their time and talents to help NHLA and the industry with this cause. I am happy to report to the membership that the committee made great strides in achieving the overall goal. After an intense two-day strategic planning session, the entire board gathered for the bi-annual NHLA board meeting at the newly opened Omni Hotel in downtown Nashville Tenn., the site of the 2015 NHLA Annual Convention & Exhibit Showcase. Your board members, and the committees they serve on, were busy striving to deliver increased membership value. Some of the committee actions are as follows: 1. The Membership Committee: Continued to clean up the membership categories on the membership application and introduced for board approval, a very exciting Association partnership with huge direct financial benefits for our members and their employees. (Details to follow after the execution of the contract) 2. The Finance Committee: Reported that year-end projections are still in line for a break even or better budget for the first time in five years for NHLA. 3. The Inspector Training School Committee: After a fall class of 29 students, the largest in years, the committee continues work on the development of a hybrid Inspector Training class. An off-site class to be taught in Michigan this March was also approved, along with a promotional video for the School to be used on social media outlets to reach the current and next generation of inspectors. 4. Hardwood Advocacy: The committee continues to ensure NHLA members are represented in Washington, D.C. with a continued commitment to the Hardwood Federation. The committee also analyzed how the resources of NHLA are being used to ensure membership value. 5. Inspection Services: The committee continues to review the Inspection Services model, both domestically and abroad, to ensure the timely, accurate and impartial inspection of hardwood lumber for our members. 6. Convention Committee: The committee continues to improve the overall convention experience for all attendees. This year’s shortened format was a huge success and will be used again for the next several years. Everyone should be looking forward to the Las Vegas Convention: October 8–10, 2014! 7. Communications and Marketing: The committee continues to fine tune the publications and internet presence of the Association for its members. Make sure you take advantage of the advertising opportunities both domestically, through Hardwood Matters, and internationally, through International Matters!
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See the latest comments at www.nhla.com/nhlablog. On another note, after a couple of years in holding and as a surprise for many, the Hardwood Check Off was released for comment in mid-November on the USDA website. The public comment period for the Check Off on the USDA website will be ending February 18, and NHLA has created a blog on the front page of our website so members can voice individual or corporate feelings concerning this issue. Your NHLA board has voted to disseminate information concerning the Check Off and to provide a forum for members to express their feelings, nothing more. I know the Check Off is a polarizing issue, but at the end of the day I hope everyone will remember the special tight nit industry, unrivaled by any other, that we all work in. Once again I hope everyone enjoyed a healthy holiday and is looking forward to a prosperous New Year!
8. Continuing Education: After a successful Chinese Culture Class held this past summer, continuing education is working to bring our membership additional programs with a defined audience for increased profitability of our membership. Watch for announcements on future classes in Hardwood Matters and the Hardwire news emails.
Sincerely,
As you can see, the board was busy on behalf of the NHLA membership. I would like to personally thank the entire board and the staff of NHLA for their commitment to our Association and this great industry.
Scott Heidler Heidler Hardwood Lumber Co.
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EXECUTIVE DIRECTOR’S MESSAGE
NHLA TAKES NO POSITION IN CHECK OFF DISCUSSION BUT RENEWS COMITMENT TO PROMOTION The USDA will close the comment period on the proposed Hardwood Lumber and Hardwood Plywood Promotion, Research and Information Order (Hardwood Check Off) in mid-February. NHLA will not make any official comments, nor will the Association take a position on the Order. The role of the Association, as directed from the board of managers, is to disseminate information to its members and the industry at large which we will continue. The Association has started a blog posting at www.nhla.com/nhlablog for members and interested parties to comment and we will maintain the blog discussion as long as there is interest. With an anticipated final vote later this spring, there is still plenty of time for industry discussion. Make no mistake; the Hardwood Check Off is a big deal. It will have lasting effects on the industry whichever way the vote goes. I agree with comments that say that the Check Off discussion mirrors the discussions that took place over a century ago when the hardwood grading Rules were being adopted. In the end, the hardwood industry moved forward by an agreed consensus of doing what was best in the long run and I have full confidence that this will happen again. Some members have expressed frustration that the Association has chosen not to be an advocate for either side of the discussion, and in fact have incorrectly assumed that NHLA must be behind the Order. That confusion may be because NHLA was firmly behind such an effort 20 years ago, or that the individuals who came together as the Blue Ribbon Committee which put forth the proposed Order have served the industry previously on the NHLA board. Be assured that NHLA is not backing off on its commitment to advocate for the industry whenever and however possible. We are told repeatedly in various forums, meetings and surveys that hardwoods need to be promoted. NHLA has supported promotion projects including Family Business First, the Hardwood Council, New Oak Promotion and most recently the American Hardwood Promotion Group. In 2010, NHLA along with 135 other industry representatives participated in the Hardwood Leaders Forum sponsored by Hardwood Publishing, Inc. At the end of a series of meetings, the Forum adopted these five goals:
Make no mistake; the Hardwood Check Off is a big deal. It will have lasting effects on the industry whichever way the vote goes. Comment period ends February 18.
• Improve consumer perceptions of American hardwoods • Improve public perceptions of American hardwood forest management • Improve public perceptions of American hardwood industry • Improve domestic and global business environment for American hardwood firms and landowners
Sincerely,
• Increase cooperation and collaboration within the American hardwood industry and hardwood users within the bounds of anti-trust laws NHLA will continue to work towards these goals as directed by the board and as supported by the industry to the best of its ability. The Association remains committed to promotion on whatever level the industry chooses to support, and will watch with interest the decision soon to be made by you, our members and friends.
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Mark Barford, CAE, Executive Director National Hardwood Lumber Association www.nhla.com
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LETTERS TO THE EDITOR
WE NEED THE WHOLE INDUSTRY TO COME TOGETHER December 26, 2013 Ask any school kid if we’re running out of trees and they’ll say yes. Ask an architect what’s the best environmental building material and they’ll tell you steel, concrete or aluminum. Ask a hardwood producer what they want and they’ll say higher prices. We’ve got to promote hardwoods as a group with one voice, even if just to counter the lies and damn lies others are saying about hardwood forests and our industry that utilizes them. I entered the hardwood industry over 35 years ago with a pair of steel toe boots and $600 tuition paid to the WCVTI Wood Harvesting Vo-Tech School in Calais, Maine. Georgia Pacific and the state of Maine joined together to train loggers in that 6 month course. There is a way for good government and industry to work together for everyone’s benefit. I hate taxation without representation as much as anyone, but I depend on the rule of law and accountability that good government provides. There’s a role for good government as a neutral party to administrate good programs. We citizens simply have to hold government accountable. Now I’m a reformed supporter of the Hardwood Check-Off proposal because I learned the facts. The USDA will only be the administrator of funds collected, and oversee industry volunteers who will be responsible to fund general hardwood promotion and important research. Worried the money will get wasted? Then hold the industry volunteers accountable to spend it wisely. The USDA is simply an administrator. Dairy farmers came together with a check-off program and created “Got Milk” and the whole dairy industry benefited, small farmers who didn’t direct contribute too. Recently the Softwood industry passed their check-off program and is now funding research and promotion with immediate benefit to their industry. It worked for them, why not us? At the recent conference for architects called “Green Build” I saw big displays from the cement, steel and aluminum industries but most impressive was the “Re-Think Wood” booth funded in a large part by the softwood check-off program. A few of us little old hardwood guys were there, but we were tilting against windmills of negative perceptions of our hardwood industry. We need the whole industry to unite to change those wrong perceptions. Individual companies should spend time and money advertising our individual goods and services, but we can’t make a dent in the general negative perceptions alone. Ever heard of LEED? Did you know there’s very little incentive for Architects to specify hardwoods to qualify for LEED? We complain about that stupidity, but do nothing about it. The hardwood Check-off program can fund a change to that. Can you use more customers paying higher prices? Need more standing timber, loggers, or wood product manufacturers nearby? I’m all about each company advertising their own products/services, but we need to speak with one voice to counter the lies and miss-perceptions of the industry as a whole. Nobody wants to buy solid wood furniture if they think it’s wiping out forests. Smart high school and college graduates won’t invent new wood technologies or design new wood W W W. N H L A .C O M
structures/products if they think we’re felling timber with cross-cut saws, and building furniture with a stone axe. The excellent health of hardwood forests and the dynamic industry that utilizes them is the best kept secret of our time because we haven’t spoken in unity with one voice. Those of us who survived the carnage of the last 7 years owe it to the next generation to raise the value of sustainable harvesting, logging, sawmilling and hardwood product design and manufacturing. We agree on the simple truths this program is designed to promote. If we can’t speak the simple truth in unity, nobody else will. I have high expectations this program will raise the value of proper utilization of hardwood forests, explain the facts why wood is the best environmental building material on the planet, describe the benefits of modern hardwood design and manufacturing companies located in a broad range of rural and urban communities, and promote the beauty of hardwood products in general. There really is no healthier forests, no better industry for communities, and no more beautiful all natural product on this planet. We’ve got to unite behind this effort to tell our story. We’ve got to counter the lies that generations think are true. No program is perfect, but this is the best I’ve seen yet. It’s designed to raise funds used to raise the value of hardwood forests/products. It is designed to help raise the tide that lifts every boat. Got a better plan? If not, let’s get started with this one and hold our government and industry volunteers accountable to do the right things right. Working together we will promote hardwoods and research for the common good of the hardwood industry overall. Sincerely, Dave Whitten Director of Exports, Bingaman and Son Lumber Past Chair, Keystone Wood Products Association President, NHLA Inspector Training School Class #100 Past small logger/sawmill company owner
SUBMIT A LETTER Have a question, idea or opinion? Send a letter to the Editor at Hardwood Matters! Submit by email at r.hornsby@nhla.com, by fax at 901-382-6419 or by mail to: NHLA | Attention Renee Hornsby | PO Box 34518 | Memphis, TN 38184 Comments are also accepted at www.nhla.com/nhlablog
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I NSIDE NHLA
EXECUTIVE DIRECTOR ATTENDS SW HARDWOOD CLUB MEETING IN NEW ORLEANS
NHLA HOSTS THE NATIONAL WOOD FLOORING ASSOCIATION
Executive Director/CEO Mark Barford represented NHLA at the Christmas meeting of the Southwest Hardwood Club. The December event was held at the Hotel Mont Leone in New Orleans, LA with more than 30 participants drawn from the Southwest corner of the hardwood production area of the United States, including Alabama, Arkansas, Louisiana, Mississippi, and Tennessee. The meeting followed an open format with members discussing several of the moment issues along with discussions on predictions for upcoming business. “I was privileged to join a group that meets regularly and knows each other well allowing for very frank discussions,” Barford noted. “Many of their concerns and issues mirror those that I hear throughout the country and centered on future hardwood supplies and availability of a workforce that will allow for growth. Returning to the City of New Orleans was also encouraging to see the very positive changes and new growth in this proud city.”
NHLA was proud to play host to the Annual Manufacturers Meeting of the National Wood Flooring Association in early December. The annual meeting kicked off with an evening reception at NHLA headquarters, followed by a full day of presentations utilizing the NHLA Inspector Training School facility. The meeting included a presentation by NHLA Executive Director/ CEO Mark Barford about the fast changing markets for hardwoods and the future outlook for raw material availability for the flooring industry. Other speakers included Dana Cole of the Hardwood Federation, Jack Shannon of the Hardwood Check Off Blue Ribbon Committee and Michael Martin of NWFA. “We were so proud to show off our beautiful facilities to this distinguished group of hardwood flooring manufacturers and then participating in their session,” Barford reported. “The importance of the hardwood flooring industry to hardwood lumber producers added to the importance of this meeting and we look forward to making our facilities available to them for future events.”
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I NSIDE NHLA
NHLA WELCOMES NEW MEMBERS
Partner Member ■ Maderas Polanco SA DE CV | Guadaljara, Mexico
Active Member with Annual Sales Between $5M and $20M ■ Church and Church Lumber Company, LLC | Millers Creek, NC
■ Shanghai Longman Industrial Limited | Shanghai, China
■ Clark Lumber Company, Inc. | Red Boiling Springs, TN ■ Ganahl Lumber Company | Anaheim, CA
Sustaining Member ■ CST Co. – Dallas, TX
■ Maine Woods Co., LLC | Portage Lake, ME
■ Comact Equipment Inc. | St. Ephrem, Quebec, Canada
■ Marietta Wood Supply | Marietta, MS
■ Connor and Gallagher Insurance Services | Lisle, IL
■ Simon Lussier Ltee | Mirabel, Quebec, Canada
■ Laser Networking | Taylor, MI
■ Ward Timber Co., Inc. | Linden, TX
■ Wiese USA | Memphis, TN
Active Member with Annual Sales less than $5M ■ Bernie McGlynn Lumber Ltd. | Mildmay, Ontario, Canada
■ Wood Pro Software | Richmond, British Columbia, Canada
■ Sheraton International Trade Co. Ltd | Dalian, China
■ CLC Hardwoods | Amma, VA
Associate Member ■ Dongguan Seeland Wood Limited | Dongguan, China
■ Little Creek Lumber | Carrollton, MO
■ Monarch Millwork, Inc. | Grayling, MI
■ Lost Creek Wood Products | Mifflintown, PA
■ Standard Trading | Dallas, TX
■ Paul Bontrager | Centerville, MI ■ Ron Baltzley Hardwoods, Inc. | Covington, PA
If you know a company that could benefit from membership in NHLA please contact John Hester, Marketing Director at 901-399-7558 or j.hester@nhla.com.
■ Texas International Traders LLC – Cedar Hill, TX
Quarter Ending December 2013
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Grading Hardwood – ‘onward and upward’ By Michael Buckley, Turnstone Singapore
The American Hardwood Export Council (AHEC) together with the National Hardwood Lumber Association (NHLA) brought its 2013 series of lumber grading seminars in Southeast Asia to a close with large audiences in Jakarta and Solo in Indonesia before the final one in Muar, Johor Malaysia. With the well-documented shortage of some grade lumber during this current upturn in U.S. domestic and export markets, it is vital to buy the correct grade for the job in hand, mainly to avoid waste and incorrect material pricing. Opening each seminar, NHLA Chief Inspector Dana Spessert stated that the function of NHLA grading “is to give any piece of lumber its true value” as well as estimating the yield in determining the three main grades. More than 70 delegates from manufacturing, trading and the design sectors participated in Jakarta to hear the principles of the NHLA measurement cuttings method of grading which estimates yield from any individual board. “FAS top grade yields 83 1/3 percent clear lumber, while the ‘furniture grade’ #1 Common yields 66 2/3 percent clear lumber in smaller cuttings and finally #2 Common yields 50 percent – all graded from the poor side of the board,” Mr. Spessert explained. Small groups were then invited to grade sample boards under his watchful eye. Each seminar finished with a review of the commercially available hardwood species from the U.S. and with lively question and answer sessions. In Solo, the famed city of Batik in Java, about 50 participants came from all over the region and as far away as Semarang, where grading seminars had been held earlier in the year.
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All delegates in Indonesia were provided with simultaneous translation and written guides to NHLA lumber grading Rules in Bahasa Indonesia language. Various questions were asked, ranging from the core issues related to the different grades, defects such as cracking, wood color variations as well as certification issues, kiln drying and KD technology that is used commonly in the U.S. Addressing each Indonesian audience John Chan, AHEC’s director based in Hong Kong, stated that “exports from U.S. since 1992 had grown from US$17.5 million to US$34 million in 2012, an increase of 94 percent, averaging 4.4 percent annual growth.” He explained AHEC’s mission and role in promoting U.S. hardwoods over the past 22 years in Southeast Asia, including Indonesia, and encouraged delegates to participate with AHEC in future programs; offering assistance through AHEC on questions related to supply and demand and technical aspects. Mr. Chan confirmed AHEC’s intention “to continue supporting its growing markets in Southeast Asia with technical and grading seminars – onward and upward!” In Muar, Johor in southern Malaysia, the final seminar was held in cooperation with the Muar Furniture Association (MFA), with approximately 40 participants, including Chris Rittgers, Agricultural Attaché of the U.S. Embassy from Kuala Lumpur and Mr. Richard Lee, former president of the Malaysian Furniture Industries Council. Jimmy Yong, Deputy Secretary General of the MFA, delivered the welcoming remarks to which John Chan responded that he was “happy to be back in Muar after 15 years. There is a lot of opportunity for AHEC and MFA to work together for mutual benefit. We are not coming to Muar to replace your timber resources, but instead we come here to offer more choices of timber resources,” he concluded. Editors Note: NHLA will continue to work closely with AHEC throughout the coming year as we continue to teach the Rules around the world.
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FOUNDATION FOCUS
FOUNDATION VISITS FLORIDA ELEMENTARY SCHOOL The Hardwood Forest Foundation recently visited a group of first graders at New Smyrna Beach, Florida’s Read Patillo Elementary School.
In addition, the students were treated with apple juice and chocolate chip cookies, which they agreed are tree product favorites.
“With much of the New Smyrna Beach area still devastated by the damage of wildfires in recent years, the message of forest management was loud and clear,” said Crystal Oldham, Foundation Executive Director.
To learn more about how you can help get Truth About Trees into your local schools, visit www.hardwoodforest.org or email info@hardwoodforest.org.
“By utilizing the Foundation’s Truth About Trees program, I was able to reach these children in a way that allowed them to understand the benefits of properly harvesting through science and creative thinking, all the while highlighting the many things we obtain from the forest that we use in our everyday lives,” Oldham added. Although school visits such as this one are aimed at educating children on the forest products industry, they oftentimes eliminate misconceptions teachers and parents have, as well. “I truly enjoyed sitting-in during the Truth About Trees presentation and watching my son and his classmates learn about the benefits of harvesting with this innovative curriculum…I am a huge advocate for this style of learning,” said Katie Liller, Read Patillo parent and Parent Teacher Association (PTA) member.
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EDUCATION SPOTLIGHT
NHLA GRADUATES THE 172ND CLASS OF THE INSPECTOR TRAINING SCHOOL – THE LARGEST CLASS IN SEVEN YEARS Commencement exercises for the 172nd class of the NHLA Inspector Training School were held on Friday, December 13, 2013 with twenty-nine students completing the program – the largest class since 2006! Dan Caldwell of Atlanta Hardwood Corporation delivered the graduation address to a capacity filled room. As keynote speaker, Dan spoke on the importance of the School and its teaching of the Rules. “I believe to this day the Inspector School and Inspection Services are the most important facets in our great industry and the NHLA; they help educate and bring structure to our industry, they teach the core of what brings continuity to our industry, the inspection Rules and Sales Code. Can you imagine how our industry would operate if it didn’t have this basic structure, how fractured it would be, constantly in turmoil?” Dan went on to explain his dedication to the School and the knowledge it conveys. “I believe so strongly in the Inspector Training School’s educational process that I require every new employee that is hired as a management trainee or has the potential to rise to management, to attend the 13 week course here in Memphis. As a matter of fact, 10 percent of the current class or 3 of the 29 graduates here today are employees of one of our companies. I believe so much that this process is essential to their overall development, education and training process.” Graduates were: ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■
Charles T. Ball of Cambridge, OH | Superior Hardwoods of Ohio, Inc. Wuilians Olandez Brito of Alto, GA | AHC/White County Mouldings Joshua Cole Bronson of Stuttgart, AR Bret Crutcher of Winnsboro, TX | Crutcher Tie & Lumber, LLC. Phillip Downard of Wellston, OH | Superior Hardwoods of Ohio, Inc. Kelby R. Graves of Tompkinsville, KY | Roy Anderson Lumber Co. Tyler Duane Hanawalt of New Hamption, IA | Hanawalt & Son Lumber, LLC Colin Hotalen of Athens, OH | Industrial Timber & Lumber Company Tyler Hutton of Chillicothe, OH | Woods Lumber Company Robert L. Johnson of Stanford, KY | Roy Anderson Lumber Company Lynette K. Kever of Muscoda, WI | Riverside Sawmill, Inc. Noel Mata of Ironwood, MI | Snow Country Hardwoods Benjamin C. Meeks of Somerset, KY | Somerset Hardwood Flooring Andrew Napier of Albemarle, NC | AHC/AHC Craig Imports Quentin Nie of Hong Kong
■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■
Andrew Page of Stockport, OH | Superior Hardwoods of Ohio, Inc. Stefanie D. Pfremmer of Bloomington, WI James Reynolds of White Cloud, MI | Tooley Creek Lumber Colby L. Rickman of Adamsville, TN | Roach Sawmill & Lumber Company Francisco Javier Sandoval of Maysville, KY | Harold White Lumber, Inc. Robert Schoener of Blue River, WI | Riverside Sawmill, Inc. Luke J. Schoville of Hurley, WI | Snow Country Hardwoods Zach Taylor of Germantown, TN | Ralph Taylor Lumber Co., Inc. David Gregory Temkin of Huntersville, NC | AHC/Huntersville Hardwoods Robert Scott Underwood of Paris, TN | Middleton Lumber Company, LLC Daniel R. Upchurch of Cordova, TN Jacob Joseph Vitek of Highbridge, WI | North Country Lumber Co., Inc. Cody A. Woelfel of Kersey, PA | Horizon Wood Products Joyce Yang of Hong Kong
In closing, Dan left the graduates with three “rules” to live by: 1. Be true and faithful to your industry, nurture and help mold it and continue to hold it up as one of our greatest industrial institutions. 2. Be true to your company and your employer, be the best you can be in serving the people who employ you. 3. Be true and faithful to yourself, never compromise your integrity, be respectful to others. Ron Carlsson of USA Woods International, Inc. in Memphis, Tenn. presented the individual achievement awards. Outstanding individual awards recipients are as follows: ■ Tyler Hutton – John Thomson Award for Highest Overall Average ■ Colby L. Rickman – Howard Hanlon Award for Second Highest Overall Average ■ Kelby R. Graves – Westside Hardwood Club Award for Highest Board Run Average ■ Noel Mata – J.P. Hamer Award for Most Improved Student ■ Cody A. Woelfel – South Central Lumbermen’s Award for Best Attitude/Citizenship ■ Stefanie D. Pfremmer – Willard Scholarship Award for Self-Sufficiency, Attitude and Effort ■ Colin Hotalen – Lumbermen’s Club of Memphis Leadership Award Enrollment is now open for the summer program which begins March 10, 2014 in Frederic, Michigan and the fall program which begins on September 3, 2014 at NHLA headquarters in Memphis, Tenn. To enroll or learn more about the program please visit www.inspectortrainingschool.com.
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INSURANCE CORNER
AGREED AMOUNTS By Kevin Mershimer – Regional Manager, Lumbermen’s Underwriting Alliance Again,
In last month’s article we reviewed coinsurance. We looked at several ways to avoid a coinsurance penalty. They include: 1. A current insurance appraisal. 2. Insuring your Buildings/ Contents/ Stock to a ‘Replacement Cost’ value. This month we will review the Agreed Amounts endorsement as another way is to avoid a coinsurance penalty in the policy at time of loss. Agreed Amounts is provided by an endorsement (something that changes the policy) that temporarily suspends the coinsurance clause for one year. Usually, you will see a date that coincides with the Agreed Amount provision. The purpose of the expiration date is that if the Agreed Amounts endorsement is not renewed at the end of that period (usually the renewal date); the policy reverts back and reinstitutes the coinsurance percentage. That is why you may still see 90 percent coinsurance listed even though you have Agreed Amounts. To provide Agreed Amounts, the insurance company must be comfortable that the insurance values for the insured buildings, contents, or stock are reflective of the current replacement cost of the insured item. For example: if you insure a sprinkled, hollow concrete block building at 15.00 a square foot, most carriers will recognize the cost of materials, labor, etc. would exceed 15.00 per square foot. Therefore, it would be difficult to ‘agree’ to waive coinsurance on the values of insurance submitted. The insurance company and insurance buyer are ‘agreeing’ the values are in an acceptable range and the insurance company has collected premium on an acceptable statement of values on the insured property. It is important to note that an Agreed Amounts endorsement on your policy does not mean you are sufficiently covered with your chosen values. The policy will pay no more than the Limit of Insurance stated on the policy. This endorsement is often misinterpreted to mean that the insurance company agrees that your limits of insurance are correct. You will also want to discuss ‘scheduled’ vs. ‘blanket’ limits with your agent.
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The Agreed Amount endorsement does not mean the insurance carrier agrees that your buildings, etc. are insured to sufficient limits, nor does it agree to pay above the limits of insurance of the policy in the event of a loss. It simply means the carrier agrees that your limits meet the carrier’s minimum threshold level to suspend the application of the coinsurance clause for one year. You may still be over-insured or underinsured. An insurance appraisal is your best choice in setting your limits. An example of this is when a building is overvalued and the carrier agrees to provide Agreed Amounts endorsement. The values meet their minimum threshold level to suspend coinsurance for one year. When the insured incurs a total loss on the building, they might expect to receive the Agreed Amount figure; however that is not the definition of Agreed Amounts. The carrier’s responsibility is to repair or replace the building with like kind and quality. If the cost to replace the building is $1 million and you had insured it for $1.4 million, the carrier will only replace the building that was there, not build you a larger building. The second example would be when the property item is underinsured and the carrier has endorsed your policy with Agreed Amounts. The building replacement cost is determined to be $1 million following the loss. You had purchased an insurance limit of $800,000 with Agreed Amounts. The loss settlement would begin with $1 million dollars minus the deductible. However, you will receive no more than the $800,000 Limit of Insurance on the policy. The benefit of the Agreed Amounts endorsement is that you will not be subject to an additional co-insurance penalty. The Agreed Amount endorsement is a beneficial coverage enhancement. As we discussed last month, ‘the coinsurance clause is placed on the property policy to ensure the limits of insurance provided are an accurate and adequate representation of the coverage provided on the insurance policy’. By purchasing an adequate limit, the potential coinsurance penalty can be removed. It is always our recommendation to secure and maintain current insurance appraisals. It is the best means to having peace of mind should you suffer an insured property loss. Visit with your agent, discuss your insurance values and the current terms on you property policy. If you have insurance questions, Kevin Mershimer can be reached by email at km1@lua.cc.
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LEGISLATIVE LOG
DECEMBER 2013 UPDATE By Dana Lee Cole, Executive Director – Hardwood Federation It’s hard to believe another year is coming to an end. However, as we close the books on one year, we look forward to another. The Hardwood Federation has had an active 2013, at times celebrating accomplishments and at times frustrated by congressional inaction, but we have never been bored! We look back on the past year and are proud of achievements made and lessons learned; we are better prepared and focused to go forward into the challenges and opportunities of 2014. A key Federation issue in 2013 was the promotion of wood and wood products as sustainable and energy efficient building materials. In this area, we did end the year on a high note. After months of meetings and negotiations, the Department of Defense issued new guidance regarding their green building policy that accepts multiple green building certification programs, allowing for greater inclusion of wood and wood products in DOD building projects. This has been a long time initiative of the Federation and our partner wood products industry associations and was a bright note to the end of the year.
January and get back to the negotiating table. It is also possible they will move to extend current legislation for one or two years and move on to other issues. The situation is fluid and we will have to remain vigilant. In 2013 we were also busy supporting implementation of the Lacey Act and opposing Congressional efforts to weaken its illegal logging provisions. We have also amped up efforts to ensure that bio-mass emission are treated fairly, supporting language in the proposed comprehensive energy bill that allows the Federal Government more flexibility in choosing green building systems to rate its new construction projects, and efforts to improve management of federal lands. All issues that will require careful attention in 2014. 2014 promises to be a busy year, but we are ready for the challenge and are eager to dive in. Please visit our web site at www.hardwoodfederation.com for more information about the Federation and our efforts on behalf of the industry. I wish you a happy and successful 2014!
Another highlight of the year was the expansion and implementation the NHLA’s Kiln Dry Certification program into Vietnam and the European Union. The Hardwood Federation has been a strong advocate for the program and is very pleased to see that the program is getting the global recognition so many have worked to achieve over the years. However, 2013 also ends with a number of issues unresolved and the path forward unclear. At the top of the list is the Farm Bill. Unfortunately, negotiations between the House and Senate broke down just before Thanksgiving leaving little hope of final resolution before the new year. This was a blow to not only the hardwood industry, but also to the many agricultural sectors that are dependent on programs funded through the Bill. Of primary importance to the hardwood businesses are measures included in the Farm Bill that authorize and fund both the Market Access (MAP) and Foreign Market Development (FMD) programs, fix the U.S. Department of Agriculture’s bio-preferred labeling and procurement program so that it doesn’t arbitrarily disqualify traditional U.S. wood products, and a provision that would codify forest roads as non-point sources of pollution. Ultimately, the Hardwood Federation would like to see a five-year Farm Bill signed by the President. We are joined in the hope by many key members of Congress on both sides of the aisle as well as members of the Administration. Such a bill would resolve a number of issues that have been a drag on the industry and allow companies to plan for more than 10-12 months into the future. It is possible that Congress will return in W W W. N H L A .C O M
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RULES CORNER
TEACHING THE RULES – PAST, PRESENT AND FUTURE By Dana Spessert, NHLA Chief Inspector NHLA was formed in 1898 to create a standard for grading hardwood lumber in order to ease trade, create uniformity and expand markets. The earliest National Inspectors were referred to as “Licensed Inspectors”, contract employees with the authority to issue NHLA Original Inspection Certificates. After a few years of operating the “Licensed Inspector” model, NHLA opted to bring these contract employees on board as full time employees, thus making it easier to monitor their day-to-day activities. During this time the NHLA Inspection Services Committee discussed repeatedly ways to meet the growing demands of the industry and so began the teaching of the NHLA Rules for the Measurement and Inspection of Hardwood. The first records of initial group training indicated that the U.S. Veterans Administration (VA) approached NHLA about training returning soldiers from WWII in 1945. The Association recognized this as a golden opportunity, not only to assist our nation’s veterans but to also fill a void in the industry’s growing demand for lumber inspectors. NHLA opened its first formal School in Memphis, Tenn. in 1948 and since then has trained more than 7,200 students.
Excellence
in every drop
NHLA is fully committed to teaching the hardwood lumber grading Rules to the industry and does so in many different ways: the three month Inspector Training School program at NHLA headquarters in Memphis, a shortened two and a half month ITS program held in different locations throughout the U.S. and three, four and five-day short courses designed to give a brief overview of the hardwood lumber grading Rules which are taught not only in North American but around the world. NHLA recently began work on expanding its repertoire of teaching methods and is currently developing a curriculum which includes an online component. NHLA is also working on scheduling more overseas classes with a more in-depth curriculum that will expand the knowledge of the NHLA hardwood grading Rules and Sales Code. The 172nd Class of the NHLA Inspector Training School recently graduated 29 students, the largest class since the fall of 2006. We hope that this is a sign of even bigger and better times to come, not only for the Association, but the entire industry as well. If your company has lumber grading training needs, please do not hesitate to contact me or one of our many hardwood experts that have always been known as National Inspectors. Questions regarding defects or any aspect of the NHLA Grading Rules should be directed to Chief Inspector Dana Spessert at 901-399-7551 or d.spessert@nhla.com
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CALENDAR
WH ERE IN THE WOR LD IS N H LA? SURFACES 2014 Las Vegas, NV | January 27–30 Participating: Dana Spessert, Chief Inspector Crystal Oldham, Executive Director Hardwood Forest Foundation
IHLA 2014 Convention & Exposition Indianapolis, IN | February 5–6 Attending: Mark Barford, CAE, Executive Director
Hardwood Federation Board Meeting Washington, DC | February 11–12 Participating: Mark Barford, CAE, Executive Director
Canadian Hardwood Bureau Annual Winter Meeting Montreal, Canada | February 25–26 Attending: Dana Spessert, Chief Inspector
HMA 2014 National Conference & Expo Savannah, GA | March 12–14 Attending: Mark Barford, CAE, Executive Director
Interzum Guangzhou, China | March 28 – April 1 Participating: Dana Spessert, Chief Inspector
NWFA Flooring Expo Music City Center Nashville, TN | April 16–19 Participating: Mark Barford, CAE, Executive Director
I N DUSTRY EVENTS
Leave THE Checking TO Hockey
ANCHORSEAL
®
2014 AHMI Annual Meeting
End Sealer For Logs & Lumber
Boca Raton Resort Club Boca Raton, FL | February 26–March 2
• Prevent up to 90% or more of end checking in freshly sawn logs and lumber.
Ecobuild London | March 4–6
• Reduce losses, conserve resources and improve yield.
EDUCATION & TRAIN I NG
• Easy to apply with brush or sprayer.
Inspector Training School 173rd Class
You Bring THE WOOD ... We’ll Bring THE PROTECTION™
Memphis, TN | January 8 – March 28, 2014 NHLA Headquarters Instructor: Rich Hascher, NHLA Instructor Contact: Becky Miller | 901-399-7569
Inspector Training School 174th Class Frederic, MI | March 10 – May 15, 2014 Instructor: Barry Kibbey, NHLA National Inspector Contact: Becky Miller | 901-399-7569
www.uccoatings.com Call Toll Free US/CN: 1-888-363-2628 PO Box 1066, Buffalo, NY 14215, USA
Visit www.nhla.com/calendar for more updates. W W W. N H L A .C O M
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2014 NHLA ANNUAL CONVENTION & EXHIBIT SHOWCASE OCTOBER 8–10, 2014 | RED ROCK CASINO RESORT & SPA | LAS VEGAS, NV w w w. n h l a c o n ve n t i o n . c o m