March 2023 Hardwood Matters

HARDWOOD MATTERS

March 2023

2023 Trends In Logistics

plus

THE RETURN OF THE HARDWOOD FEDERATION FLY-IN RIFT & QUARTERED LUMBER

EXECUTIVE COMMITTEE

Jon Syre, Chairman Cascade Hardwood, LLC

Bucky Pescaglia, Vice Chairman Missouri-Pacific Lumber Co., Inc.

Jeff Wirkkala, Past Chairman 2020-2022 Hardwood Industries, Inc.

MISSION LEADERS

Sam Glidden, Unique Services GMC Hardwoods, Inc.

Ray White, Rules Harold White Lumber Inc.

Joe Pryor, Industry Advocacy & Promotion Oaks Unlimited

Rich Solano, Structure Pike Lumber Company, Inc.

Stephanie VanDystadt, Membership & Networking DV Hardwoods, Inc.

COMMITTEE CHAIRS

Burt Craig, Membership Matson Lumber Company

Rob Cabral, Promotion & Advocacy Upper Canada Forest Products, Ltd.

Dennis Mann, Convention Baillie Lumber Co.

Tom Oiler, Inspection Services Cole Hardwood, Inc.

Brant Forcey, ITS/Continuing Education Forcey Lumber

George Swaner, Communications & Marketing Swaner Hardwood

Joe Snyder, Rules Fitzpatrick & Weller, Inc.

HARDWOOD MATTERS

THE VOICE OF THE HARDWOOD INDUSTRY

National Hardwood Lumber Association PO Box 34518 • Memphis, TN 38184-0518 901-377-1818 • 901-382-6419 (fax) info@nhla.com • www.nhla.com

THE MISSION OF NHLA

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 unique member services; promoting North American hardwood lumber and advocating the interest of the hardwood community in public/private policy issues; and providing a platform for networking opportunities.

NHLA STAFF

Dallin Brooks, Executive Director dallin@nhla.com

John Hester, Chief Development Officer j.hester@nhla.com

Renee Hornsby, Chief Operating Officer r.hornsby@nhla.com

Dana Spessert, Chief Inspector d.spessert@nhla.com

ACCOUNTING

Desiree Freeman, Controller d.freeman@nhla.com

Jens Lodholm, Data Administration Specialist j.lodholm@nhla.com

Amber Signaigo, Assistant Controller a.signaigo@nhla.com

INDUSTRY SERVICES

Mark Bear, National Inspector m.bear@nhla.com

Tom Byers, National Inspector t.byers@nhla.com

Mark Depp, National Inspector m.depp@nhla.com

Kevin Evilsizer, National Inspector k.evilsizer@nhla.com

Simon Larocque, National Inspector s.larocque@nha.com

Benji Richards, Industry Services Sale Manager b.richards@nhla.com

INSPECTOR TRAINING SCHOOL

Geoff Webb, Dean of the Inspector Training School g.webb@nhla.com

Roman Matyushchenko, ITS Instructor and Associate Dean of Education r.matyushchenko@nhla.com

MARKETING/COMMUNICATIONS

Amanda Boutwell, Marketing and Communications Manager a.boutwell@nhla.com

For advertising contact: John Hester j.hester@nhla.com or 901-399-7558

Vicky Simms v.simms@nhla.com or 901-399-7557

Melissa Ellis Smith, Art Director m.ellis@nhla.com

Rachel Spiers Blossman, Digital Media Specialist r.blossman@nhla.com

MEMBERSHIP

Julia Ganey, Member Relations Manager j.ganey@nhla.com

Vicky Quiñones Simms, Membership Development Manager v.simms@nhla.com

LET'S FIND THE SOLUTION

As an industry, we share common challenges. By working together, we will have more success creating new innovative solutions to our common problems.

Traditional housing and job stability are changing. Many people can work remotely now or are more interested in changing jobs than ever before.

• The average person will change careers 5-7 times during their working life. Approximately 30% of the total workforce will now change jobs every 12 months. Source: the U.S. Department of Labor.

• A new mobile society is upon us, and our industry needs to adapt and respond to how society views and uses our products. Using 2007 ACS data, it is estimated that a person in the United States can expect to move 11.7 times in their lifetime based on the current age structure and average rates, allowing for no more than one move per year.

Most of us have moved homes once, or I guess 12 times in our life times! It is an exciting process but can be a bit painful as you move all the furniture. I cannot even fathom moving 12 times!

Not too long ago, my wife and I were moving our oldest son into his first college apartment. Along with the normal emotions, I felt a bit sick about purchasing furniture primarily made of MDF and/or par ticle board simply because it could be moved easily and was cheap. Knowing full well that the life span of the furniture was probably only two years, it was a bit frustrating. Not only was this wasteful in money and environmental resources, but I was supporting the indus try that is a challenge and threat to the hardwood industry.

So why was this furniture attractive to my son? Well, it was mobile. He could take it apart and move it with him as he moves from place to place. At least he believes he can take it apart and set it back up again! I am not so sure. As I was leaving the store with a cart full of disposable furniture, I couldn’t help but ask myself:

• Where is the solid hardwood furniture that is modern in design?

• Where is the furniture that is high quality and explains a story of environmental responsibility, specifically carbon sequestration?

• Where is the furniture that can be realistically dismantled and moved efficiently to the next apartment or home and then truly reassembled into the same high-quality piece?

I want my cake, and I want to eat it too! I want the same piece of furniture to answer all those questions. I believe by answering the above questions; the consumer would be more apt to purchase a more costly piece of furniture, knowing it would last longer and be better for the environment. I don’t want to buy any more furniture for my son only to see it in the alley behind his apartment in the late spring when he is moving out, and it is either broken or unable to be assembled correctly.

I don’t have the solution to this industry problem, but some of you do! I look forward to engaging in conversations about these challenges and many others that face our industry with all of you.

FACE THE MUSIC

By DALLIN BROOKS, Executive Director

Ionce drove my dad’s work truck through the side of our garage. Long story short, I was coming back from a long day working in the fields and had mud on my boots. While driving down our gravel driveway, my foot slipped off the brake and hit the gas as I was coming up to the garage. My 14-year-old brain recovered quickly, and I hit the brake, but when I stopped, my bumper was 6 inches inside, the wrong side. I backed up, parked the truck, looked in the garage, and saw the chaos. About 100 small bins of fasteners had been launched off their shelves and spilled all over the floor. My natural response was to run and hide.

I didn’t tell anyone what happened; I just hid close by so I could hear the reaction. I hid because I didn’t want to face my dad’s wrath. My younger brother came out to call me for dinner, spotted the damage, and ran to tell dad. He came out and inspected it, clearly upset. They called for me, but I never responded. They went into the house and had dinner. By the time I came out of hiding hours later, my dad had calmed down, so hiding had worked - partially. I missed dinner and spent several days picking up all the nails, screws, nuts, bolts, and washers on the floor and sorting them into the correct bins. We tied several ropes to the winch to pull the wall back into place and secured it. In the end, everything was back to normal, and I learned a valuable lesson.

I remember thinking my dad was going to kill me. I didn’t think about the cleanup or anything other than self-preservation. I should have been thinking about accountability, responsibility, and communication. That is too much for a 14-year-old brain to handle but not too much for a multi-generational industry to keep in mind.

We as an industry can ignore the bad things said about us and hope they go away, and sometimes they do. But hiding from others’ opinions doesn’t change anyone’s opinion. Self-preservation is not

the right goal when facing criticism, chaos, or industry mistakes. We must face the claims, take responsibility, and tell our story. It may result in some harsh reactions, but it allows us to be part of the discussion rather than the problem. Doesn’t every parent tell their kids that facing problems solves more challenges than hiding from problems? So why do we hide as an industry?

Criticism of how we do things will not disappear; it’s a common problem. But we, as an industry, need to find common ground with those who would criticize us and tell our story to them, doing the work to build on our shared beliefs and understandings. When we tell our side of the story, share our perspective, and face our mistakes, we can enhance their perspective and help them understand that we care about the environment too.

As my dad said to me after I came out of hiding, everyone has had an accident. Everyone has made mistakes. We need to face them, not hide from them. No matter what you believe we all share one common ground on that, so let’s build on it.

Dallin Brooks NHLA Executive Director dallin@nhla.com | 360-823-3898

JIM C. HAMER CO.

Jim C. Hamer Co., in Kenova, WV, has loyally served NHLA for 47 years and the Hamer family has been a part of the hardwood industry for over 100. They have also given us two of our presidents. James P. Hamer from 1962 – 1964 and Jim C. Hamer from 1992 – 1994. Jim C. Hamer Co. now employs their family’s 5th generation. We’re proud to recognize them as our Member of the Month!

NHLA 124th Annual Report

By DALLIN BROOKS, Executive Director

The National Hardwood Lumber Association has a long and glorious 125-year history. In reviewing the past meeting books, it became clear that members of NHLA are given an Annual Report to keep them up to speed on all things within and impacting the hardwood industry. The 1952 annual report concluded, “Was agreed that the past year had been unusual in the matter of costs.” I think we would all agree to that again.

It is my pleasure to share the 124-year-end report of the NHLA for 2022. I think it fitting to do it in committee format and to share it from my perspective, even though I was only here for six months.

ASSOCIATION BUSINESS

The NHLA headquarters and the School buildings had been neglected for several years and needed some revitalization. NHLA was able to secure a favorable loan to update the facilities with new windows, roofs, ceiling vents and tiles, air conditioners, and soonto-be-completed bathrooms.

The board of directors held two meetings, one in Portland, OR in April and the second in Memphis, TN, in November. Jason Smith and Bruce Horner retired from the board of directors this year. We extend a heartfelt “thank you” for their contribution to the Association. The knowledge, opinions, and time given by board members are critical for the welfare of NHLA and the good of the hardwood industry.

ORGANIZATIONAL MATTERS

The year brought some staff changes and adjustments which will allow NHLA to be more flexible and proactive in providing members with the value and customer service they need and expect.

• NHLA hired Dallin Brooks as the new Executive Director in June 2022.

• NHLA Controller Desiree Freeman left the Association in July for a new opportunity, but we are happy to report that she returned to NHLA on January 30, 2023.

• Amber Signaigo joined the accounting team in July.

• Carol Mcelya, Education Services Project Manager, left for a new opportunity in December.

• Geoff Webb has been hired as the Dean of the Inspector Training School. He began work on January 3, 2023.

• Mark Bear returned to NHLA in January as a National Inspector, covering the southern part of the U.S.

• Renee Hornsby has been promoted to Chief Operating Officer as of January 1, 2023.

• John Hester has been promoted to Chief Development Officer as of January 1, 2023.

STRATEGIC PLANNING COMMITTEE

My first responsibility as Executive Director at NHLA was the creation of a strategic planning committee. This has been a good opportunity for the 16 committee members and the staff to work out the core NHLA foundation and the objectives that NHLA needs to focus on to stabilize and grow the hardwood industry. See the graphic below.

Nominating Committee – Chairman: Jeff Wirkkala

NHLA began the year with Jeff Wirkkala serving as Chairman, Jon Syre as Vice Chairman, and Darwin Murry as past Chairman. Jon was advanced to Chairman at the NHLA Annual Convention, and Bucky Pescaglia now serves as Vice Chairman. The other Mission Leaders and Committee Chairs, as well as Board Members, served the Association well and dedicated time, money, and efforts to improve the Association. We appreciate their efforts on behalf of the

entire hardwood lumber industry. Service on the board is open to all Active member category companies. If you have the desire to serve, please reach out to Jeff Wirkkala or me.

Finance Committee – Mission Leader: Rich Solano

NHLA ended the 2022 year in the black, the second year in a row after running a deficit budget for many years. Revenue and expenses exceeded budget predictions, and good fiscal management by the Chief Officers allowed NHLA to deal with inflation and still accomplish all they were required to do. See the graphic below for a breakdown of each committee’s revenue and expenses by percentage.

Membership Committee – Mission Leader: Stephanie Van Dystadt, Committee Chair: Burt Craig

NHLA is happy to report that we welcomed 64 new members in 2022 and only lost 15 member companies.

At the April board meeting, which I was able to attend as an observer, the Membership Committee and board voted to change the Active member categories from U1-U4 to V1-V10 to be more equitable and representative of the membership. This action was approved only after a year of investigation and work by the committee. The new Dues categories became effective on January 1, 2023, and the first renewals have been mailed.

Convention Committee - Mission Leader: Stephanie Van Dystadt, Committee Chair: Dennis Mann

The 125th NHLA Annual Convention & Exhibit Showcase in Cleveland, Ohio, was a rocking party, not just because of the Rock & Roll Hall of Fame theme but because so many came out and participated. It was a dour mood as the markets started to contract, yet the members were very generous to ITSEF, NAFF, and RAHC, raising record funds for these charitable organizations. The exhibit hall was busy, the networking was great, and everyone walked away praising the hard work of the staff and committee members.

Promotion & Advocacy Committee – Mission Leader: Joe Pryor, Committee Chair: Rob Cabral

The year’s big news was undoubtedly the coming together of the Real American Hardwood Coalition. RAHC and Canvas United presented the marketing plan for consumer education at the NHLA Annual Convention. In November, RAHC completed its strategic plan with an industry initiative to raise $3 million annually for five years. They are 10% of the way there.

The Hardwood Federation also had a busy year even though Covid-19 continued to keep the capital from returning to normal and prevented a fly-in meeting between the hardwood industry and our elected representatives. We look forward to participating in a Hardwood Federation Fly-In in June 2023.

Marketing Committee – Mission Leader: Joe Pryor, Committee Chair: George Swaner

The marketing and promotion of NHLA services to members and

potential members were very successful this year. NHLA engages on nhla.com, through bi-monthly newsletters, and on social media platforms LinkedIn, Facebook, and Instagram. The Hardwood Matters magazine was updated to include more articles from allied associations and market data from industry partners that are critical to understanding what is happening in the markets. Additionally, staff traveled to allied association meetings to participate and speak at them to engage with the industry.

Rules Committee – Mission Leader: Ray White, Committee Chair: Sam Glidden

The NHLA Rules for the Measurement & Inspection of Hardwood Lumber were updated and released at the end of 2022. The new Rules Book is effective January 1, 2023. All Active Category members were mailed copies in December. The Book is available for purchase through the NHLA online store.

Inspection Services Committee - Mission Leader: Ray White, Committee Chair: Tom Oiler

The team of National Inspectors remained busy throughout 2022 with inspections, facility grade certifications, yield analysis, quality control, and onsite inspector training. Additional K.D. certifications for exports continued to grow. Chief Inspector Dana Spessert has begun traveling outside of the U.S. again. In 2022, he traveled to Dubai, India, Japan, Spain, Thailand, the U.K., and Vietnam, where he represented NHLA and presented the NHLA Lumber Grading Rules to importers, architects, and designers.

Inspector Training School Committee / Continuing Ed Committee – Mission Leader: Sam Glidden, Committee Chair: Brant Force

In 2022, NHLA held the 200th Class of the Inspector Training School, quite a milestone. The total number of students educated through the Inspector Training School in 2022 was 52. Hundreds more were taught through the three-day and five-day short courses, online courses, and in-house training seminars. We appreciate all the partners who worked to support our courses in Pennsylvania and Ontario.

I am excited to be part of the NHLA team. You have dedicated Chief Officers that are looking out for your best interests and sacrifice their time and opportunities by putting you first. We are good stewards of your hard-earned money and do a lot for less than you can imagine. Additionally, we appreciate the vendors that sponsor, exhibit, and advertise with NHLA; they help keep the communication going. Finally, a shout-out to the Active members who continue to support NHLA and engage with the staff. Your dues, input, insights, and support keep the Association at the forefront of the industry so that we can help your company grow and prosper.

We look forward to serving you in 2023 and continuing to make improvements, and striving for collaborative excellence.

The Return of the Hardwood Federation Fly-In

By DANA COLE, Executive Director of the Hardwood Federation

After three long years of closed offices, remote work, virtual meetings, and minimal face-to-face communications, Capitol Hill is once again open and ready to welcome visitors! This can mean only one thing. The Hardwood Federation Fly-In to D.C. is back! While virtual meetings are certainly a valuable and efficient tool in our advocacy toolbox, nothing beats sitting in a room with your federally elected representative and educating them about your business successes, threats, and needs. It has been a long wait, but we are thrilled to announce that the Hardwood Federation will gather industry leaders in Washington, D.C., this coming June for 48 hours of meeting key Members of Congress and the Senate, including those that represent you and your companies, advocating for a better hardwood business future, and networking with your peers.

The 2023 Fly-In will be an excellent opportunity for members of the hardwood industry to tell their stories and let their Members of Congress know just how businesses and employees are affected by the decisions being made on Capitol Hill. And no one tells your story as you do! From experience, we know that direct communication with knowledgeable industry members is vital to establishing and growing

legislative contacts and their awareness of the Hardwood industry. Your participation is important . . . and very much valued.

As part of your experience, you will be briefed on key issues, armed with talking points and other briefing materials, assigned a group of state-based peers, provided with a scheduled list of appointments and a map, and turned loose in the halls of our nation’s capitol buildings.

The Hardwood Federation team is proud to represent the industry in Washington. But we can’t and don’t do it by ourselves. We rely on our member associations, like NHLA, to communicate with their member companies. Our voice in D.C. is made much stronger when we all work together to communicate with legislative offices on Capitol Hill. While many officials look to us for insight and guidance, it often takes a meeting, call, or letter from their actual constituents to push them one way or the other. You may register for the Fly-In on our website www.hardwoodfederation.com. We hope to see you in D.C.

If you can’t make it to the Fly-In this year, you can still join the advocacy effort. You have probably seen messages from us, either directly or shared

by NHLA, asking you to “contact Congress” using our online tool. Many of you have responded . . . and federal offices have taken note! Keep pushing that send button. This year the Farm Bill, which contains a significant forestry section, will be reauthorized for five years. We will be working daily to ensure that programs beneficial to the industry are included in the new Farm Bill . . . but when we need that extra push in the offices, we will be reaching out and asking you to push the “send” button. Please be ready and willing to make your voice count.

And keep in mind . . . Washington, D.C., isn’t the only place to talk to a Senator. Elected officials spend significant quantities of time each month in their home states and districts. And they don’t just sit in an office . . . they are looking for places to go and voters to meet. I strongly encourage everyone in the industry to introduce themselves to your Member of Congress. Call their local, state-based offices and make an appointment. Participate in a town hall meeting, attend a “Meet the Candidate” event, invite your elected officials to your operation and give them a first-hand look at your business and your employees. Putting a face on a company is powerful . . . and easily done. We at the Hardwood Federation are here to help . . . don’t hesitate to reach out to explore more ways that you can get involved!

You can find out more about the Hardwood Federation, our priority issues, and the Fly-In at www.hardwoodfederation.com. Please reach out to us if you have questions or thoughts. We are YOUR representatives, and we value your engagement.

The 2023 Fly-In will be an excellent opportunity for members of the hardwood industry to tell their stories and let their Members of Congress know just how businesses and employees are affected by the decisions being made on Capitol Hill.

2023 TRENDS IN LOGISTICS

By AMANDA BOUTWELL, Marketing Communications Manager

THE PAST THREE YEARS HAVE BEEN CHALLENGING FOR BUSINESSES ACROSS THE GLOBE IN PRACTICALLY EVERY INDUSTRY. THE HARDWOOD INDUSTRY WAS NOT IMMUNE TO THESE CHALLENGES, WITH LABOR SHORTAGES, SUPPLY CHAIN PROBLEMS, AND RAPIDLY SHIFTING ECONOMICS. LOGISTICS COMPANIES SERVING THE HARDWOOD INDUSTRY HAVE BEEN SADDLED WITH MORE THAN THEIR FAIR SHARE OF HEADACHES, FORCING THEM TO EVOLVE TO MEET NEW CHALLENGES.

As the logistics industry continues to grow through change, a few significant trends are worth your attention. These trends can potentially revolutionize the way goods are transported and could considerably impact the bottom line for companies across the hardwood industry. The four trends worth keeping an eye on are adopting new technology, increasing sustainability, expanding customer service, and increasing employee retention.

As logistics prices are beginning to stabilize, that doesn’t equate to greater capacity for shipping. President of TMX Shipping, Curtis Struyk, said, “It is true that pricing has eased, but additional vessel space is not necessarily available because of blank sailings. Also, some inland depots are not being replenished with available equipment because of the decrease in imports, which makes it difficult to secure bookings. Rates change, and situations change, but our goal is to always provide premium customer service regardless of industry obstacles.”

Logistics companies are considering adopting various technological advancements, from EV trucks to self-driving vehicles. Though it isn’t likely that we will see logs being hauled by autonomous trucks anytime soon, the technology is being developed, and self-driving trucks have the potential to significantly reduce labor costs and improve delivery times in the future.

EV vehicles are another technological advancement logistics businesses can consider, and they play into many companies’ goals of increasing sustainability. Congress recently passed several sizeable bills to revitalize industries, upgrade infrastructure, and help the U.S. move toward a clean energy future. The Infrastructure Investment and Jobs Act and the Inflation Reduction Act include incentives like tax credits for companies investing in green transportation like EV trucks and EV manufacturing.

Not all logistics companies are on board with the move toward EV trucks at this time. Steve Zambo, President of Ally Global Logistics, disagreed, saying, “We believe there will be major limitations with EVs coming to market. Specifically, the amount of time it takes to charge and how quickly batteries drain with heavier loads. This means you will need to charge more frequently, which elongates a haul’s transport time. Added time means added cost. Yes, you save on gas, but

you need to plan your route based on EV charges, and in turn, it will also elongate routes and delay deliveries. We will wait until this is further down the road before we do anything with this.”

There are some cases, however, where there may not be a choice. Illinois, California, and other states have set tighter emissions requirements that took effect in January. As a result, many older trucks are being taken off the road. It is estimated that 25% of the port drayage trucks in California do not meet the new requirements.

Meanwhile, the EPA has released much stricter emission standards for heavy trucks that will go into effect in the 2027 model year. The new EPA limits are meant to incite improvements in diesel engine performance and provide a way to a zero-emission trucking future.

Another trend technology logistics companies are embracing is real-time data processing and analytics for their warehousing. For example, companies with digitized processes that used to be done on paper are discovering that their operations have become more streamlined. By leveraging big data and analytics, logistics companies can gain a competitive edge, allowing them to modify their routes and improve customer service to stay ahead of the curve.

Real-time data processing is just one of the ways logistics companies are improving technology. Struyk points out, “At TMX, we have invested in technologies that have improved our cyber security, and we are constantly updating our Transportation Management System to help us be more efficient.”

Customer-facing technological upgrades are also trending. Zambo commented on ways Ally Global is creating forward-facing advancements, saying, “We are building a web-based low-code platform that will house all our export shipments, documents, and workflows. It will have a customer-facing dashboard. Think Domino’s Pizza Tracker for shipping. Low code is important because that means we can add features in just a couple of days instead of weeks/months. In addition to continuing to work on our new software, we are investigating various ways to utilize AI throughout our company to increase efficiencies.”

A recent survey of logistics executives by Accenture Research found that the biggest motivator for change is customer expectations. In 2023, customers are looking for a more comprehensive set of logistic services, which companies are answering with more upstream (or downstream) solutions.

“We believe there will be major limitations with EVs coming to market. Specifically, the amount of time it takes to charge and how quickly batteries drain with heavier loads."

Steve Zambo, President of Ally Global Logistics

One trend that (unfortunately) is not going away any time soon is finding new ways to address the labor shortage. Logistic companies are doing what they can to hire and retain employees using various methods. Several have increased salaries, and others have added benefits beyond standard insurance and 401K – like offering pet insurance, free gym memberships, and tuition reimbursement.

Some companies have even hired in-house recruiters, like Ally Global Logistics. Zambo explains, “In 2022, we decided that to build AGL properly, we needed to hire an in-house recruiter to focus solely on hiring. Our recruiter, Angelina Brown, sits in our Jacksonville, Florida, office. She is responsible for every candidate we hire, as well as building relationships with local universities to establish a pipeline of candidates. This strategy worked well in 2022 for us.”

Allowing employees to work from home is not something many Logistics companies can incorporate into their businesses. Struyk said, “Ever since we improved our cyber security software and moved towards a cloud-based system at TMX, it has allowed our employees to access files from home more securely. We still believe there is no replacement for in-office collaboration, which allows for better communication and teamwork for our employees.”

Zambo agreed, noting, “Ally Global has not embraced remote work culture. It is possible, but it creates too many inefficiencies. First, in international logistics, we are still utilizing physical paper. We need to send physical documents to the bank, our clients, and their customers. It is not possible to have a documentation team 100%

remote that needs to send out courier packages, receive courier packages and produce sets of documents remotely with any level of efficiency. In addition to a lack of efficiencies, we believe remote work destroys company culture. To be a cohesive team, we need to be together. Zoom calls don’t cut it.”

The logistics industry is undergoing a substantial transformation, with innovations emerging that are specifically designed to support the hardwood lumber industry. By embracing new technologies, expanding customer service, and increasing employee retention, logistics companies can position themselves for great success in the years to come.

SOURCES:

www.supplychainbrain.com/blogs/1-think-tank/post/36031-six-logisticstrends-to-watch-for-in-2023

www.logisticsmgmt.com/article/2023_rate_outlook_will_shippers_catch_a_ break

www.industryweek.com/supply-chain/logistics/article/21257688/supply-chainsnags-or-full-speed-ahead-what-logistics-looks-like-in-2023

www.world-grain.com/articles/17902-us-ag-logistics-forecast-to-improvein-2023

https://supplychaindigital.com/digital-supply-chain/2023-predictions-forlogistics-supply-chain-procurement

“At TMX, we have invested in technologies that have improved our cyber security, and we are constantly updating our Transportation Management System to help us be more efficient.”

Curtis Struyk President of TMX Shipping

RIFT & QUARTERED LUMBER

By DANA SPESSERT, Chief Inspector

In this month’s article, I would like to explain some of the issues surrounding rift and quartered-cut lumber. Let me start with a couple of facts. The NHLA Rules Book does not contain the word “rift” in any context, including definitions. To my knowledge, no “official” description of rift lumber is recorded.

The hardwood industry and many end users understand rift to be straight grain within the Cuttings of the boards. The grain’s angle to the board’s face is typically 30 to 60 degrees, with 45 degrees considered optimal. In comparison, quartered lumber is typically 60 to 90 degrees, with 90 degrees being optimum, as this is where the fleck (or rays) are shown on the face.

As hardwood market prices fluctuate, like they always do, sawmills look for opportunities to increase profits—as they should. One of those areas is the way in which they saw logs to create different grain patterns, in this case, rift and quartered.

There are many companies that specialize in rift and quartered lumber. Their mills are able to cut the logs into quarters and saw them the traditional way, which produces virtually all boards with a rift or quartered grain.

When NHLA gets involved in issues with rift and quartered disputes, we have guidance within the Rules Book. Although there is no official definition of rift, in the 2023 NHLA Rules Book, on page 10, paragraph 35, under the heading of “Quartered Lumber,” it states:

“In species where figure is not required, pieces shall be considered quartered when 80% of the surface of the required cuttings in the aggregate shows the radial grain at an angle of 45˚ or less with one face.”

When an Inspector is grading for “Quartered Lumber,” they will not be looking at the end of the board to determine the grain pattern; they will be looking for Clear Face Cuttings, size, and the number of Cutting Units, to establish the grade. After selecting the grade, they will determine if the Cuttings contain a radial grain of at least 80%, which would fall under the Rule stated above. The entire Cutting does not need to show the radial or straight grain to

be considered rift or quartered in the species that does not require figure or “fleck.”

For Oak, specifically, the Rule is on page 27, under the heading of “Quarter Sawn Red Oak, White Oak, and Locust” it states:

“90% of one face of the required cutting area in the aggregate shall show figure.”

In the above statement, the Inspector will determine the grade, then look for figure or “fleck” (cross-section of the rays), and to consider the board to be “Quarter Sawn,” each Cutting needs to show 90%. If the Cuttings have less than 90% figure or “fleck” (cross-section of the rays), then they would call it “Rift” (radial grain) provided it meets the requirements stated on page 10, paragraph 35.

If you have any questions please reach out to me at d.spessert@nhla.com or 901-399-7551.

NHLA PROVIDES EDUCATION AND TRAINING TO IMPROVE YOUR BOTTOM LINE

MAR

March 20-31

Inspector Training School Online Training Program

MODULE 1

Two weeks of hands-on training.

Venue: NHLA Headquarters Location: Memphis, TN

Module 2: Online study Module 3: Three weeks hands-on training and final testing at NHLA headquarters.

Instructor: Roman Matyushchenko, ITS Instructor

APR

April 24-26

Intro to Hardwood Lumber Grading

Intro class to gain a basic understanding of the NHLA hardwood lumber grading rules and how the rules affect the value of lumber.

Venue: NHLA Headquarters

Location: Memphis, TN

Instructor: Roman Matyushchenko, ITS Instructor

JUNE

June 5- July 28

Inspector Training School

202nd Class

Traditional 8-week hands-on training to achieve the certificate of completion in Hardwood Lumber Inspection.

Venue: Venango Technology Center Location: Oil City, PA

Instructor: Roman Matyushchenko, ITS Instructor

AUG

Aug. 21- Sept. 1

Inspector Training School Online Training Program MODULE 1

Two weeks of hands-on training.

Venue: NHLA Headquarters Location: Memphis, TN

Module 2: Online study Module 3: Three weeks hands-on training and final testing at NHLA headquarters.

Instructor: Roman Matyushchenko, ITS Instructor

SEPT

Sept. 6-8

Intro to Hardwood Lumber Grading

Intro class to gain a basic understanding of the NHLA hardwood lumber grading rules and how the rules affect the value of lumber.

Venue: NHLA Headquarters Location: Memphis, TN

Instructor: Roman Matyushchenko, ITS Instructor

Sept. 25- Nov. 17

Inspector Training School

203rd Class

Traditional 8-week hands-on training to achieve the certificate of completion in Hardwood Lumber Inspection.

Venue: NHLA Headquarters Location: Memphis, TN

Instructor: Roman Matyushchenko, ITS Instructor

OCT

Oct. 23-27

Intro to Hardwood Lumber Grading

Intro class to gain a basic understanding of the NHLA hardwood lumber grading rules and how the rules affect the value of lumber.

Venue: Wood-Mizer, LLC

Location: Indianapolis, IN

Instructor: Kevin Evilsizer, National Inspector

NOV

Nov. 27-Dec. 8

Inspector Training School Online Training Program MODULE 1

Two weeks of hands-on training.

Venue: NHLA Headquarters Location: Memphis, TN

Module 2: Online study Module 3: Three weeks hands-on training and final testing at NHLA headquarters.

Instructor: Roman Matyushchenko, ITS Instructor

COMMODITY TRADER - TAMPA, FL

TAMPA INTERNATIONAL FOREST PRODUCTS

Tampa International Forest Products is a significant player in the wood products industry, and we have been recognized as one of the premier commodity trading companies to work for.

As a commodity trader at TIFP, you will contribute to the company’s success through the buying and selling of forest products – while providing market intelligence to customers, managing risk and margin, and engaging in business development. Each trader runs their own desk with full autonomy to source, analyze, and pursue deals and clients. With no two traders sharing the same approach, each gets to choose how they run their desk - who they sell to, how they sell, what they sell, and how much, which creates an entrepreneurial work environment. We provide our traders with a base salary during training and transition them to commission with uncapped earning potential.

Skills & Experience Required

• High energy with an entrepreneurial spirit

•

•

• Possess strong interpersonal and communication skills

• Ability to prioritize and perform multiple activities

• A strong desire to succeed and manage your own business

• Must be comfortable with Excel, Word, Google Docs---etc. Salary

HARDWOOD MARKETS MATTER

Hardwood Markets Matter and it is important for NHLA to share market details of the entire Hardwood Industry. We appreciate the support of allied associations and publishers in gathering and sharing this important market information that can help you understand the complete hardwood industry picture. www.hardwoodreview.com

For the last decade, U.S. hardwood lumber exporters put much of their efforts into Asia, which made sense because more than half of all U.S. exports went to the region. However, beginning with the U.S-China trade war in mid-2018—and furthered by COVID-related supply chain snarls—wood products manufacturing, especially furniture, has been undergoing a global shift. One of the results has been rather explosive growth in hardwood lumber shipments to Mexico. Mexican manufacturers whose primary market—and primary source of raw materials—is the U.S. hold a decided geographical (shipping) advantage over Asian and other global manufacturers. In addition, labor and energy are less expensive in Mexico than in China, and wood products manufacturers are an intensive users of both. As a result, even Chinese companies have moved some of their production to Mexico. Accordingly, Mexico’s share of total U.S. wooden furniture imports grew from 4% in 2018 to 7% in 2022, and the volume of wood mouldings arriving from Mexico more than doubled during the same period.

This manufacturing shift, coupled with the post-COVID rebound in consumer demand, pushed U.S. hardwood lumber exports to Mexico up 37% in 2021, to a new annual high of 155 million board feet (MMBF).

U.S. Hardwood Lumber Exports to Mexico

Exports were stronger still in 2022, with volumes through October already surpassing 2021’s 12-month total. Mexico accounted for 7.5% of all U.S. hardwood lumber exports in 2017, but 12.4% in 2022. That 4.9-percentage point increase equated to 73 MMBF more hardwood lumber shipped in 2022 than if Mexico’s share had remained at 7.5%. With the exception of Hickory and Cherry, U.S. shipments of every hardwood lumber species to Mexico in 2022 were outpacing 2020 and 2021 volumes through October. Additionally, Mexico was the only Top 5 global market to which shipments continued to hold strong through October—and at near-record levels—making it the most resilient major market in a sea of softening global economies.

www.ahec.org

THE CHINA QUESTION

By Tripp Pryor, AHEC International Program Manager

After three years of the strictest nation-wide lockdowns on Earth, China has finally ended their “Zero-COVID” policy. Quarantine requirements have been lifted, and travel into and around the country has become significantly easier for both international visitors and Chinese nationals. Just in time for Lunar New Year, families will be reunited, business can worry less about lockdowns, and the country can start to look forward to something more “normal”. There’s that word we’re all sick of hearing at this point – “normal”. What can normal possibly look like in a country that has been in a self-imposed bunker for the last three years?

In the immediate future, normal looks a little rough. The Director of the Henan Health Commission noted at a press conference on January 6th that the infection rate in his province was 89%. That’s over 88 million people in Henan province alone who have been infected just weeks after the zero-COVID policy was lifted. Lunar New Year holiday means millions of travelers will return to visit family in the countryside, and elderly people in rural areas are the least vaccinated demographic in China. The Chinese government has committed to opening the country, but time will tell if they hold that line or go back to targeted lockdowns in the face of large-scale outbreaks.

Even after the short-term obstacles with COVID are sorted out, there’s no guarantee that China will come roaring back. The Chinese housing market is still cause for concern. Beyond that, there have been tectonic shifts in global supply chains since 2019. More and more industries have diversified their operations outside of China to produce goods in SE Asia,

India, and Mexico. China is acutely aware of this, and as they open up for business they hope to re-establish these trade links before it’s too late.

In our industry, we’ve seen a dramatic drop in exports to China since 2017. With the trade war and now COVID, our lumber exports have stayed at roughly half of the pre-trade war level since 2019. The featured graph here shows exports of US hardwood lumber to China compared to exports to all other markets combined. China went from buying well over half of all US lumber exports to only accounting for 37% as of 2022. This is their lowest market share in a decade. Encouragingly, total exports are up in spite of reduced Chinese demand. Over the last two years, growth in places like Mexico, the UK and Europe, SE Asia, and Japan have brought us back over $2 billion and 3 million m3 in lumber exports, even though China has remained flat.

The changes in COVID policy in China are encouraging, but may not be an immediate boost to US hardwood exports. How do we continue to develop other regions and grow our markets without once again becoming over reliant on China? The American Hardwood Export Council has a full schedule of events in 2023 that will be a cost-effective way for your company to connect with international buyers. Some upcoming events include pavilions in New Delhi, India; Dubai WoodShow; Interzum Cologne, Germany; TechnoMueble in Guadalajara, Mexico; VietnamWood; Intermob in Istanbul, Turkey; and our annual AHEC Asia Convention in Kuala Lumpur, Malaysia this June. For more information on export markets and AHEC activities, please reach out to me at tpryor@ahec.org

HONORING TRADITION WHILE INCORPORATING GROWTH TACTICS

By Nate Irby, Ph.D., Railway Tie Association

The Railway Tie Association (RTA) was organized in 1919. Predecessor groups, dating back to the late 1800s, that included The National Association of Railroad Tie Producers, were formed to support the railroad tie industry and to preserve the forest through conservation. The purpose of the RTA is to promote the economical and environmentally sound use of wood crossties. The Association is involved in research into all aspects of the crosstie industry and ongoing activities dealing with sound forest management, conservation of timber resources, timber processing, wood preservation, industry economics and statistics, and safety of industry workers. RTA works to keep wood crosstie markets strong and sustainable.

We also provide in-person meetings throughout the year to collaborate, educate, enlighten and inspire our membership (and each other): Tie Grading Seminar, Member-only Field Trip, and Annual Technical Conference & Symposium. Our presence in the industry is well-known, especially for the facets aforementioned, but our growth catalysts are not yet clearly defined. It is my belief those sustaining outlets will materialize through expansion of education, technical services and governmental affairs activities to propel the RTA into the future. However, we will maintain our current host of offerings through good stewardship of what is working and is our foundation.

To foster a full paradigm shift in these growth areas is not proper tact. Incremental and impactful advances on each front will be key to learning, adapting, and then forging ahead. As you venture out into the world and find a place to join in an RTA event, or by simply viewing the rta.org website or RTA social media content, please provide us feedback on how we can potentially better serve our constituency, and perhaps be more inclusive to capture a broader membership base, all-the-while honoring tradition.

www.hmr.com

The HMR Demand Index (HDI) is a feature in HMR Executive® that illustrates monthly trends in reported demand from 10 major domestic markets for hardwood lumber. Components of the index are color coded with various shades of blue when demand is slow, they transition to gray when demand is fair, and then to light red and deep red when demand moves from good to strong.

Index for January which is published the first week of February.

Cabinets

Residential Flrg.

Truck Trailer Flrg.

Upholst. Furniture

Wood Furniture

Moulding/Millwork

Wood Components

Board Road

Pallets

Railroad Ties

www.nwfa.org

At the time of the NWFA/Hardwood Floors magazine 2023 Industry Outlook survey, which was taken in the summer of 2022, more than 86 percent of all NWFA members reported continued supply chain disruption. They had experienced business impacts including lost sales, longer lead times, increased inventory holdings, increased pricing, and increased back orders. To combat supply chain disruption, NWFA members reported plans to source from new suppliers, as well as improve communication with current suppliers.

ONE SOFTWARE PARTNER FROM TIMBER TO CONSUMER