President Bush Signs Housing Bill
The housing rescue bill has become law. President George W. Bush recently signed legislation, finally bringing some closure to the year-long effort to help the struggling housing market.
As some have noted, the bill isn’t perfect, but many hope it will stabilize the market by stemming foreclosures and offering home buying incentives that increase demand.
“This milestone bill contains several provisions to get home buyers back into the marketplace, stop the slide in home prices, provide a lifeline to borrowers facing foreclosure, improve mortgage liquidity and bolster confidence in Fannie Mae and Freddie Mac,” NAHB President Sandy Dunn said today in a statement.  “We commend Congress and the President for taking this action to provide much-needed relief to the American people.”
The bill also creates a stronger regulator for the GSEs. The president’s signature  today establishes a new regulator for Fannie Mae and Freddie Mac: the Federal Housing Finance Agency, the successor to the Office of Federal Housing Enterprise Oversight (OFHEO). However, the leadership at the top will remain the same for the moment, given the approaching November presidential election. James B. Lockhart, OFHEO’s director, will become director of the newly created agency. 
Source: Alison Rice, senior editor, online, at BUILDER magazine. 

Strict Building Codes Credited After California Quake
By GILLIAN FLACCUS
CHINO HILLS, Calif. (AP) — The latest in plywood-reinforced walls, tied-down foundations, strengthened concrete and stronger welds — if an earthquake had to hit somewhere in densely populated Southern California, this relatively new suburb of 80,000 people was about the best place possible.
Chino Hills was just a few miles from the epicenter of Tuesday's magnitude-5.4 quake, yet it withstood the shaking with almost no damage at all, even while other communities farther away saw fallen bricks, cracked walls and windows, warped door frames and broken water mains and gas lines.
One big reason: Chino Hills went up mostly in the 1990s and was built to the stringent earthquake standards that the state wants to see adopted everywhere across California before the Big One strikes.
"I was wandering around out there after the quake and it struck me that there's no building there that's more than 10 years old. They're all built to the most recent codes, and I think that's true of the whole Chino area," said Lucy Jones, a seismologist with the U.S. Geological Survey. "The type of earthquake that used to be a major event just isn't anymore."
Since the 1930s, California has gradually boosted its building standards. Each severe quake has prompted new rules, with the most recent major overhaul coming after the 1994 quake in the Northridge section of Los Angeles that killed 72 people.
After that disaster, the building code was amended to require, among other things, the use of plywood to reinforce sheetrock walls in homes. The new rules also prescribed a different way of welding steel that makes the welds less likely to become brittle and crack.
Tuesday's jolt proved to structural engineers that their work is paying off.
In Chino Hills, 30 miles southeast of Los Angeles, about 70 percent of the homes date to the mid- to late 1990s, and the city doesn't have a single unreinforced mortar building, said Winston Ward, the city's chief building official. Most commercial buildings are no more than four stories tall.
Some, including a newly built Hindu temple, have foundations that rest on a type of rubber-and-metal bumper to lessen swaying, he said.
Experts said the quake could have produced more damage if it had been centered elsewhere.
Only about 20 percent of buildings statewide are constructed to the standards used in Chino Hills. Of the remaining 80 percent, only about half could withstand a moderate or large earthquake, said Chris Poland, chief executive at Degenkolb Engineers in San Francisco. Tuesday's quake was considered moderate.
A state law passed in 1986 mandated that cities catalog all unreinforced mason structures — mostly old brick or stone buildings — and then take steps to retrofit them, a process that includes inserting steel reinforcing bars in exterior walls, and bracing the interior walls with steel, too.
But the law left the retrofitting plans to individual jurisdictions. As a result, about 30 percent of the state's nearly 26,000 brick-and-mortar structures could collapse in a large quake, according to a 2006 report by the California Seismic Safety Commission. Those include buildings with unbraced parapets and unsecured walls and roofs.
Two women were killed in 2003 when an older building collapsed on them during a 6.5-magnitude quake near Paso Robles, along the Central Coast. Following that disaster, cities began posting plaques outside buildings that have not been retrofitted.
In San Bernardino, 40 miles from Chino Hills, there are more than 200 buildings that have not been reinforced because of resistance from business owners, said Jones, the seismologist. Had Tuesday's quake struck there, the damage could have been much worse.
But retrofitting commercial buildings and high-rises can cost 30 percent to 150 percent of the value of the structure, while upgrading a home can be as much as 30 percent, Poland said.
"When there's no earthquakes, it's hard to make anything change," said Thomas Heaton, a professor of geophysics and engineering at Caltech
Experts nonetheless hope that Tuesday's quake will prompt cities to take action before the Big One — a quake of 7.8 or more — arrives.
"In the end, it bears fruit, and we can look around and say, `Hey, this stuff actually works," said Ward, the Chino Hills building chief.
Associated Press Writers Alicia Chang and Daisy Nguyen contributed to this report.

Bi-National Effort Initiated to Establish Accredited Standards for
North American Forest Carbon Accounting

[Washington, DC] – AF&PA has announced that a broad range of forestry stakeholders, including industry and environmental groups in both the U.S. and Canada, have come together to help address climate change.  Together they will develop bi-national consensus standards for determining how carbon absorbed in North American forests will be measured and counted.  “Forestry across North America is a very important component of both Canadian and U.S. economies, and provides an important solution in helping to address climate change,” said Michael Goergen, Executive Vice-President and CEO of the Society of American Foresters (SAF), and Chair of the Forest Carbon Standards Committee that will develop the standards.  “Organizations in both countries have similar goals for reducing greenhouse gases and this bi-national effort recognizes the contributions of forests in helping combat global warming.”
Being developed under procedures accredited by the American National Standards Institute (ANSI) (http://www.ansi.org), the forest carbon measurement and accounting standards will incorporate the technical knowledge of the forestry, carbon trading, and environmental communities into approaches that are scientifically sound, economically feasible, and environmentally positive.  Having consistent, transparent standards will be valuable to the forestry community, climate change program administrators, and the public.
“There is widespread interest in defining forest carbon credit accounting rules in state, provincial, regional, and national climate programs.  The diversity of forest carbon accounting rules and a desire for standardization across jurisdictions and trading regimes have given rise to this important effort,” noted John Pineau, Executive Director, Canadian Institute of Forestry – Institut forestier du Canada (CIF/IFC).  “The new consensus standards will bring together existing and emerging efforts, seek consensus on the resolution of differences, and provide a broadly-supported basis for forest carbon protocols in both countries.”
Organized by the American Forest & Paper Association (AF&PA) (http://www.afandpa.org), Forest Products Association of Canada (FPAC) (http://www.fpac.ca), SAF (http://www.safnet.org), and (CIF/IFC) (http://www.cif-ifc.org), the standards development process will be carried out by a Forest Carbon Standards Committee of approximately 40 individuals representing a broad range of forest landowners, environmental organizations, forest products industry, federal, state, and provincial government agencies, universities, carbon traders, and others.
The ANSI-accredited committee process will involve all interests affected by the proposed standards.  The Committee will also conform to the processes established by the Standards Council of Canada, with the intent of achieving recognized status for the standards in both countries.  The proposed standards must be agreed to by a “consensus body,” representative of the affected parties, followed by a public comment period. 
For more information about this effort, please visit www.forestcarbonstandards.org or contact Neil Sampson, Coordinator for the Secretariat, at 703-924-0773, rneilsampson@cs.com.

An Interview with NAWLA Chairwoman, Susan Fitzsimmons

NAWLA recently had the pleasure of interviewing current NAWLA Chairwoman, Susan Fitzsimmons. Susan gives us some insight into her vision for NAWLA, the industry and a bit about who she is.

Question:
If you had to describe who you are in five words, what would they be?

Susan:

1. High energy
2. Involved
3. An”enthuser”
4. Caring
5. Oh ! and old too !

Question:
How is NAWLA different from other associations?

Susan:
NAWLA, like her members, remains viable, responsive and uniquely “fleet of foot.” NAWLA members continue to invest time and talent to the Organization.

Question:
What goals do you envision accomplishing as NAWLA’s first-ever Chairwoman over the next year?

Susan:
The # 1 goal is surely to fully communicate , launch and nurture the Branding Initiative.
Then we can ensure that the tactics we employ are on target to support and enhance our Strategic Plan.

Question:
How do you see NAWLA changing in the future?  How has NAWLA changed in the past five years?

Susan:
NAWLA’s membership will, more than likely, include a broader slice of the companies who drive the Building Material Industry

Question:
What do you think are the main benefits to being a NAWLA member?

Susan:
The exposure to your peers in the Building Material Industry (in an environment that encourages interaction). The willingness of wholesalers, manufacturers and Service Providers to share current, pertinent analyses and experiences is unique. In NAWLA, networking opportunities abound!

Question:
What do you know for sure about NAWLA that perhaps members and friends do not know that you would like to share?

Susan:
For sure, if a NAWLA member gets involved, at any level with the organization, he/she will always come away having gotten more out of it than he/she put in to it!

Question:
As you are well aware, the lumber industry is in the midst of a slump, how do you see 2008 shaping up? Do you see similar results in the years ahead?

Susan:
If I could really answer that question, I’d be writing the front page article for The Wall Street Journal! The one thing I am sure of, ours is an industry of periodic ups and downs. History proves that we will survive - we may look a little different than we do today – but we will be strong!

Question:
What significant changes, if any, do you see affecting the industry in the next five years?

Susan:
Something(s) is (are) coming down the track that will force change, probably something we can’t describe yet…but we can be sure there will be further consolidation – up and down the chain. Global transactions, additional economic swings, certification and green building movements will all play a role in altering our industry.

Question:
What do you consider to be the industry’s biggest challenge today? How can it be met?

Susan:
Could it be the breadth and depth and the length of time it is taking to get out of this economic slump…how can we meet it ? …the same way we have met these challenges before… with tenacity and creativity.

Question:
Did any of the previous Chairman offer advice to you? If so, what was it?

Susan:
You bet they did . But more important than their advice was their genuine offer to “be there” when and if needed.

Question:
On a personal note, can you tell us something about yourself, and especially how you plan to juggle two demanding jobs during the next year?

Susan:
It’s a darn good thing I am a multi-tasker

Question:
One final question, and perhaps the most important thus far, if you were a tree, what kind of tree would you be and why?

Susan:
NOT A WEEPING WILLOW …that’s for sure!

UPDATE: NAWLA Traders Market®

The Greatest Offering for a NAWLA Traders Market®
November 6-8, 2008 • Chicago, IL
Hyatt Regency Chicago On The Riverwalk

Your NAWLA Traders Market® and NAWLA Education Committees have teamed up to provide you with perhaps THE greatest offering in NAWLA history to date. For only $399 / person (Member), you can’t afford not to join us in Chicago. From an NFL Celebrity to a CNBC Contributor, to off-site tours at the CME Group, and to Canadian and U.S. perspectives on the lumber market we’ve got it all in 2008!

Check out our schedule “Snapshot.”

For further information on NAWLA Speakers, please click here.

NAWLA Educational Program
University of Industrial Distribution (UID)

NAWLA participates with approximately 30 other Wholesaler Associations to offer the University of Industrial Distribution program held at Purdue University in Indiana. The Program is typically offered in March every year.  This past year, the March program, with 600 participants, sold out approximately three months in advance…yes, that’s right, three months!

Due to the overwhelmingly positive response and success of the UID, the AEA (Association Education Alliance) and NAWLA have decided to offer a second UID program. The program will be held December 2-5, 2008. The program is just an awesome offering with 17 instructors from distribution, sales management, personnel productivity, leadership, negotiation, purchasing and more and 25 different classes targeted to wholesalers.

Attached is the brochure and registration information for the December program.  Registration opens August 11.  There are only 250 spots available for the December program, and we expect the program to sell out quickly.  

If you or your employees are interested in attending this program, we urge you to register soon after the August 11 date. Click here for the full brochure and registration information.

Visit the NAWLA website for more information, or contact Stacey Woldt, NAWLA Manager of Meetings and Education at the NAWLA office at 847-870-7470 or email swoldt@nawla.org.

2008 NAWLA Wood Basics Course ● Sept. 8-11 ● Corvallis, OR
The Wood Basics Course is geared to people in your company from two weeks to two years of industry experience. The program is almost full at over 30 participants. Act quickly, sign-up now!

Top 9 ½  Reasons Why Your Company Should Attend

At the NAWLA Wood Basics Course, you can ….

1. Experience the mountains and forests of the Northwest – the heart of the Pacific Northwest lumber industry!

2. Gain essential product knowledge and a get a generous overview of the lumber industry without a final exam!

3. Learn the “correct” pronunciation of “Oregon” (OR-IH– GUN) and “Willamette” – Damn it!

4. Delve into a variety of topics to include the following: Ecology & Silviculture, Dimension Lumber, Grading, Species Identification, Engineered Wood, Marketing, Sales, Transportation and Logistics (Stocking Distributor and Railroad perspectives) and Credits & Claims.

5. Hear 11 , yes 11, different industry experts from Oregon State University (OSU), Department of Forestry and seasoned NAWLA Members.

6. Experience three NAWLA’s hallmark, off-site tours. Run through the forest with us at Starker Forestlands and witness how a harvested tree is transformed into final product at Zip-o-Log Mills (Douglas Fir) and Rosboro (sawmill, plywood and engineered wood).

7. Become a part of the very fabric of our industry

…Network, network, network and establish industry relationships with fellow students and instructors.

8. Wine taste at Willamette Valley Vineyards and be returned safely back to the hotel.

9. Experience the best there is for this type program and for a fantastic value (only $1,895 for members – including hotel stay, most food and beverage, two receptions, all course materials and an unparalleled experience, bar none)!

9½. Meet NAWLA staff in person as an added bonus and have all your questions regarding NAWLA answered.

Fire up your promising new employees in (OR – IH – GUN – no joke is good three times, or two for that matter) this September! For further information on Corvallis, please visit www.visitcorvallis.com. For further information on the 2008 NAWLA Wood Basics Course, please visit www.nawla.org or contact NAWLA at (800) 527-8258.

Seize the moment. ACT NOW!

Welcome to the following new NAWLA members for the month of August:

Wolf River Lumber
Peak Auctioneering

Manufacturer
Doug Knowles        
Wolf River Lumber
P.O. Box 224
New London WI  54961
Phone: 920-982-2542
Fax: 920-982-4591
www.wolfriverlumber.com
Verifiers:
Bruce Kulzer, Hood Distribution
Tony Fleishman, Tom's Quality Lumber
Bob Bootay, Babcock Lumber

Wolf River Lumber is a resaw, trim and kiln dry manufacturer of hardwood lumber.

Service Affiliate
Richard Peak
Peak Auctioneering
P.O. Box 014141
Kansas City, MO  64101
Phone: 816-474-1982
Fax: 816-474-4405
Website: www.peakauction.com
Verifiers:
Jim Epperson, Epperson Lumber
Jack Aden, Rawles Aden Lumber

Capital Lumber Company – Expands in Texas
Phoenix, AZ – Capital Lumber is expanding its distribution services in Texas by developing a site in the Houston area.  Vic Viorde, formerly of Weyerhaeuser and MacMillan Bloedel, has been hired as Division Manager.  Vic has recruited Chris Abel as Sales Manager, Pam Swenson as Product & Sales Support, and Juan Lara, Mario Samuels, Scott Ringer, Mike Kelly, Robert Marsh and Telisa Marsh as Account Managers, all of whom he has worked with for over 14 years.  Vic expects to add additional resources over the next few weeks.

The team is currently operating out of an office in Houston and will relocate to a distribution site in northwest Houston located at 9835 Genard Road on August 1st.  The rail served site includes a 40,000 square foot fully enclosed warehouse on 4 acres with room to expand.

Customers should expect expanded products and services from the new facility over the next few months, which will compliment existing business units in the state.  The product line will feature a nationally known EWP manufacturer, Terminal cedar products, California Redwood Co. products, Nichiha fiber cement siding and Trex decking.

Capital Lumber Company is an independently owned distributor of specialty building materials serving the Western United States since 1948.  Facilities include 13 regional distribution centers and four subsidiary business operations.  Capital’s 300 employees include over 80 experienced, knowledgeable sales and marketing professionals calling on over 2,500 accounts comprised of retail and pro-sales lumber dealers, home centers and the outdoor living industry.

Capital’s facility in Salt Lake City, UT is now a full-line distributor of CertainTeed’s WeatherBoards and ColorMax fiber cement siding products.  Inquiries for this new line should be directed to Capital’s sales force at 801-484-2007.

Capital’s Salt Lake City Distribution Facility serves Utah through a seventeen acre, asphalt covered site with a 48,000 square foot warehouse.  Over three and a half million BM of Redwood, Cedar, Doug Fir, White Fir, Trex and other specialty items are inventoried to accommodate customers’ immediate needs.

Norman G. Jensen, Inc. International Trade Update

NGJ has published an International Trade Update (ITU) entitled CBP Issues ABI System Requirements for Softwood Lumber Data Elements Required by "Farm Bill."

The ITU can be viewed at http://www.ngjensen.com/news/itu/2008-07-31-1.pdf

Russin Lumber Obtains FSC Certification From Scientific Certification Systems. SFI Certification Expected Soon.

Russin Lumber Corp., Montgomery, NY is proud to announce it has achieved Forest Stewardship Council (FSC) Chain-of-Custody certification. With the surging demand for green building products, gaining FSC Chain-of-Custody certification illustrates the Russin Lumber commitment to support our customers, the environment, and sustainable building practices. “Russin Lumber’s mission is to solve customer problems. With green building becoming one of 2008’s hot topics, our certifications and expertise will help our customers to navigate the certified lumber maze” said Jordan Russin, Vice President of Strategic Planning for the company.
 
Both the Russin Lumber distribution center and factory finishing facility have been independently certified by Scientific Certification Systems (SCS) forest conservation program in accordance with the rules of the Forest Stewardship Council (FSC). Russin will now distribute FSC certified products including lumber, building materials and factory finished lumber.

Cook County Lumber receives FSC certification.

Cook County Lumber has received Forest Stewardship Council (FSC) chain-of-custody certification to provide FSC lumber materials to dealers for building construction that qualifies for LEED accreditation, the Chicago-based company announced.
The privately held company said it recognized the growing demand of FSC materials in the marketplace and a need to support customers who have taken the necessary steps to obtain FSC certification. The chain-of-custody certificate became effective earlier this month.
“We have relationships with top mills for FSC lumber materials, thereby maintaining the integrity of the chain-of-custody from the manufacturer to the dealer,” the company said in a statement.
The FSC is an independent, nonprofit organization with a stated goal to promote the responsible management of the world’s forests. The FSC accredits businesses and promotes voluntary, third party certification.
According to the U.S. Green Building Council Web site, LEED accreditation is given to professionals who demonstrate a thorough understanding of green building practices and principles and familiarity with LEED requirements, resources and processes.

MacKenzie Sawmill, Ltd., announces the addition of Nathan Tellis to their Sales and Marketing Team.

Over the past six years, Nathan has been involved in logistics and management of secondary manufacturing and custom cutting programs of hemlock for both domestic and export markets.

MacKenzie Sawmill Ltd. is an independently owned large log (20” plus) sawmill that continuously operates on two shifts.  As one of the few independent sawmills remaining, this mill is an important supplier of D. Fir, Hemlock, and WR Cedar appearance timbers to the stocking distributors and raw materials to the remanufacturing industry.

Transportation reps. discuss U.S.'s future

The state of our nation's transportation infrastructure was the topic of conversation Thursday midday in Minneapolis.
A day before the one year anniversary of the 35W bridge collapse, representatives from the transportation industry and the federal government gathered to talk about what needs to be done to improve roads and bridges across the country.
The group says the federal government needs to invest more than double the $87 billion it spends per year on road and bridge maintenance and repairs. The group also claims that more tragedies are inevitable if more resources aren't devoted to America's crumbling transportation infrastructure.
This visit is part of a multi-million dollar campaign by the U.S. Chamber of Commerce focused on transportation, energy and telecommunications needs.
Source: KSAX TV News

Exporters need more shipping containers
At ports, a shortage of cargo containers seems about as unlikely as cardboard boxes suddenly becoming obsolete.
The weak dollar has made U.S. goods cheaper overseas and has created a new wrinkle for the shipping industry: Containers are increasingly hard to come by.
“The import volume has slowed down, so fewer boxes are coming in, and exporters are seeing more demand,” said Kevin Mack, a vice president at Newark, N.J.-based Columbia Containers. “I’ve been in the business for 25 years, and this is the first time I can remember this happening.”
While most containers come into ports on the East Coast, the Midwest can’t find enough of them to handle the rising exports of grains, soybeans and corn bound for overseas markets.
“It’s all logistics,” said Sherif Gendi, who arranges U.S. grain exports for the trading company Marubeni America in New York City. “The containers,” he said, “aren’t getting to where they’re needed.”
That’s because moving empty containers around is an expense no one wants to absorb.
When a company adds fuel surcharges to the expense of moving an empty container, it becomes a “serious cost,” said Joe Alagna, an executive with China Shipping. On average, the cost of taking an empty container for a one-way ride to Chicago could be more than $1,000.
“The prevailing theory is that by the time you pay to move the empty to the Midwest, it’s a loss,” he said.
The supply problem in the Midwest has left giant food processors, trading companies and shippers scrambling to fulfill delivery schedules. And once they succeed in finding containers, exporters still have to secure space on outgoing ships, which also is getting more difficult as export levels climb.
“Virtually every space on every ship is full,” said Peter Friedmann, executive director of the Agriculture Transportation Coalition in Washington. “It’s a real crisis, because only so much disruption can occur before customers start looking somewhere else.”
Philip Damas, head of container research at Drewry Shipping Consultants in London, said the situation is forcing Midwest exporters to plan as much as six weeks out to ensure they have both the containers and the ship capacity necessary to transport their products.
In some cases, exporters are taking drastic steps, warehousing their goods until they can get containers, reserving more containers than they need and moving their goods hundreds of miles by rail to ports with available containers.
“It’s getting very expensive, and it’s slowing down the export process,” Damas said.
At the same time, containers aren’t coming into the United States at the same volume they were a few years ago. The weak U.S. economy has led to a slowdown of imports, requiring fewer containers.
The Midwest’s hunt for containers has led plenty of exporters to send goods — such as corn and soybeans — in rail cars, where they’re then moved into containers.
Ultimately, some industry experts think the search for containers could lead shippers to the container depots, where boxes piled up as the nation was flooded with more imports than exports.
Source: SUSAN TODD - Newhouse News Service

Truck tonnage increases in June, but trade group economist suggests recovery might be far off
The American Trucking Associations said total goods shipped by truck in the U.S. rose for the second consecutive month in June, but the trade group's chief economist suggested the nation's overall economy might not yet be on the road to recovery.
Truckers are considered gauges of the nation's economic health because they often recover ahead of the broader economy, as they transport goods to stock retailers' shelves in preparation for a rebound in consumer spending. Almost 70 percent of manufactured and retail goods in the U.S. are carried by truck, according to the ATA.
The ATA said its seasonally adjusted tonnage index, which measures the weight of freight hauled by U.S. truckers based on membership surveys, rose 1.3 percent in June. The index also hit its highest mark since February. It rose 0.5 percent in May.
The trade group's Chief Economist Bob Costello said despite the uptick, the fate of the overall economy still remains unknown.
"It seems that truck tonnage is once again leading the U.S. economy," Costello said in a statement. "Unfortunately, truck tonnage could slow later this year as the overall economy is expected to be quite weak in the fourth quarter and the first quarter of next year."
Costello noted that during the economic downturn in 2001, trucking demand recovered before the economy fell into a recession.
A key driver in the last two months may have more to do with capacity cutbacks across the sector. High fuel prices have driven many carriers to cut their fleet sizes or sell trucks to foreign buyers in an effort to bring U.S. supply and demand back into balance.
Costello predicts that additional fleet reductions will probably continue in the near future.
The Arlington, Va.-based trucking group's members include FedEx Corp., United Parcel Service Inc., Con-way Inc. and Knight Transportation Inc.
Most trucking stocks advanced in morning trading Wednesday as the broader market continued a two-day rally.

Source: The Associated Press
and the NAW Smartbrief

Exports set record in S.C.
May was the busiest export month in the S.C. State Ports Authority’s history, but import growth is not keeping pace in the weakened U.S. economy.
Even so, companies using the Charleston port are not having as many problems finding empty shipping containers for their exports because the port typically imports more goods than it sends out.
The problems for exporters arise when it comes to finding space for their containers on cargo ships leaving Charleston’s port, said Byron Miller, spokesman for the ports authority.
“In many cases, even if you have a container, you may not get it on a vessel for three to four weeks,” Miller said.
That’s because many shipping companies have rerouted their vessels to more profitable locations in Asia and Europe, he said.
In May, the ports authority recorded 65,520 loaded export TEUs, which stands for twenty foot equivalent units, the standard measure for containers. That was a 16 percent growth over May 2007, when 56,601 filled containers passed through the port.
The port imported 66,325 containers in May.
Typically, more boxes enter the S.C. ports than leave. But that trend was broken in February and April, Miller said.
Many containers arriving through the Charleston port are unloaded near the coast. That means exporters further inland might have problems locating empty containers, Miller said.
Ports across the country are experiencing similar issues as U.S. exports grow. The weak dollar has made American-made products cheaper overseas. Plus, the poor economy means Americans are buying fewer products, which means fewer imported goods are coming into the country.
“It’s the old supply and demand thing,” Miller said. “It’s how business tends to be.”
Source: The State.com, South Carolina’s Home Page

Mid-year assessment of wholesale distribution sectors
Grocery and foodservices, agricultural products, and oil and gas products distributors accounted for more than half of the distribution industry's growth in 2007, a year plagued by rising commodity prices. Overall, wholesale distribution revenue grew 8.6% to $4.2 trillion in 2007.
Source: TED magazine offers a mid-year look at distribution markets in this article adapted from Pembroke Consulting President and NAW Institute for Distribution Excellence Fellow Adam J. Fein, Ph.D.'s new book. TED Magazine (7/1)
For more: Purchase Adam J. Fein's 2008 Wholesale Distribution Economic Reports.

On-demand data integration ties HD Supply to customers
HD Supply Facilities Maintenance, a unit of Atlanta-based HD Supply Inc., is one of the largest wholesale providers of maintenance and repair products in the country.
In the distribution business, the network is everything. Thousands of transactions cross HD Supply Facilities Maintenance's portals each day, many in electronic format.
In 2007, HD Supply, which was owned by The Home Depot Inc., learned that it was being sold to private investors. HD Supply Facilities Maintenance had six short months to get off Home Depot's legacy systems. At stake were 225 suppliers and 80 national customers.
Some of HD Supply Facilities Maintenance's national business accounts like to order using their own procurement applications rather than through the company website, said Mark Linder, director of e-business for HD Supply Facilities Maintenance . "They need real-time connectivity to get the full benefit of those applications. They want to submit purchase orders and get invoices back electronically. They also want to have real-time price and availability checks," Linder said.
Many of HD Supply Facilities Maintenance's vendors used electronic data interchange (EDI) infrastructure, the record of choice for electronic business transactions, said Deron Young, senior manager of application development, HD Supply Facilities Maintenance.
Others wanted to do EDI but were not there yet, still requiring expensive manual labor from HD Supply Facilities Maintenance to process the transactions. Then there were the new customers the newly spun-off company hoped to add, the additional business from existing customers to consider and the prospect of growing through acquisitions.
No penalty for growth
Some heavy-duty due diligence later, HD Supply Facilities Maintenance opted for a known quantity, on-demand data integrator Hubspan Inc., which it had used to connect to its business alliance partners.
But it was not a matter of the devil you know.
Unlike the other vendors grilled, Hubspan said, "'Hey, let us help you contact all these vendors, and test the systems to meet the deadline you're under,'" Young recounted. "That really carried a lot of weight."
Moreover, Hubspan did not charge by the kilocharacter for transactions, a big consideration for a company starting from scratch with its own platform and hoping to grow. There is no easy way to forecast how big the transaction stream is going to be, Young said.
Linder summed up: "What it boiled down to was, they didn't penalize us for growth. On the business side, that was probably the biggest factor in our decision."
Like on-demand CRM, only hard
"Hubspan mediates the world of disparities," said Robert Pease, vice president of marketing for the Seattle-based vendor.
No matter what the system is on the sending or receiving side, Hubspan can mediate the flow of information, Pease touted -- and with an on-demand twist. Certainly data integration is not a new challenge for companies. But new technology and delivery models mean that companies can "elevate data integration to the business process level," he said, rather than settling for a one-off connection with customers and suppliers.
For example, when Boeing Co. sends a purchase order, it not only wants a receipt showing that its order was received but it also needs certain information contained in that order returned. For recipients who lack the systems to send the information back to Boeing, Hubspan can extract the data and re-associate it with the receipt, so the record is complete.
"It's the difference between letting the technology drive your business rather your own processes," Pease said.

"They want to submit purchase orders and get invoices back electronically. They want to do real-time price and availability checks." Mark Linder director of e-business, HD Supply Inc.

On-demand data integration also differs from most business intelligence tools, which give businesses a backward view into the business record -- a view of what happened, Pease says. For many businesses, what did not happen is often the more critical piece of information for a business, he said, citing statistics showing that 25% of business orders fail based on bad data. Someone in the organization may know that data was bad, he said, but communicating that information up the command chain too often falls through the cracks.
Consultant Jeff Kaplan, managing director at THINKstrategies Inc. in Wellesley, Mass., has followed the shift to on-demand computing keenly. He said vendors such as Hubspan, Informatica Corp. and newcomers Cast Iron Systems Inc. and Boomi Inc. are capitalizing on the same value proposition that has made Software as a Service vendors like Salesforce.com Inc. so compelling.
"Businesses look at the time, the skills, the resources and money it would take to do this stuff, as well as operational requirements and then ask themselves if they need to build their own solution," Kaplan said. For behind-the-firewall or on-premise applications, the answer may well be, of course. But increasingly, a lot of business gets done outside the four walls of the company and, more important, outside the firewall.
"Hubspan has not only figured out how to integrate applications on premise but also across multiple entities, so enterprises can transfer data across their multiple divisions or with partners in a reliable way," Kaplan said. "It gives a whole new meaning to the old word, extranet."
Vendor as business partner
Hubspan's Pease agreed that on-demand data integration, like on-demand customer relationship management (CRM) products, is a disruptive technology. Like CRM, the software is expensive.
The difference, Pease said, is data integration is hard. And it's not a "do once and that's it" event.
"A lot of our job is change management, because all it takes is a database manager to change a data map or upgrade to the latest version of SAP to break a connection," Pease said.
Businesses may decide they need to invest in their own data integration platform, but in that case, Pease ventured, they've also just decided that data integration is a core competency.
For HD Supply Facilities Maintenance, going with Hubspan not only got the job done under a tight deadline, but it also freed up IT staff to work on stuff other than herding data, Young said. He said Hubspan not only keeps the information gateways open with suppliers and customers, but it also acts as a filter, cleaning up data and putting it in the proper format up front.
As more customers invest in spending management applications to drive down the total cost of procurement and make the move to EDI, an on-demand data integration tool that can get that customers on board electronically in 30 days or less is a big selling point.
Another plus, Linder said: Every A-list Hubspan customer is that much closer to becoming an HD Supply Facilities Maintenance customer because everyone is on the same network. The network is everything.
Source: Linda Tucci, Senior News Writer
29 Jul 2008 | SearchCIO.com
And the NAW Smartbrief
Click here to review this article: http://searchcio.techtarget.com/news/article/0,289142,sid182_gci1323107,00.html

To Go Green, or Not To Go Green

Ideal: Built by Ideal Homes in Norman, Okla., this $165,000, 1,650-square-foot home is 44 percent more efficient than code.
Builders in Colorado have seen and felt the excitement of green building before, back in the late 1970s and early 1980s when incorporating passive solar into homes was spurred by federal tax credits.
Though that wave of home building environmentalism petered out as the tax rebates dried up in 1985, another and more nationally vibrant green movement is alive and kicking today. Even builders not based in California, Colorado, Austin, Texas, and other green building hot spots are finding their customers asking about energy efficiency or homes that are built more sustainably.

But something is different this time around, says Tom Sattler, owner and president of Sattler Homes, based in Greenwood Village, Colo. Sattler is a custom builder who has designed a line of energy-efficient production homes. He soon will be building all his homes to at least that standard, if not to Colorado’s Built Green standard, which requires that homes be at least 50 percent more efficient than code.
The difference in the environmental movements then versus now, Sattler thinks, is momentum.
“It is getting very, very strong,” Sattler says. Green building is projected to grow as a share of the overall residential construction market from just 2 percent in 2005 to between 12 percent and 20 percent in 2012, according to research presented at the National Green Building Conference in New Orleans by Harvey Bernstein, vice president of Industry Analytics, Alliances and Strategic Initiatives for McGraw Hill. In dollar terms, that’s an increase in business from $7 billion in 2005 to between $40 billion and $70 billion in 2012.
But the surge in interest is coming not only from environmentalists, but also from regular families trying to save money on their energy bills.
“With our buyers, it all boils down to dollars and cents,” says Vernon McKown, president of sales for Ideal Homes, a Norman, Okla.–based builder of energy-efficient entry-level homes, and one of Builder’s America’s Best Builders in 2007. “It’s got to save them money.”

A GREEN PERCEPTION

That’s because Ideal, which faces price cutting in its market from competitors such as D.R. Horton, passes all of the costs—roughly $3,000 more than it would cost to build conventionally—on to the consumer with a promise of low monthly energy bills.
And while there is no hard statistical proof yet that consumers will pay more for green, Ideal ranks as the No. 2 builder in Oklahoma City with a 5.5 percent market share, outselling its competitors using energy efficiency as a key differentiator.
“That’s a significant amount of money, $3,000,” says McKown, for homes that range from $109,000 to the low $300,000s. “But $24 a month, in our typical house, is the guaranteed utility cost. Our buyers’ homes are running cheaper than our competitors by $60 to $100 per month.”
Every year, Ideal examines how much extra it spends building homes to be energy efficient and determines if that cost to compete is still worth it, McKown says. It is as long as consumers are willing to pay. That’s the bottom line; currently, consumers are driving green building, and with energy prices the way they are, it’s a push that is unlikely to lose momentum.
“Builders will change based on what homeowners say,” says Carlos Martin, the NAHB’s assistant staff vice president for construction codes and standards. “Right now, the business case is, there’s potential. The studies aren’t there yet to know if they are selling more because they are green builders. But there is a perception, and a lot of our builders see that perception.”
Sattler finds most of his customers ask whether his homes are green or energy efficient, they listen to the sales pitch, then mentally check a box in their head, and that’s as much as they think about it, he says. But Sattler’s customers are different from McKown’s; they are people who are far more likely to care that radiant heat is more comfortable than whether it is more efficient.

WHAT CONSUMERS WANT

Some builders, Sattler included, are frustrated by green standards that confuse the idea of what green is, as well as by builders who do a few things, but then market their companies as green.
Other builders are frustrated by logistics; land they bought may not offer the best sites for building green houses, says the NAHB’s Martin.
And builders in general do not like being dictated to, which Sattler feels is happening in the case of green building.
Where is the pressure coming from? “The movement, first and foremost, possibly followed by energy costs. When I say the movement, I mean the ‘Save the Polar Bears’ people, all of that,” says Sattler of those who are pushing green building, adding that pressure from environmentalists eventually leads to government mandates.
“If we do take the responsibility [and build green], maybe we can fend some of that off. You’ve got to look at the science and study it,” says Sattler. “You’ve got to figure out what the consumer wants, and you’ve got to be willing to change and react.”
The mandates are coming, some argue, because, according to the U.S. Energy Information Administration, residential and commercial buildings account for 48 percent of all energy consumption in the U.S., and green home building has the potential to lower energy expenditures by 50 percent, according to Bernstein.

Not all mandates are necessarily bad, say some builders. One that would be easy to accommodate, says McKown, would be on a window standard.
“If we know that high-performance windows can reduce the cooling load on a house by 50 percent, and if we can reduce the cooling load by 50 percent and your air conditioner is 25 percent of the total electric consumption of the house, then why wouldn’t we do that? That ought to be required. And that’s just the windows,” McKown says.
But whether builders want to go green or not, it seems they will have to in order to remain competitive. Even Sattler, who still argues that most consumers are not willing to pay for green features, thinks home building is on the cusp of major advances.
“In 25 years, we’re going to look back at this period much like we looked back at the race to the moon, at the technology that was created because of that effort, and we’ll say, ‘Look at what we did to create more fuel-efficient cars. Look at what we did to create zero-energy homes,’” Sattler says. “There will be positives that come out of it. But sometimes it’s frustrating to those of us who don’t want to see it mandated or shoved down our throats when the consumer doesn’t want it. But at the end of the day, there will be clear benefits and advantages.”
Source: by Ethan Butterfield
The Business Case for Building Green
Hanley Wood
Visit BuilderOnline.com

Partnering for Profits: Benefit from Differences

One of the unintended partnering pitfalls is homogenization. This is where partners in a collaboration attempt to overcome differences in culture, operations, and strategy by "beating" one another into sameness. Initially, the reason for the collaboration is to overcome core weaknesses and share competencies. However, in the name of alliance management; compromise and cooperation, there is the natural attempt of the larger partner to "urge" the smaller partner to do business "their" way. This is a mistake!

While alliance management is a bit more difficult when the partners' culture, operations, and strategy are different--the power is in that difference. Look for ways to leverage the value of partner differences rather than to succumb to the natural tendency to attempt to get everybody on "the same page."

At www.rigsbee.com/selectvideo.htm, you'll find a 79 minute video presentation: "Vendor Summit" that should prove to be valuable in future training sessions your vendors and procurement department.

Ed Rigsbee, CSP
Rigsbee Research Consulting Group
Copyright © 2008

Ed Rigsbee has been fumbling, bumbling, and stumbling his way through the organizational mazes of for-profits and non-profits for over four decades. In addition to serving as the president of Rigsbee Research Consulting Group, Ed also serves as the executive director of a public charity (501 c 3). Ed has authored three books and over 1,500 articles helping organizations to take full advantage of their potential. Contact Edat www.Rigsbee.com and visit www.youtube.com/partneringalliances to view Ed’s videos.

Avoiding Investment Myopia

By Dr. Albert D. Bates
President, Profit Planning Group

For most of the last decade, distributors have taken a strong cash-flow orientation to their operations. The rallying cry has been “Profit is fine, but cash is king.”  There is now strong evidence that the king is in exile.

A proponent of the cash flow perspective would argue that both inventory and accounts receivable are cash traps that must be drained. However, reducing these onerous investment factors has the potential to lower sales volume. This article, based on Profit Myths in Wholesale Distribution: The Truth About Sales, Margins, Inventory, and Expenses (available from the NAW Institute for Distribution Excellence at www.naw.org/profitmyths), examines the implications of lowering the investment in inventory and accounts receivable. It will do so from two different perspectives:

• The Investment Versus Sales Trade-off—An examination of how investment reduction programs have the potential to either increase or decrease profitability.
• Having Cake and Eating It Too—A review of the opportunities for investment reduction that can be undertaken without risking sales decline.

The Investment Versus Sales Trade-off

To understand how investment and sales reductions work their way through the business it is necessary to have a precise understanding of the financial structure of firms in the industry. Exhibit 1 provides financial results for a representative distribution firm.

This typical firm generates $40,000,000 in sales volume, operates on a gross margin of 20.0% of sales and produces a pre-tax profit of $1,200,000 or 3.0% of sales. The firm is also assumed to have variable expenses (commission and the like) of 4.0% of sales.

The key investment issue is that the firm requires $12,000,000 in total assets in order to generate this level of sales and profit. Of this amount, $5,500,000 is in inventory and $5,100,000 is in accounts receivable. These results are shown in the first column of the exhibit.

The second and third columns examine the impact of an investment reduction, but do so under very different circumstances. The second column assumes that both inventory and accounts receivable can be reduced without impacting sales volume. The final column looks at the consequences of an investment reduction that result in a modest sales decline.

profits increase by $212,000. At the same time, the reduction in investment is also significant. When the investment reduction and the profit improvement are combined, ROA increases sharply, from 10.0% to 12.9%.

The problem in distribution is that investment reductions are almost always associated with reductions in sales activity. This is due to out-of-stock conditions on inventory and the reluctance to provide credit to marginal customers on accounts receivable.

In the final column of the exhibit, it is assumed that sales decline by 10.0%. This is not meant to imply that a 10.0% investment reduction will automatically result in a 10.0% sales decline. It is merely a pro forma set of results. The actual sales decline may be more or less than 10.0%.

In any event, the sales decline destroys the financial structure of the firm. With a sales decline, it is impossible to shed fixed expenses. The result is that profit declines from $1,200,000 to $772,000. Even though the asset investment is reduced, ROA actually falls from 10.0% to 7.1%. In both of the “what if” columns the investment in inventory and accounts receivable has been reduced by 10%. It is also assumed that the cost of carrying inventory and accounts receivable is around 20%. That is, for every dollar of investment reduction, profits would increase by 20 cents due to less interest, a reduction in insurance on inventory, fewer bad debts and the like.

A 20% factor for inventory is about what most inventory consultants suggest should be used for inventory. For accounts receivable, a 20% factor overstates the carrying costs by a large extent since the only carrying cost items are interest and bad debts. Consequently, the cost reduction factors in the exhibit are slightly over-stating the profit impact of an investment reduction.

As can be seen, if there is no sales decline, the cost reduction (line item “Reduction in Carrying Costs” in the exhibit) is significant. Costs decline and Simply put, sales are much more important than investment levels in determining the financial success of the firm for BSA members.

This profit impact of “sales not made” is not well understood as traditional information systems simply can’t provide pro forma income statements that add back sales that were lost. Since the profit impact of investment reductions are highly visible and those of lost sales are not, there is a natural tendency to move toward an investment reduction approach.

Having Cake and Eating it Too

Few distributors have as much cash as they desire. The instinctive reaction is to lower investment levels. However, such actions are likely to lower profits, which make the investment challenge that much harder. There are two solutions to this challenge—driveprofits higher or eliminate marginal investments.

Driving Profits Higher—For most firms it is absolutely essential to place more emphasis on increasing profits and less on lowering investment levels. This means avoiding investment myopia which results in blanket reductions in either inventory or accounts receivable.

If the firm can generate an adequate level of sales volume and a realistic gross margin on those sales, profits tend to increase almost exponentially. The key to this strategy is to have the right product in stock when customers want it and to be willing to finance those purchases. There is no other realistic approach to profit improvement.

Eliminating Marginal Investments—The key to investment reduction success is focusing on where the investment is doing little to help the firm generate sales and profits. In inventory planning this is easy; for accounts receivable planning it is much more difficult.

In inventory the problem investments are easy to identify. They are items that have not sold during the last year. Monitoring systems must be in place to highlight these problems and management must deal with them on an on-going basis. Dead inventory never returns to life.

For accounts receivable the issue is more complex as it is not just the slow-paying accounts, but those which are slow paying and also generate low levels of sales and gross margin. This requires a system to evaluate the overall profitability of accounts and commensurate ability to make pricing adjustments where the return does not justify the investment.

Dr. Albert D. Bates is founder and president of Profit Planning Group, a distribution research firm headquartered in Boulder, Colorado.

This article is adapted from the new book Profit Myths in Wholesale Distribution:
The Truth About Sales, Margins, Inventory, and Expenses. Copies may be purchased from the NAW Institute for Distribution Excellence at (www.naw.org/profitmyths)
or by calling 202.872.0885.