9 minute read
Rail breakdown ties up lumber industry
ITH hundreds of miles of track congested and freight cars delayed, misrouted or completely lost, rail service in much of the West and Gulf Coast region has all but collapsed.
For lumber companies and other angry shippers, rail semice seems an oxymoron. Gemini Forest Products, Los Alamitos, Ca., recently asked the railroad's tracing service to track nine lost cars, and received erroneous information on seven of them. "We didn't realize six months ago when they were so bad how good they were compared with today," says Gemini's Ted Pollard. "Today is like no service."
The breakdown began several months ago, as the nation's largest railroad, Union Pacific Corp., started to implement a $3.9 billion merger with Southern Pacific Rail Corp. UP cut back on workers and equipment, then discovered that the two railroads' computer systems and dispatching methods were practically incompatible. And, among the combined work force of 52,OOO, workers from one railroad did not take easily to the other railroad's computers and operations. The tracing system was thrown into disarray. Railcars began not being picked up, sitting at random points along their route, ending up in the wrong destination, or disappearing from the system entirely.
Such delays leave fewer empty cars to pick up materials. "It's taking twice the time to get a car, so you're already in a hole once it ships, and then it's taking two to three times as long to ship," says Bill Lovick, Temple-Inland Inc., Diboll, Tx.
Some mills, unable to get railcars to ship out fast-accumulating inventories, are considering cutting back or temporarily curtailing production. "I think we are probably better off than most," says Dave Benson, director of transportation, Hampton Lumber Sales Inc., Portland, Or. "We have 563 of our own private cars, which typically are adequate for our needs. But transit times have doubled. which has basically cut our fleet in half. We need about 50Vo more cars." much better. because BN shares some of UP's most congested tracks in the Gulf Coast and the two rivals disagree on how to unclog them.
Adds Benson: "Our biggest problem is we sell lumber at a given price, and during the delays, prices have fallen-a lot depending on type, grade and species of lumber. There have been reductions of as great as $100 per thousand, so customers are canceling orders or demanding reductions in price to meet the going rate."
Finally, shippers began scrambling for trucks, which are now in equally short supply.
We have 48 traders in here, and they allhave a horror story.
To keep customers happy, after the railroad has lost the original shipment, Temple-Inland has been forced to ship duplicate orders.
Wholesalers are equally vulnerable. "For a company like us that lives and dies on low margins and fast turns, this is devastating," bemoans John Cole, cedar products sales manager, American International Forest Products, Beaverton, Or.
"We have 48 traders in here. and they all have a horror story," he explains. "I've had a ciu on the UP from Winlock, Wa., to Houston sitting for 32 days in Houston, and I can't get it unloaded. We call every day, but there's nothing we can do."
Shipments are so backed up that in late October one transportation manager was telling customers: "If it didn't ship in August, don't come see me about it."
To help relieve the congestion, UP has sent some of its business to competitors such as Burlington Northern Santa Fe Corp., the country's second largest railroad. But lumber companies say BN's service hasn't been
Retailers, too, are upset. After receiving 52 complaints from its members regarding railroad problems, the Lumber Association of California & Nevada confronted UP-SP executives. LACN executive director Jan Hansen met with Wayne Horiuchi, UP's regional government affairs and community relations representative, and had a conference call with Brian McDonald, asst. v.p. of forest products, and Richard Gonzales, manager of public projects and engineering.
UP admitted it had received 2,000 shipper complaints. The main problems included the lack of available cars, level of service, switches not being made on a timely basis, false/inaccurate billing, and cars getting lost (especially in Houston, Tx., and Colton, Ca., where UP and SP meet).
The rail executives promised that it would be hiring 1,500 more employees over the last quarter of 1997 and purchasing 327 morc locomotive engines. Employees are currently working 24 hours a day to get loads out on their 30,000 cars. Things should also run smoother when improvements are completed at the Colton hub, construction is finished at the Roseville, Ca., hub, and UP and SP go on the same computer system early next year.
Forecasts Temple-Inland's Lovick: "They hope to resolve (the situation) by the end ofthe year, but I see it lasting well into first quarter."
Still, more than 2,000 dissatisfied rail customers are urging federal regulators to temporarily allow UP's competitors to use parts of its western rail network.
Vented an exasperated salesman at All-Coast Forest Products, Chino, Ca.: "(The railroads) are just completely screwed up!"
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BMC West has purchased.l,agan Lumber Co., Sparks, Nv., which will eventually replace its Reno, Nv., yard, which does not have rail service...
Stayton Ace Hardware, Stayton, Or., is moving into the larger, 10,500-sq. ft. former Stayton Sentry facility...
Eagle Hardware & Garden i* negotiating to buy 30 acres in Kent, Wa., for a 654,530-sq. ft. DC
Orchard Supply Hardware held a grand opening Oct. 1l-12 in Granada Hills, Ca., and has broken ground for a new store in Santa Ana, Ca. ...
Empire Building Materials, Bozeman, Mt., has opened a new store in Missoula, Mt.; Tim Mellgren, mgr. ...
Lumbermen's of Washington, Inc., has acquired Star Valley Lumber & Truss, Inc., Payson, Az., as its 44th location .,.
Thik & Thin Lumber. which operates as Ziegler Lumber, is replacing its 17,500-sq. ft. Billings, Mt., unit with a 72,0Nsq. ft. facility on 10 acres
HomeBase plans a $100 million securities offbring to accelerate store remodelings and new store openings; the chain has yet to renrodel 17 existing units, will close three unprofitable, undisclosed locations next year, and will open two to four new stores in 1998, and eight to 10 units in both 1999 and 2000
Copeland Lumber Yards has opened a 12,000-sq. ft. store with 2.5-acre yard in Elko, Nv.; Mark Fraker, mgr. ...
Home Depot opens new stores Nov. 20 in Yorba Linda, Ca., and
Dec. 4 in San Mateo,'Ca.; nrill keep its Marina dei Rey and Hollywood, Ca., stores open 24 hours a day, and will reopen a smaller Colma, Ca., store primarily for contractors to alleviate traffic at and around the larger facility that replaced it two years ago
Tualatin Valley Builders Supply is celebrating remodelings in Lake Oswego, St. Helens and Scappoose, Or. ,..
Sears Roebuck &Co. will ooen its first warehouse-sized home decor store, tentatively titled Home Solutions, in Denver, Co., in January; future locations include Seattle, Wa. ]:l
Anniversaries: Faidax htmber & Hardware'Co., Fairfax, Ca., 80th ... Fullmer Lumber Co,.'s Fontana, Ca., branch, lst
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Texas Plywood & Lwnber Co., Grand Prairie, Tx., has acquired the assets of Elof Hansson Wood Products, City of Commerce, Ca., and is operating the facility as E.H. Wood Products
Northwest Timber & Millwork, Boise, Id., has been opened by Graham Taylor and Robert Johnston...
Gateway Forest Products, Wilmington, Ca., changed its name to Harbor Forest Products
Lane Plryood Eugene, Or., is shuaing down indefinitely ..';
Hirt & Wood Lumber Co., Inc., Eugene, Or., has opened a Healdsburg, Ca., sales office, manned by Mike Herbert...
Ilniversal Forest Products purchased American I-Joist, Albuquerque, N.M., for $2@,000 from Wadena Lurnber Products & Technoloi gy, Inc.: the acquisition supplements Universal's own I- jjist production tine to start up in December...
_ Lundgren Dealers Supply, Tacoma" Wa., is closing aft€r 60 yeanl...
Colville Indion Precision Pinc Co., Omak, Wa., has completed a $2.8 million moderniiation, adding optimized trimming and sorung systems ...
Cal Plus Forest Products has moved from lrvine, Ca., to new offices in Tirstin, Ca.
MacBeath Hardwood, San Francisco, Ca., has added a 30" Oliver Strait-GPlaner designed to increase production and quality
Hardware Wholcsalers Inc. has introduced a visual rnerchandising dept.
Precision Pine & Lurnber Co. has closed its mills in Winslow, Eagar and Heber, Az., after the U.S. Supreme Court upheld a ban on logging in national forests in Arizona and New Mexico; the Porter family-owned company had been operating in the area since 1938...
Western , Woad. Products Association has discontinued its fall meetings and will hold its 1998 and 1999 spring meetings in San Francicso, Ca., on a shortened Monday through Wednesday schedule
P e nofin - P e rfo nrutn c e C o ati n g s .Inc., Ukiah, Ca., was ranked as the 86th top coatings-compsny,in the. world by Paint & Coatings Industry magazine
New Web site: National Hardwood Lurnber Association, www.natlhardwood.org ' irl
Housing starts in Sept. (latest figs.) climbed 7.97o to a seasonally adjusted annual rate of 1.500 million,led by aLO.6% increase in the West ... single'family construction rcse 1Vo to 1.17 million units, while multi-family reached 119,00_O 1l1titr .,.permits lgcreased 3%to 1.445 million.
Billionaire Emmerson ls #140
With a fortune of $1.1 billion, A.A. "Red" Emmerson, owner of Sierra Pacific Industries, Redding, Ca., ranks #140 on the latest Forbes Four Hundred list of the richest Americans.
According to Forbes, the self-made billionaire began his career driving a truck, then working the greenchain at Arcata Timber Products, Arcata, Ca.
After the mill closed, he joined Precision Lumber Co., Arcata, and in 1949 co-founded R.H. Emmerson & Son with his father, R.H. "Curly" Emmerson, and Jalmar Berg. Red Emmerson took the company public as Sierra Pacific Industries in 1969.
He took the firm private again in 1974, and after the 1980s recession borrowed $460 million to buy 522,000 acres of timberland, which soon doubled in value. Today, SPI owns over 1.3 million acres of timberland, making the company the nation's third largest lumber producer and Emmerson reportedly the largest single landowner in the U.S., beating out CNN's Ted Turner.
Emmerson, 68, is preparing to pass leadership of the company to his sons, George and Mark.
"I heard of a man who decided to commit suicide by lying on the railroad tracks-he died of starvation."
- Steve Cwaltney
Reliable Wholesale Lumber, Eugene, Or.
Enviros Picket Depot
The Rainforest Action Network planned to join more than 100 other environmental groups late last month in massive protests in front of Home Depot stores selling old growth wood.
In addition to the demonstrations in more than 30 states, the Network also ran a full-page ad criticizing Depot in an Atlanta recreation magazine.
Although the group earlier got Home Depot to agree to stop selling old growth redwood, the chain reportedly still sells other old growth softwoods from British Columbia and old growth tropical hardwoods.
Dstings are often submilted montlu in advance, Always verily dates and locations wilh sponsor before making pbns to attenil,
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Plastic Lumber Trade AssociationNov. 11-13, ASTM meetings, San Diego, Ca.; (330)762-1963.
National Association of Wholesaler-DistributorsNov. 12, technology seminar, live satellite broadcast; (202) 872-0885.
Los Angeles Hardwood Lumberman's ClubNov. 13, meeting, Maggie's Pub, Santa Fe Springs, Ca; (213) 263-9361.
Building Industry ShowNov. 13-14, Long Beach Convention Center, Long Beach, Ca.; (909) 396-9993.
Lumber Assn. of California & NevadaNov. 13-15. annual convention, Doubletree Hotel, Monterey, Ca.; (916) 369-7501.
Western Building Material Assn.Nov. 15-17, annual convention, Doubletree/Lloyd Center, Portland, Or.; (360) 943-3054.
North American Building Material Distribution Assn.Nov. 16- 18, annual convention, Toronto, Canada; (3 12) 321 -6845.
Forest Products SocietyNov. 19-21, forest management seminar, Doubletree Hotel, Spokane, Wa.; (608) 231-1361.
Interbuild England (97Nov. 23-28, building show, National Exhibition Centre, Birmingham, England; (201) 652-7070.
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Building Technology '97Dec. 1-5, building show, Peterburgsky, St. Petersburg, Russia; (301) 515-0012.
Construction & Building Vietnam '97Dec. 3-6, expo, Kasati Centre, Ho Chi Minh City, Vietnam; (,108) 986-8384.
Sacramento Area WholesalersDec. 5, annual luncheon, Arden Hills Country Club, Carmichael, Ca.
National Oak trlooring Manufacturers AssociationDec. 67, annual meeting, Memphis, Tn.; (901) 526-5016.
Lumber Assn. of California & NevadaDec. ll,2nd Growth meeting, Sheraton, Industry Hills, Ca.; (916) 369-7501.
Portland Wholesale Lumber Assn.Dec. 12, holiday party, Doubletree Inn, Jantzen Beach, Portland, Or.; (503) 614-2540.
Los Angeles Hardwood Lumbermants ClubDec. 19, dinner dance, Queen Mary, Long Beach, Ca.; (213) 467-9473.
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TruServJan. 5-7, winter LBM show, Orange County Convention Center, Orlando, Fl.; (773) 695-5000.
Los Angeles Hardwood Lumberman's ClubJan. 8, dinner meeting, Il Ghiotto Ristorante, Fullerton, Ca.; (909) 386-7040.
Spokane Hoo-Hoo ClubJan. 8, past presidents night/initiation, Stockyards Inn, Spokane, Wa.; (509) 624-4551.
Ace Hardware Corp.Jan. 8-9, LBM show, Walt Disney World Dolphin, Lake Buena Vista, Fl.; (630) 990-6600.
International Housewares ShowJan. 11-14, McCormick Place, Chicago, Il.; (847) 292-4200.
Hardware Wholesalers, Inc.Jan. 12-13, winter LBM market, Dolphin, Lake Buena Vista, Fl.; (219) 748-53N.
Mountain States Lumber & Building Material Dealers AssociationJan. 12-16, estimating school, Radisson Hotel, Albuquerque, N.M.; (303) 793-0859.
Building Products International ShowcaseJan. 13-14, trade show, Tacoma Dome, Tacoma, Wa.; (206) 842-8995.
California Forestry AssociationJan. 14-16, annual meeting, Monterey Plaza Hotel, Monterey, Ca.; (916) 444-6592.
Simpson Timber Co.Jan. 15, mill and nursery tours, lunch, Korbel, Ca.; (707) 268-3082.
Ilumboldt Hoo-IIoo ClubJan. 15, crab feed, Eureka Inn, Eureka, Ca.; (707) 268-3082.
