2018 September Hardwood Matters by National Hardwood Lumber Association

TH E VOIC E O F THE HARDWOOD IN DUSTRY

H A R D W O O D M AT T E R S Septemb er 2 0 18

The Future of US-China Hardwood Trade T H E O F F I C I A L P U B L I C AT I O N O F T H E N AT I O N A L H A R D W O O D L U M B E R A S S O C I AT I O N S T R O N G R O O T S . G L O B A L R E A C H . | W W W. N H L A . C O M

CONTENTS September 2018 • Issue 193

WHAT'S INSIDE 12

feature

instant

12 The Future of US-China Hardwood Trade

TOP POST OF THE MONTH at facebook.com/NHLAOfficial

departments 7 Accolades 8 Legislative Log 10 Industry Insights 14 Member Spotlight 16 Rules Corner

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ONLINE

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President’s Message Educational Calendar Job Board

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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 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 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 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.

ADVERTISER INDEX 9 DMSi IBC Food Protection Services 3

King City/Northway Forwarding

EXECUTIVE COMMITTEE

MISSION LEADERS

Brent Stief Huron Forest Products President

Jon Syre Cascade Hardwood LLC Unique Services

Darwin Murray McClain Forest Products Vice President

Nordeck Thompson Thompson Appalachian Hardwoods Rules

Pem Jenkins Turn Bull Lumber Co. Past President 2014-2016

Orn Gudmundsson, Jr. Northland Corporation Structure

NHLA STAFF

Mike Powers Maley & Wertz Industry Advocacy & Promotion

Lorna D. Christie CEO l.christie@nhla.com Amanda Boutwell Marketing and Communications Manager a.boutwell@nhla.com Renee Hornsby Director of Communications/Editor r.hornsby@nhla.com

■■■ Trisha Clariana Office Manager Desirée Freeman Controller

IFC Pike Lumber Company, Inc.

Julia Ganey Member Relations Manager

5 RossiGroup

Rich Hascher Inspector Training School Instructor

TMX Shipping Co.

For advertising inquiries: Contact John Hester, Director of Membership at j.hester@nhla.com or 901-399-7558.

John Hester Director of Membership and Business Development Carol McElya Accounting Assistant & Publications Becky Miller Inspector Training School Administrator Vicky Quiñones Simms Membership Development Manager Dana Spessert Chief Inspector

Kevin Gillette Tioga Hardwoods Membership & Networking COMMITTEE CHAIRS Dave Mayfield Mayfield Lumber Co. Membership Dave Bramlage Cole Hardwood, Inc. Promotion & Advocacy Garner Robinson Robinson Lumber Convention Pem Jenkins Turn Bull Lumber Co. Nominating Steve Jones Ron Jones Hardwood Sales, Inc Inspection Services Orn Gudmundsson, Jr. Northland Corporation Finance Bucky Pescaglia Missouri-Pacific Lumber Co., Inc. ITS/Continuing Education Stephanie VanDystadt DV Hardwoods, Inc. Communications & Marketing Joe Snyder Fitzpatrick & Weller, Inc. Rules Darwin Murray McClain Forest Products Strategic Planning

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PRESIDENT’S MESSAGE

2018 NHLA ANNUAL CONVENTION & EXHIBIT SHOWCASE

ll the recent commotion about trade wars has me thinking about what NHLA can do to help our members in these uncertain times. To do this, we need to provide them with access to accurate and timely information on an ongoing basis.

NHLA is certainly committed to keeping our members informed about emerging issues that have the potential to impact their business. While members tell us our news alerts and publications are helpful, we also understand there is no substitute for effective networking to ensure you company is aware of what’s happening in the marketplace. And there is no better place for effective networking than the upcoming NHLA Convention October 2-4 in Toronto, Canada. We all learn from interaction with others. How many times have you come back from a NHLA Convention with a new thought or contact for increasing your business? The Toronto Convention will not only offer networking, but the opportunity to learn about the most recent technologies, business management, equipment and lumber pricing trends. People talk at conventions and those who listen well can learn a lot. Our first thought when prices turn down is to reign in expenses, yet the efficiency of convention attendance for all valuable employees just makes sense. Where else can you see so many existing and potential new business partners in such a short time for so little? Anybody with salesmen on the road knows the cost of travel, and the time it takes to visit clients individually. Attending the convention to meet with buyers and sellers all gathered in one place is a smart, cost effective business strategy. In addition to the networking, the NHLA Convention offers seminars and speakers designed with your needs in mind. While

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you may not remember an entire speech, most of us do remember a takeaway that has helped us become better leaders. My favorite convention takeaways are “Hire tough, Manage easy” about the need to be thorough when hiring and “They are waiting for you to call,” referring to sales person procrastination, especially in slow markets. I’m sure you have your own. This year we will have a presentation by Dana Spessert on our newest member benefit, the Sawmill Yield Analysis study. We are already receiving glowing testimonials from the early clients of this program. This is one of those seminars offered at the NHLA Convention that you can’t afford to miss! The study includes a plan of action to help members recover on average $500,000 dollars in “lost profits” annually. There are a number of reasons why you should attend the NHLA Toronto Convention. We have already reported on the wonderful sights and sounds of the city. The education programs have been planned with your needs in mind, including how to manage your business in a difficult market. Whether you are a big or small company, trade shows level the playing field. With proper research and planning, the cost of your attendance can be easily made up in new leads and sales. I look forward to seeing you in Toronto.

Brent Stief, NHLA President | Huron Forest Products brent@huronfp.com

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A new beginning for the Gold Standard for Cherry from Emporium, PA The Rossi Group announces the launch of its new State of the Art high-tech sawmill at Emporium in Pennsylvania to serve domestic and export markets from the sustainable Allegheny Forest resources with the highest quality Cherry and many other hardwood species.

Rossi Group LLC, www.rossilumber.com Tel: 1(860) 6323505 W W W. N H L A .C O M

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2018 CONVENTION SPEAKERS This yearâ&#x20AC;&#x2122;s convention will provide specialized educational resources to help your business realize lost profits, increase efficiency, plan for the future and in the end grow your bottom line. ATTEND THE 2018 NHLA ANNUAL CONVENTION & COME GROW WITH US! Register at www.nhla.com/networking/convention.

Paul Moya

CEO of Millennial Labs Opening Session Keynote Speaker Wednesday, October 3 at 8am

Andy Goodman

Co-Founder and Director of The Goodman Center General Session Keynote Speaker Thursday, October 4 at 9:15am How To Tell Your Story Thursday, October 4 at 1:30-3pm

Michael S. Snow

AHEC Executive Director Export Market Trends Wednesday, October 3 at 10:30-11:30am

Josh Baron

Co-founder and Partner at BanyanGlobal The Keys to Multi-Generational Family Ownership: Strong Roots Build A Lasting Legacy Wednesday, October 3 at 1:30-2:30pm

Andrew Waugh

CEO of Millennial Labs Building Future Markets with Hardwood CLT Wednesday, October 3 at 1:30-2:30pm

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Dr. Henry Quesada

Associate Professor, Extension Specialist at Virginia Tech Building Future Markets with Hardwood CLT Wednesday, October 3 at 1:30-2:30pm

Dana Spessert

NHLA Chief Inspector Loss Profit Recovery made possible by the NHLA Yield Analysis Program Wednesday, October 3 at 3-4pm

Andy Moses

Senior Vice-President of Global Products for Penske Logistics Logistics & Transportation: Here and Now Thursday, October 4 at 11am-12pm

Bryan F. Thornton, CISSP, EnCE

Founder and CEO of Net Reaction, LLC Preventing the Most Prevalent Cyber Attacks Thursday, October 4 at 11am-12pm

Brooks Mendall

President and CEO at Forisk Forest Industry Capital Investments & the Market Implications for Hardwood Logs Thursday, October 4 at 1:30-2:30pm

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ACCOLADES

Congratulations

Milestone Members NHLA would like to recognize our members who are celebrating a milestone anniversary of 5 years or more during the month of September.

5 YEARS CLC Hardwoods | Active U1 | September 2013

Welcome New Members ACTIVE U1 MEMBERS Stone's Sawmill/ Sterling NY Fox River Hardwoods/ Bloomfield, IA Synetic Solutions Corp./ Lakeland, FL Triangle Log & Lumber/ Griggsville, IL

Marietta Wood Supply | Active U2 | September 2013

10 YEARS Penn-Sylvan International, Inc. | Active U2 | September 2008 A. W. Stiles Contractor | Sustaining | September 2008

20 YEARS

PARTNER MEMBER Changjiang Furniture/ Guangdong, China Qingdao Double Bears Timber/ Shandong, China SUSTAINING MEMBERS MM Industrial Sales/ Kingsford, MI Cathild, Inc./ Victoriaville, QC Canada

Maine Woods Co., LLC | Active U2 | September 1998

50 YEARS Ralph Taylor Lumber Co., Inc. | Active U2 | September 1968 W W W. N H L A .C O M

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LEGISLATIVE LOG

Year by DANA COLE, Executive Director Hardwood Federation

hot, humid summer is upon us in Washington D.C. The House of Representatives has adjourned for the traditional summer recess (and for a month of extreme campaigning). The Senate, on the other hand, is going to be in town for most of the month finishing up budget debates and taking up judicial nominations . . . including that of a Supreme Court Justice. The Hardwood Federation uses these last few weeks of summer to look forward to the fall session and to consider how to best influence legislation and policies that will be moving. Because this is an election year, Congressional time in D.C. will be short and Members will be looking to take action that they can bring back to the campaign trail in October. Our crystal ball is a bit cloudy this year, but it seems clear that two issues will be of significant interest in the fall . . . and a few more could gain steam during the Lame Duck session after the November 6 election. The reauthorization of the 2018 Farm Bill has moved steadily forward this year. The House and Senate have each passed their own versions of reauthorization legislation and a Conference Committee will work towards reconciling points of difference (and there are many) between the two. It is our hope that agreement can be reached by the end of September when the current Farm Bill expires. If that is impossible, it will become very important that a short-term extension be agreed to with the intention of passing a final bill by the end of the year. There does not appear to be much appetite to extend this issue beyond the end of the year. A new Congress will most likely want to start the process all over again, which would mean continued uncertainty and delays for key hardwood programs contained within the Farm Bill, including forest management reform measures, export promotion funding, and a community wood energy program that will support installation of woody biomass heat sources and could potentially create markets for fuel made of sawmill residuals.

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Trade has dominated the conversation in Washington, the news cycle and the minds of manufacturers of every industry sector, including hardwood, for the last few months and will almost certainly continue to be an issue of debate going into the fall months. U.S. hardwood and products are exported around the world and are in high demand and it is vital that markets remain open and trade practices are fair for the industryâ&#x20AC;&#x2122;s long-term health and viability. There is some hope that an agreement can be reached on NAFTA in August and a first few steps in the right direction have been taken towards a deal with the European Union. Analysts continue to believe that negotiations with China will continue for the foreseeable future. The Hardwood Federation has long supported fair and open markets and we will continue to encourage the Administration to engage in productive negotiations that will provide hardwood companies competitive access to foreign markets around the world. A few issues that could also see action before the elections or in the Lame Duck session include amendments to the Endangered Species Act (ESA) and a second round of Tax Reform measures. At the end of July, there were a flurry of hearings, proposed legislation and regulatory reform efforts aimed at the ESA. This is an extremely divisive issue and the potential for any real change is slim, but it could be used as a talking point for the election for both Democrats and Republicans. A second round of Tax Reform is a goal of both the Administration and Congressional Republicans. Again, chances of anything passing the House and Senate before the elections are very low but depending on election results and which party controls the 116th Congress in January, this could serve as a time to fine tune a plan for late 2018 or 2019. The Hardwood Federation will be tracking these issues and more as we move from summer to fall. We hope your summer has been a pleasant one and look forward to working with you, NHLA leadership and our wood products allies towards a successful legislative season! W W W. N H L A .C O M

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INDUSTRY INSIGHTS

Sawmill Capacity, Lumber Tariffs and Hardwood Lumber Exports by BROOKS MENDELL, PH.D., Forisk Consulting

his article is the third quarterly industry update we will publish with NHLA in advance of my presentation at NHLAâ&#x20AC;&#x2122;s Convention in Toronto later this year. The purpose of these articles is to provide an update on trends across the forest industry and timberland-investing sector. Please feel free to contact me with questions!

This quarter begins with notes on how North American sawmill capacity has evolved over time. Then, we highlight implications of tariffs on lumber exports from Canada to the U.S. Finally, we provide an update on hardwood lumber exports.

NORTH AMERICAN SAWMILL CAPACITY

What do you do with new information, when the situation changes to such an extent it challenges the viability and sustainability of your mill, firm or sector? Within the North American forest products industry we have multiple, ongoing examples of firms and sectors adapting to factors within and external to the industry in order to leverage opportunities and mitigate risk. The strategic decisions reflect a massive chessboard, where relative advantages accrue to beneficial moves properly timed. Capacity provides a critical measure of forest industry status and change. We see this in reviewing the nature and structure of sawmill capacity in North America over the past ten years and even looking forward based on announced investments. The figure below summarizes the number of sawmills and their average capacity since 2008 along with the expected profile of the industry through 2020. Between 2008 and 2018, the number of sawmills decreased by 15% (from 761 to 647) while average softwood sawmill size increased 16% (from 96 to 112 MMBF).

Average North American Sawmill Capacity by Region, 2008-2020

Data source: Forisk Consulting Note: Sawmills with less than 5 MMBF capacity are not considered in the average.

As the data in the figure indicates, the recession accelerated this transition. While a number of regions have been expanding the capacity of existing mills, only in the South is capacity growth occurring through substantial addition of new sawmills as well.

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LUMBER TARIFFS AND TRADE VOLUMES

The United States consumes far more softwood lumber than it produces. As a result, the U.S. imports billions of board feet annually, over 90% of which comes from Canada. However, this trade relationship has a complicated history and present situation: • In 2006 the Canadian-US Softwood Lumber Agreement (SLA) was put in place. • In October 2015, the SLA expired. • In October 2016, the one-year freeze on tariffs and filing of trade complaints expired.

Looking forward, this trade dynamic depends on three knowable levers: Canadian exports to other countries, Canadian domestic demand for its own homes, and U.S. housing markets. The more that Canada uses domestically or ships to other countries, the less is available for export to the U.S. Our view: most incremental lumber production, regardless the SLA negotiations or mechanisms, will continue to accrue to the U.S. South.

HARDWOOD (AND TOTAL) LUMBER EXPORTS

Hardwood lumber export volumes rose 10% year-over-year through mid-year 2018. While the South continued to lead the U.S. in hardwood lumber export volumes, with 51% of the market, the U.S. North led in growth in absolute terms.

• In April 2017, the U.S. imposed a 20% tariff on softwood lumber Through May 2018, 38% of all U.S. lumber exports were destined imported from Canada. for China. China imported 55% of U.S. hardwood lumber and 23% of U.S. softwood lumber exports through May 2018. Canada and • In December 2018, the U.S. finalizes the duty case with rates Mexico were the second and third largest importers of U.S. lumber ranging from 10% to 24%. through May 2018. Combined, they represented 29% of all U.S. Our analysis of Canadian capacity and U.S. demand has long been lumber exports, which is still less than China’s market share. Most that the story on softwood lumber flows from Canada to the U.S. U.S. softwood lumber exports go to our closest neighbors: 21% of has been written: regardless what happens with tariffs and trade softwood lumber exports went to Canada and 16% to Mexico. Meanagreements, Canadian volumes will never in our lifetimes approach while, Canada was the second largest importer of hardwood lumber their peaks from 2004-2006. In addition, they have little, if any, with 12% of the market, followed by Vietnam with 10%. room to grow above current levels over the next twenty years. Consider the monthly trade data relative to long-term trends in the figure below. Canada exported over 20 billion board feet annually to the U.S. from 2004 through 2006, during a period when Canada had over 38 BBFT of capacity. Today, Canada exports less than 15 BBFT to the U.S. – and the trend is flat to falling – with Forisk mill-by-mill analysis putting Canada’s capacity below 31 BBFT. The monthly data, with the October 2015 expiry of the SLA and the December 2017 duty case resolution marked with red vertical lines, highlight the volatile nature of trade flows relative to tariffs, with temporary declines and increases, and a long-term continuation of trend.

U.S. Lumber Exports by Destination Country

U.S. Softwood Lumber Imports by Month, MBF

Data: US Census; figure: Q3 2018 Forisk Research Quarterly (FRQ)

Wood flows and cash flows matter. All of the above reinforces the need to watch, track and analyze the trade flows of forest products and the investments into industry capacity across North America by market and mill type, regardless legislative distractions.

Data: U.S. Census; Figure: Q3 2018 Forisk Research Quarterly Note: Red lines mark the October 2015 SLA expiration and December 2017 tariff confirmation

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Dr. Brooks Mendell is President and CEO at Forisk, where he leads the firm’s research program. Founded by Dr. Mendell in 2004, Forisk publishes the Forisk Research Quarterly, which provides market analysis, operations research and timber forecasts to senior management and investors in North America’s forest products industry and timberland investing sectors. S E P T E M B E R 2 0 1 8 H A R D W O O D M AT T E R S |

The Future of US-China Hardwood Trade: Strong headwinds were against us even before the “Trade War” took center stage

by MICHAEL SNOW, Executive Director AHEC

ince 2009 China has been the world’s largest importer and consumer of hardwood lumber, and the United States has long been the world’s largest producer and exporter of hardwoods. That relationship has continually developed and China now consumes over one-half of all US hardwood exports. 2017 was another record year for trade between the two countries as our hardwood lumber exports to China were up 26% over 2016’s record levels, and totaled over $1.5 billion. That accounts for 55% of all US hardwood lumber exports by value. This continuous expansion of trade has supported hundreds of thousands of jobs and billions of dollars in economic growth for the Chinese economy while at the same time almost single handedly keeping many in the domestic US hardwood industry afloat. Encouragingly, driven by consistent GDP growth in China and a booming middle class, the vast majority of US hardwood exported to China over the past several years remains there and is consumed in the form of

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finished goods in the domestic market. As we pass the mid point of 2018 however, numerous clouds are appearing on the horizon, and not just in the form of tariffs and trade wars. Looking at the 6 month 2018 export figures one would be hardpressed to find evidence of the growing pessimism in the marketplace. Indeed, through June US hardwood lumber exports to China surpassed $802 million—an 11% increase over the same period in 2017. (Figure1). On a volume basis the growth was a more modest 4% but still represents the highest 6-month total ever. (Figure 2). I also believe that in the long term, there is still a vast untapped potential in China, particularly in second and third-tier cities away from the coast. Nevertheless, warning signs of tougher times to come are evident in several quarters, perhaps none more so than concern over China’s commercial and residential real estate markets, major drivers of Chinese demand for American hardwoods. A recent article in The W W W. N H L A .C O M

(Figure 1)

(Figure 2)

(Figure 3)

(Figure 4)

Economist reported that China’s housing vacancy rate has surpassed Japan’s and now stands at an estimated 13%. This has led to concerns over future investments in housing as the Chinese government has tightened lending requirements and reduced liquidity in the consumer banking system. Commercial real estate is also on shaky ground. The same Economist article examined the difficulties in the city of Tianjin where the 2015 AHEC China Convention was held. For much of the last decade Tianjin was one of the fastest growing of China’s mega-cities. The city’s new financial district, Binhai, was hailed as China’s Manhattan and widely celebrated as an example of boundless growth and opportunity. Now, however, nearly 70% of office space in Binhai remains vacant or under-utilized. The reason Tianjin’s woes are so telling is that the city is well situated and should be doing much better. It is only a 30-minute high-speed train ride from Beijing, has a large modern port and a skilled labor

pool fed by top universities. If Tianjin can have this many problems, what does that mean for the rest of China?

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Other factors that lead to pessimism in the Chinese market include the fact that hardwood inventories in major cities are at very high levels already and reports the Chinese government has been aggressively enforcing environmental regulations on manufacturing emissions that have led to the closure of several furniture and flooring facilities. Many of these businesses had previously been major consumers of US hardwood lumber. In addition, China has quietly stopped intervening in the foreign exchange market to prop up the RMB and have let it depreciate by over 10% in the past six months making China’s exports more competitive and imports more expensive. (Figure 3). (Continued on page 20) S E P T E M B E R 2 0 1 8 H A R D W O O D M AT T E R S |

MEMBER SPOTLIGHT TMX SHIPPING

TMX SHIPPING:

A COMPANY ON THE MOVE

n 1982, a constitutional amendment that would guarantee equal rights for women failed to pass Congress. But, that didnâ&#x20AC;&#x2122;t stop Carrie Stallings, a single mother in Morehead City, North Carolina, from starting a small business in an industry dominated by men. Flash forward 36-years, and now that business is a household name in the forest products industry: TMX Shipping.

Struyk Family from left to right: Avery Struyk, Russell Struyk, Carrie Stallings, Curtis Struyk, CJ Struyk. Above: CJ Struyk and Curtis Struyk in Beaufort, North Carolina.

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TMX SHIPPING IS MORE THAN A SUCCESS STORY ABOUT A SHIPPING BUSINESS. IT’S A SUCCESS STORY ABOUT A FAMILY SHIPPING BUSINESS WITH THEIR EYE ON THE FUTURE. Carrie Stallings had humble beginnings with forest products. Instead of fighting other businesses to ship tobacco (which was the big money-maker at the time), she focused on the forest products industry. Long before fax machines and email, shipping businesses could only handle shipments out of ports in their city and lumber wasn’t allowed to be transported in shipping containers. Carrie changed the industry. She figured out how to ship lumber in containers and, even better, she came up with a way to ship those containers out of other ports. Meanwhile, Carrie’s son, Curtis Struyk, had just graduated from high school and was playing football for East Carolina University while he earned a degree in construction management. He dreamed of being an NFL player and saw that dream come to fruition when he was picked up by the New York Giants. When Curtis was released from the team in 1988, he called his mother and told her that he was going to find a job in the construction field. Carrie had other ideas. She said, “Curtis, I’ll make you Vice President from day one if you come to work with me.” How could Curtis say no? The first year, Curtis did nothing but make photocopies for his mother while she taught him everything she knew about the shipping industry. Then he started calling on their ten customers, which he found easy because most people in the industry liked talking about three things: hunting, fishing, and football. That was right up Curtis’ alley and he spent the following years adding client after client to the business. Later, Struyk’s brother, Russell, joined the business. In 1994, the course of their business changed forever when they created the U.S. Lumber Shipper’s Association. Up until then, each customer had to negotiate rates with ocean carriers individually. By bringing all of their customers under one umbrella, they gained more leverage and buying power. By 1997 they took their business to the next level when they formed an NVOOC (non-vessel owning ocean carrier), called Carolina Ocean Lines, which allowed them to work with carriers who shipped across the globe. W W W. N H L A .C O M

After the September 11 attacks on the U.S. in 2001, everything changed. Suddenly there were strict time limits for filing shipping documents and failure to complete those filings within a small window of time meant steep penalties. The profit of 10 shipments could be wiped out by just one truck missing a cutoff date and being forced to sit at the port for a week. There was very little room for error and they recognized that their customers needed experts to guide them. Hence the name TMX Shipping: Transportation Management Experts. Since its inception, TMX has provided unmatched customer service and value. Superior customer service is their number one goal and Struyk says it has been a major contributing factor to their longterm success. Each TMX customer receives personalized service through a single account manager who oversees every phase of their cargo shipments, ensuring that no detail is mishandled or falls through the cracks. Every TMX account manager is an expert who can handle it all. When asked what the future looks like for TMX, Struyk says it’s in the hands of the third generation. His son, C.J., joined the business two years ago and Russel’s daughter, Avery, is in college with plans to join the company after graduation. They will be the ones to decide how TMX grows from here, with Curtis saying, “It took a long time to build our brand. A lot of hard work. Today, we are known as the leading wood product exporter and largest container exporter in the United States. That’s something we are proud of.” What began with a single mom taking a chance on starting a small shipping business has now become a global business centered around family. TMX has grown substantially over the years and has invested even more in the forest product industry. They now employ 43 people and serve 250 customers.They offer door-to-door service with over 500 trucking companies on a daily basis. They ship out of every port in the United States, every major rail ramp, and their relationships with trucking companies go back as much as 30 years. TMX Shipping is more than a success story about a shipping business. It’s a success story about a family shipping business with their eye on the future. S E P T E M B E R 2 0 1 8 H A R D W O O D M AT T E R S |

RULES CORNER

Wane Limitations of FAS versus FAS 1 Face by DANA SPESSERT, NHLA Chief Inspector

ne of the blessings of being the NHLA Chief Inspector is having a field staff of highly trained and skilled National Inspectors. The National Inspectors are continually working with industry inspectors to assist and educate them along their journeys to become the best they can be. Something that is derived from the great work of our Inspectors is the feed-back that I get from the questions and concerns they hear in the field. This information helps me to ascertain the subjects for my monthly articles. This month I will begin with a question that has been posed a few times in the past couple of weeks. The question has been about the allowable wane on a Standard FAS board. This is the rule that pertains to FAS wane limitation, on page 14, paragraph 57: “Wane shall not exceed on either edge of the piece over one-half the length in the aggregate.” The wane limitation for FAS is different than the wane limitation for FAS 1 Face as there is no limitation for the width of wane on a FAS board on either face, provided the board meets the requirements for FAS on the poor side with the reverse side sound. The length of allowable wane on FAS is ½ the length of wane on both edges, the wane from both edges is not to be added together, the statement of “in the aggregate” pertains to the wane being added together on one edge only and this is done on each edge independently. I believe some of the confusion for the wane allowance on FAS comes from the wane allowance for FAS 1 Face or F1F. On page 16, paragraph 64, (second paragraph): “Wane on the No. 1 Common side is limited to the following: the width of wane from both edges, when added together, cannot exceed 1/3 the total width of the piece. The total length of wane on either edge cannot exceed 1/2 the length.”

side has no limit to the width of wane. The rule goes on to state that the limit on the length of wane is the same as FAS in that both edges can have ½ the length. One other area that can be causing confusion is the wane limitation for Selects. On page 16, paragraph 68, (second paragraph): “In pieces 6” and wider, wane on the No. 1 Common side is limited to the following: the width of wane from both edges, when added together, cannot exceed 1/3 the total width of the piece. The total length of wane on either edge cannot exceed 1/2 the length.” It is clearly stated that the 6” and wider wane restriction for Selects is exactly that of F1F. The only time in the Standard grades that you add the wane from both edges together for the wane limitation is on page 16, paragraph 69 under the Selects grade: “In pieces 4” and 5” wide, wane on either face is limited to the following: the width of wane from both edges when added together, cannot exceed 1/3 the total width of the piece. The total length of wane on both edges, when added together, cannot exceed 1/2 the length.“ The rule clearly states that only on 4” and 5” Selects that the length of wane is added together from both edges, cannot exceed 1/3 the width and is applied to both faces. All of the above page and paragraph numbers are from the 2015 version of the NHLA Rules Book. Contact Chief Inspector Dana Spessert at d.spessert@nhla.com or 901-399-7551.

As is clearly stated, the width of wane, when added together, cannot exceed 1/3 the width of the board, on the 1 Common side. The FAS

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EDUCATION & TRAINING For hardwood business owners and their employees Register for classes at www.nhla.com/calendar

SEPTEMBER

11-13

17-21

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: Kamps Hardwoods, Inc. Caledonia, MI

Venue: Wood-Mizer, LLC Indianapolis, IN

Instructor: Jack English, NHLA National Inspector

SEPTEMBER

OCTOBER

25-27

9-11

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: Missouri-Pacific Lumber Co., Inc. / Fayette, MO

Venue: HHP Inc. Henniker, NH

Instructor: Mark Bear, NHLA National Inspector

Instructor: Jack English, NHLA National Inspector

S E P T E M B E R 2 0 1 8 H A R D W O O D M AT T E R S

Instructor: Barry Kibbey, NHLA National Inspector

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EDUCATION IS KEY TO YOUR COMPANY’S SUCCESS "No better place to start in the lumber/forest industry. That knowledge can carry you in many avenues of our industry." —Michael Klingler, NHLA Inspector Training School 116th Class

For Inspector Training School info visit www.nhla.com/education/inspector-training-school

OCTOBER

! 9-11 w e N Walnut

15-18

Lumber Grading

This seminar is designed to teach Walnut lumber grading. This is the only species that will be discussed. Venue: Missouri-Pacific Lumber Co., Inc. / Fayette, MO Instructor: Mark Bear, NHLA National Inspector

OCTOBER

29-Nov. 16 Inspector Training School Progressive Program BLOCK 3

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: WV Wood Technology Center / Elkins, WV Instructor: Barry Kibbey, NHLA National Inspector

NOVEMBER

27-Dec. 7 Inspector Training School Progressive Program BLOCK 1

Alternative program to the 12week Inspector Training School Block 1: Two weeks of hands-on training Block 2: Online study time Block 3: Three weeks handson training and testing

Venue: NHLA Headquarters Memphis, TN

Instructor: Rich Hascher, NHLA ITS Instructor

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OCTOBER

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JOB BOARD YARD MANAGER

Frost Hardwood Lumber Company is seeking a Yard Manager. This position requires the management of the Yard crew and inventory, with the main objective being to direct the crew and the work assigned. Applicants must be able to communicate effectively and should have prior lead experience. Industry knowledge required; management experience preferred. Full benefits (medical, dental, vision, life, 401(k) eligible), paid time off, including holidays. To apply, email your resume to: kbland@frosthardwood.com. Frost Hardwood Lumber Company 6565 Miramar Road | San Diego, California92121 Phone: 858-455-9060 | Fax: 858-455-0437

HARDWOOD LUMBER GRADER/INSPECTOR

Clendenin Lumber Co. is seeking a hardwood lumber grader/inspector for its Donalds, SC sawmill. This is a great opportunity for an individual with prior lumber grading experience. This person would be grading green hardwood lumber with an emphasis on quality assurance. This is a full-time, permanent opportunity working for a world class hardwood lumber manufacturer. RESPONSIBILITIES: • Applies NHLA grading rules to inspect lumber at production rates, while maintaining the required grading accuracy • Communicates with sawyers, machine operators and maintenance to ensure a consistent flow of quality lumber • Work safely and help maintain a safe work environment EXPERIENCED REQUIRED: • NHLA certified or equivalent experience • Possess ability to accurately apply NHLA rules • Minimum of one (1) year experience grading green and kiln dried domestic lumber - this is not an entry level position • Experience and ability to work in a fast-paced manufacturing environment with a focus on safety and quality Competitive pay, full time, first shift, full plan of benefits.

HARDWOOD LUMBER HEAD SAW OPERATOR

Clendenin Lumber Co. is hiring for a hardwood lumber Head Saw Operator at its Donalds, SC sawmill. This is a great opportunity for an individual with prior sawyer experience. This person would manufacture green hardwood lumber from logs using state of the art carriages and scanning equipment. Must be able to determine optimum opening face to maximize value and fulfill cutting orders and production requirements; while also ensuring the quality of the lumber is held to company standards. This is a full-time, permanent opportunity working for a world class hardwood lumber manufacturer. HARDWOOD LUMBER SAWYER RESPONSIBILITIES: • Determine and execute optimum cutting pattern for breaking down logs • Perform minor maintenance (change saws, lubricate equipment, minor repairs, fix crossed up lumber, or jam ups) • Communicate with lumber inspectors, machine operators and maintenance to ensure a consistent flow of quality lumber • Ability to operate or learn to operate other machinery (gang, edger, sorter, bucket loaders) • Work safely and help maintain a safe work environment QUALIFICATIONS: • Ability to accurately apply NHLA rules to maximize grade recovery from logs • Must be safety and quality oriented • Two (2) years of hardwood grade sawing experience preferred - this is not an entry level position • Experience grading green and/or kiln dried domestic lumber preferred • Experience and ability to safely work in a fast-paced manufacturing environment Competitive pay, full time, first shift, full plan of benefits. To apply through the website visit To apply through the website visit www. baillie.com/careers or send resumes to nomalley@baillie.com

* To view current job postings or to post a job, visit www.nhla.com/industry-services/job-board.

To apply through the website visit www.baillie.com/careers or send resumes to nomalley@baillie.com.

(Continued from page 13) Now come the threatened tariffs. In early August, the Chinese government announced a list of $60 Billion worth of U.S. imports on which it plans to apply tariffs should the Trump Administration follow through with its latest threat to impose an additional 25% on $200 billion worth of Chinese goods. The retaliatory tariffs would include levies of up to 25% on US hardwood exports. It is important to note that the weakening of the Chinese currency discussed above will tamper the effects of the US tariffs on Chinese exports due to the stronger dollar and essentially amplify the Chinese tariffs on US exports by an additional 10 percent. There is no doubt that, should they happen, these tariffs would have a severe impact on our industry.

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Last but certainly not least, we are now witnessing an open and palpable “anti-Americanism” not only in China but in several other countries as well that at least threatens to drive buyers away even if difficult to quantify. One thing that concerns me is that we are waging trade wars simultaneously against not only China, but also NAFTA and the EU, which combined represent 82% of our hardwood exports! (Figure 4) The one message I am hearing consistently in my travels is “if the US doesn’t want to buy anything from us, why should we buy from you?” For an industry that depends on exports for more than half of its production, that is a question which should concern all of us.

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Come Grow With Us! 2018 NHLA Annual Convention & Exhibit Showcase October 2-4, 2018| Toronto, Canada

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SO MANY BENEFITS PACKED IN TO SO LITTLE TIME, AT SUCH A SMALL COST. ITâ&#x20AC;&#x2122;S WHY SO MANY HARDWOOD INDUSTRY PROFESSIONALS RETURN, YEAR AFTER YEAR. Register at www.nhla.com/networking/convention.