On Thinking Inside the Box

With the upcoming Super Bowl, we’ll soon see again that at the risk of sometimes being routine, the most basic skills on a football field like blocking and tackling are key to surviving playoffs and winning championships. On the trading floor, challenges in the second half of 2018 offered stark reminders of importance of performing well on the fundamentals that are key to delivering effective service for our mills and customers – in all markets.

In his practical “Building Sales” column at LBM Journal, author Rick Davis has been exploring a number of contrarian sales concepts. This month, he emphasizes the value of concentrating on the “tried and true ways”, by thinking “inside the box”. He argues: “It’s so easy to boast about being an outside-the-box thinker.. but everyone should first master the great ideas inside the box. High-powered sales people don’t ignore the skills that made them successful early in their careers.” In the article, Davis expands on four rudimentary sales skills:

  • Success starts with a cold call – “the most essential skill in the box”
  • Count contacts – “the law of averages will help you grow your business”
  • Let people share their story – “the best and oldest inside-the-box idea of them all”
  • Promise and deliver the things you can do easily – “sell what you can deliver in the normal course of business”.

We might suggest that lumber traders naturally have the materials with which to build the box inside of which to think.

BMC National Meeting, Las Vegas (photo credit: Brad Taylor, Dakeryn Industries)

19 Questions for 2019

Here are 19 questions that Harderblog will be watching next year, in search of answers:

1. Will the railways be better prepared for winter weather conditions?

2. Will the extreme price volatility in lumber markets this year persist in 2019?

3. Will Justin Trudeau still be Canada’s prime minister after Canada’s federal election scheduled on or before October 21, 2019?

4. Will Donald Trump still be America’s president by the same date?

5. Will Beto O’Rourke or Joe Biden emerge as the leading Democratic presidential nominee for 2020 by the end of 2019?

6. Will the 12 months of 2019 provide conclusive evidence that trade wars are “easy to win”?

7. Will noise about the border wall on the U.S. southern border have lessened by the end of 2019?

8. Will progress be reported in solutions for solving the opioid epidemic?

9. The American Psychiatric Association says anxiety levels jumped 7 per cent from 2017 to 2018. Will 2019 see a reduction in anxiety levels among the American general population?

10. Will 2019 see a reduction in anxiety levels among continent-wide lumber distributors?

11. Will Canadian softwood lumber exports to China (dropping each year since 2014) continue to decline?

12. Will an old-growth protection strategy be established in B.C.?

13. Will the accelerating rate of climate change evidenced in 2018 be exacerbated by global climate patterns experienced in 2019?

14. Will the U.S. repeat as the FIFA Women’s World Cup Champions?

15. Will the record number of homeless people identified in the City of Vancouver’s 2018 Homeless Count be broken again in 2019?

16. Will 2019 have seen an economic recession?

17. Will Brexit status be significant in determining whether Britain is “better off” at the end of 2019 than at the end of 2018?

18. Will European lumber deliveries to the U.S. decline in 2019?

19. In view of lower lumber prices, will we see movement in the Canada-U.S. softwood lumber dispute?

Year-end Answers

As we approach year-end, you’ll recall 11 questions for 2018 we posed one year ago at Harderblog:

1. Will rhetoric of military strike pass the ‘tipping point’ into war with North Korea?
No.

2. Will the Bitcoin excitement be fading, or prove to be a bubble?
“For built into this situation is the eventual and inevitable fall. Built in also is the circumstance that it cannot come gently or gradually. When it comes, it bears the grim face of disaster. That is because both of the groups of participants in the speculative situation are programmed for sudden efforts at escape. Something, it matters little what – although it will always be much debated – triggers the ultimate reversal. Those who had been riding the upward wave decide now is the time to get out. Those who thought the increase would be forever find their illusion destroyed abruptly, and they, also, respond to the newly revealed reality by selling or trying to sell. Thus the collapse. And thus the rule, supported by the experience of centuries: the speculative episode always ends not with a whimper but with a bang. There will be occasion to see the operation of this rule frequently repeated.”
– John Kenneth Galbraith, A Short History of Financial Euphoria

3. Will the extreme weather patterns evidenced in 2017 be as pronounced in 2018?
According to The Washington Post, the extreme floods, droughts, heat waves and wildfires that broke out this year across North America, Europe and Asia were unprecedented. In Canada, it’s reported no region was spared from extreme weather events; in B.C., 2018 was the worst wildfire season in history, beating the previous record set in 2017. The Weather Channel calls 2018 the year of the California wildfires.

4. Will Trump take steps to call a halt to the special prosecutor’s investigation into Russia’s interference in the 2016 U.S. presidential election?
Who knows for sure, although reports suggest it’s less likely now than appeared to be the case at the beginning of 2018.

5. Has integrity lost some of its lustre as a perceived prerequisite for leadership success?
2018 – a year when we’ve been inured to shock! Many revelations, many developments unfolding still, lead us to believe that integrity remains a prerequisite for leadership success in the long run.

6. As higher lumber prices effectively offset impact of duties, will Canadian major producers’ newly-hedged investments in U.S. production assuage any further concerns companies such as West Fraser and Canfor might have about the ongoing Softwood Lumber Dispute?
It’s a combination of factors, including fibre supply and ongoing international trade/duty related concerns that has motivated major producers to seek out options for gaining better control over the variable factors that go into managing their operations. Contrary to Trump’s America First philosophy, these days the large integrated corporations recognize they have to think globally to be successful.

7. Will Germany repeat as FIFA World Cup champions?
No. Germany did not make it out of the Group Stage, finishing last in Group F which also included Sweden, Mexico, and South Korea. France won the 2018 World Cup, beating Croatia 4-2 in the final.

8. Will the powers that be acknowledge that the re-manufacturing (value-added) segment of the Canadian forest sector is being unfairly penalized in the application of the AD/CVD?
No. On re-manufactured specialty wood products, the cross-border Anti-dumping (AD) and Countervailing duties (CVD) continue to be applied to the selling (border) price instead of the first mill price. Freight and all processing costs are included in the AD/CVD calculation. The resulting, punishing impact of this application on the value-added segment of the Canadian forest sector has been described as “an unintended consequence” of the Softwood Lumber Dispute.

9. Will softwood lumber be incorporated into NAFTA?
Softwood lumber was not incorporated into NAFTA 2.0 which was signed November 30th but has yet to be ratified.

10. In view of the fractured supply chain, will lumber buyers abandon the “just-in-time” model in favour of securing coverage that satisfies longer-term projected needs?
No. On the heels of the epic, bull-trap riddled lumber market collapse from the record high prices reached in June, the “just-in-time” model has probably intensified.

11. Will broccoli, the least-trusted vegetable of 2017 among lumber traders and the general population, retain that notoriety in 2018, at the same time as the world watches broccoli’s favorability surge to number one in Scotland?
A not-so-random survey among lumber traders reveals that broccoli has been gaining in approval ratings among lumber traders and the general population this year. In fact a survey suggests that as of June 2018, broccoli took the lead as America’s favorite vegetable. While many vegetables consumed in the U.S. are imported from Mexico, broccoli is well down the list of imported vegetables.

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Just in time for Christmas!

Pleased to announce our brand new album Waterfront Station – 14 original songs – was released just this week. Available now on iTunes and all major streaming services Apple Music, Spotify, Amazon etc.

Market Milieu

Where, oh where has the market gone? This is the mournful lament intoned on lumber trading floors spooked well in advance of Hallowe’en this year.

Conditions testing the resilience of experienced traders are drawing comparisons with the global financial crisis and US housing market collapse of a decade ago. Today’s geopolitical landscape seems besieged with instability amid crises, including international trade concerns, rising interest rates, financial market volatility, and looming US elections.

Seasoned traders seek to offer reassurance and calm aimed at validating longstanding customer-supplier relationships. While financial analysts scramble to make sense of conditions in the face of seemingly disparate economic data, it seems timely to explore tips for dealing with the biggest lumber market meltdown in history.

Google has advice for handling times like these. One link offering “28 positive things you can do when business is slow” suggests a slow period is just another name for opportunity: “ask for help, take some down time, take a course, take up a hobby, network, develop new offerings, rethink your business model and processes, strengthen important relationships, write, teach, volunteer, exercise, study another industry.” Some guys have even been known to enthusiastically take up coaching – not one – but two girls’ soccer teams.

Another column suggested eating lots of leafy green vegetables to keep your cognitive abilities sharp and on high alert. Even so, we’re told Canada’s legalized cannabis should not be seen as a tool for alleviating anxiety in current market milieu.

Where, oh where has the market gone?
Like a saucer of yesterday’s beer.
I don’t wanna be short,
I don’t wanna be long,
In fact Duthie, I don’t even wanna be here.

– Ernie Harder, singing live at the 1995 British Columbia Wholesale Lumber Association Roast honoring Duthie Welsford, BCWLA Lumberman of the Year (recording below)

Market Ripe for Picking?

Is the lumber market ripe for picking? Who knows. Unfortunately this week’s picking readiness signalled by my backyard apple tree’s bumper crop offers little guidance. Unlike apples dropping from a tree, falling lumber prices can’t be sure of where ground level support intervenes.

Google offered up helpful information that prompted this week’s timing to invite friendly volunteers from the Vancouver Fruit Tree Project Society to come set up their step ladders:

Wait for a couple of apples to fall from the tree. Apple trees naturally drop their apples when they are ripe in order to self-seed and reproduce. Watch for an apple or two to drop from the tree to determine if they are ready to pick.

When your apples are ripe, they should be fairly easy to pick from the tree with a simple upward twist of the apple. Try to avoid picking an apple by pulling the fruit straight down and tugging.

If otherwise healthy fruits begin to fall off the tree, they are probably beginning to get a little too ripe and should probably be harvested as soon as possible.

Now if only Google could offer up unambiguous harvest-time signals for lumber inventory managers.

Nudity and Heat Waves

We’re in for a heat wave. Wildfires threaten our woods, with B.C. Interior areas contemplating evacuation alert notices. It’s a stress-inducing situation that has even lumber traders wondering how to keep cool. Uniting in nudity is suggested as a solution by some. We read of a Newcastle, UK based marketing company who once decided to have a naked Friday, “to boost team spirit and improve employee morale.” Business psychologist David Taylor called it “the most extreme technique” he’s ever used. After a week of counselling and office activities aimed at building courage, most of the co-workers agreed to strip down to work in the buff for a day in an effort to boost production (and probably for a chance to be on TV). The ‘naked event’ is said to have turned around the company’s fortunes.

We’re told that Canada’s first and largest legal, clothing-optional beach, Vancouver’s Wreck Beach, is so crowded this week, there’s a lot of jostling going on to find room to park your fanny pack. It’s reported that at Wreck Beach, named among the world’s top 10 nude beaches, the atmosphere is very stress free. “When you shed your clothes, you shed the stress. It also helps you keep cool”.  With lumber prices continuing to peel off this week, it may have some traders dedicated to serving supplier and customer needs from behind office desks wondering.

Family-friendly Porteau Cove Beach on Howe Sound – July 2018