LUMBERYARDS

A dealer well-versed in the law

Meet the incoming chair of the National Lumber and Building Material Dealers Association

BY Ken Clark

Bob Sanford, the incoming chairman of the National Lumber and Building Material Dealers Association, remembers very clearly the thunder bolt that sparked him to seek out a legal education. It came in the form of a lawsuit directed at his family business – Sanford & Hawley of Unionville, Conn.

The suit was brought against the lumberyard back in the mid 1980s for selling second-generation fire-treated lumber that turned brittle due to a defect in its treatment – through no fault of Sanford & Hawley. The lumber was used in five prison buildings, which all had to be rebuilt. And the dealer that has served Connecticut since 1884 was hit with a $60 million lawsuit.

“It was staggering,” Sanford said. “I remember reading the lawsuit that said ‘the defendant Sanford & Hawley knew or should have known …,’ and I thought ‘How would we ever have known the treatment was defective.’”

Ultimately, with representation from Lumbermen’s Mutual and after four years of litigation, the case was settled for far less than the $60 million sum. A relative success story, but it was still an expensive and frustrating experience for the company.

“That case was one of the solid reasons I decided I was going to go to law school and learn more about the law and how all this nonsense worked,” said Sanford, who received his law degree from nearby University of Connecticut. The lawsuit was also one of the reasons Sanford is passionate about tort reform and the Innocent Sellers Act, one of the NLBMDA’s marquee legislative efforts.

As the incoming chairman of the NLBMDA and an experienced participant of the legislative committee of the Lumber Dealers Association of Connecticut (and the 2008 LDAC Lumber Person of the Year) Sanford feels strongly about a number of issues affecting the industry.

There are banking regulations, for instance.

“I think some of the recent roll back and easing of regulations has been beneficial, particularly as it relates to the Dodd-Frank Act,” he told HBSDealer. He explained that an unintended consequence of the act has been to accelerate the mergers of large banks, while at the same time placing excessive burdens on smaller, community-focused banks – the ones that have stood by the construction supply industry during tough times and “understand local builders,” he said. “It would be unfortunate to find ourselves in a place where all we have are big banks.”

There’s also the matter of international trade, an issue in which Sanford stands with the NLBMDA on the side of free trade. The association has consistently called for more focus on negotiations with Canada to reopen the pipeline of critical Canadian softwood.

“I’m certainly a big proponent of free trade,” he said. “Tariffs have been extremely detrimental. Price stability is critical for housing. Unstable prices are not good for builders, not good for lumberyards, not good for anybody, and as the costs have escalated in the last 18 months, I’m sure it has deterred some building.”

Sanford came to his role as incoming chairman of the NLMBDA in the usual fashion – networking with current members. Past Chairman J.D. Saunders of Economy Lumber in Campbell, Calif., is credited as the successful recruiter.

Sanford will officially take his title from current Chair Rick Lierz, of Boise, Idaho-based Franklin Building Supply at the upcoming ProDealer Industry Summit. (The Summit is hosted jointly by the NLBMDA and HBSDealer.)

Another event that Sanford champions is the annual Legislative Conference that brings dealers from around the country to learn, network and meet their representatives in Washington, D.C.

“I’ve been going to that conference since the 1990s and I’ve only missed one year,” he said. “It’s definitely an event that’s worth the time and effort and energy. Sometimes you feel like you’re hitting your head against the wall, particularly with legislators who don’t necessarily see business interests all that clearly. But it’s still important for them to hear our message and our thoughts.”

Like all NLBMDA chairs before him, Sanford is a lumber dealer first and foremost. He operates the business with the help of his brothers Frank and Ted, who handle sales and operations, respectively. Bob’s children Robert and Abigail have also shown interest in the business, giving the company confidence in its succession planning.

“I tell my children it’s absolutely a fantastic opportunity for you, but you need to have a passion for it and if you don’t, then run the other way,” he said.

The company’s flagship store in Unionville  – “The Red Store on the Corner” – has more charm than most New England art or antique galleries. The Roaring Brook actually runs through the heart of the complex which includes cedar-clad barn building with a showroom on the second floor and drive-through lumberyard facility.

Sanford expressed admiration for his Connecticut competitors – a list that includes Ring’s End and Ridgefield Supply. And his company is a big believer in sharing information through roundtables and store visits.  “There’s nothing like having another lumber dealer walk through our yard and give us constructive feedback, and there’s nothing like walking through another yard to see how they operate,” he said, during a tour of the Sanford and Hawley distribution yard.

The sharing of ideas will factor heavily in his approach to his new role at the NLBMDA: “I think the big goal I have is to continue the work of my predecessors — helping the dealers, suppliers and manufacturers understand the value of the association and the benefits of participation.”

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RISI Crow’s Market Recap for June 22
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RISI Crow’s Market Recap for June 22

Light trading forced SPF producers to come to market with lower quotes; meanwhile, the OSB market went all over the map.

BY HBSDealer Staff

A price index of lumber and panels used in actual construction for June 22, 2018.

Western: regional species perimeter foundation
Southern: regional species slab construction

Crow’s Market Recap: A condensed recap of the market conditions for the major North American softwood lumber and panel products as reported in Crow’s Weekly Market Report.


Lumber

Light trading forced SPF producers to come to market with lower quotes. Sales occurred at various levels, often within a wide range. Another multi-day stretch of futures losses left an ample amount of uncertainty in the market. Western mill sales more focused on Doug Fir reduced the need to sell SPF.

  • Southern Pine producers approached the market with greater urgency as prompt shipping volumes grew. Buyers were keenly aware of downside risk involved with purchases and looked to buy at low levels covering any price declines over the next few weeks.
  • Prices continued to decline throughout the Coastal species market. Around mid-week, producers moved off significant volumes of green Doug Fir, helping firm those prices. Still, prices across all dimensions in green and dry ended lower than the prior week.
  • The Inland lumber market weakened in both Fir-Larch and Hem-Fir, as Canadian lumber production continued to suppress the market. Some Inland producers had backlogs of cars to ship, reducing their need to take excess numbers of orders at discounted levels.
  • The same general trend persisted across North American stud markets. Pricing for 8’ items continued to hold or show minor weakness. Meanwhile, higher priced 9’ and 10’ items tended to decline by double digits.
  • Neither Ponderosa Pine Mldg&Btr nor Shop ramped up their activity from the demand side, and prices held stable. Major users of Ponderosa industrials can find ample supplies of stock without price changes; users on the fringe are less well supplied. Ponderosa Pine Selects and Commons enjoyed a rarity: a demand-driven week that resulted in some market changes.
  • Mill sales activity and descriptions of the Western Red Cedar market varied, most often depending on a producer’s product mix. Those producers sawing for timbers described strong sales and tight supplies. Those producers relying on decking as part of their product mix struggled more to sell production.


Panels

The OSB market went all over the map this week with discounts and special deals, making market prices difficult to pinpoint. Western Canada softened precipitously and buyers were reluctant to jump in, opting to run down inventories until a trading level is found.

  • Southern Pine plywood buyers held off purchases whenever possible, seeing producers continue to offer lower prices. Some of the deepest discounts attracted buyers, in part because aggressively priced panels carried prompt ship dates. Some carloads sold at deep discounts to rid producers of excesses.
  • Production outpaced demand as the Western Fir plywood market limped through its third week of more modest sales activity. Many western buyers continued to purchase truckload volumes like clockwork. A lack of carload sales to eastern customers limited the ability of mills to maintain order files.
  • The Canadian plywood market remained quiet but firm this week, with limited mill level action but busy yards at the distribution level. Sources indicated the digestive period may be nearing an end.
  • Particleboard producers reported good sales with order files out to mid-July. Some lead times extended a little further.
  • MDF sales remained strong. Moulding manufacturers continued to purchase steady volumes, supplying a growing residential construction market and strong repair and remodeling sector.

For more on RISI, click here.

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RISI Crow’s Market Recap for June 15

SPF trading was quiet; meanwhile, some deeper cracks formed in the OSB market.

BY HBSDealer Staff

A price index of lumber and panels used in actual construction for June 15, 2018.

Western: regional species perimeter foundation
Southern: regional species slab construction

Crow’s Market Recap: A condensed recap of the market conditions for the major North American softwood lumber and panel products as reported in Crow’s Weekly Market Report.


Lumber

SPF trading was quiet, forcing prices sharply lower. Buyers sensed the potential for significant downside risk and approached the market cautiously. A futures board showing four straight days of down-limit moves through Wednesday reinforced buyers’ apprehension.

  • Southern Pine prices continued to weaken, prompting buyers to purchase sparingly. Buyers filled in inventories only where necessary, one producer calling them “grocery store orders.” Weakness was generally more pronounced in 2×4.
  • Discounts deepened and grew more plentiful in the Coastal species market. Traders frequently pointed to several days of sharp declines in futures for the lack of sales activity. Aggressive wholesalers and spotty deep discounting by producers forced others to lower quotes.
  • The Inland market became less consistent this week, as price softening in other regions increased and put pressure on the Inland region. Price declines were more evident among Inland mills than in previous weeks.
  • Stud prices were flat to down across almost all items as the market grew quieter. Producers opened to deeper price cuts in 9’ and most commonly in 2×4, generating a wide array of sales levels. Lumber futures losses for most of the week received much of the credit for the quieter tone.
  • The lack of strong market fluctuations in Ponderosa Pine Mldg&Btr and Shop should not be interpreted as a slack market. Activity levels were reported adequate to keep market prices stable and solid. Major producers have largely turned their production schedules away from Ponderosa to dimension lumber. Ponderosa Pine Selects stayed very stable. Ponderosa Commons showed a few price changes, but a noticeable change in #2 Common, with increased inquiries and small upticks in a few prices.
  • Market share was of some concern to Western Red Cedar traders. Prices of some items are prompting buyers to switch to alternative products, even though competing prices have also risen over the past year.


Panels

Some deeper cracks formed in the OSB market as buyers were spooked by high prices which came down in most regions. Western Canada and the southern U.S. regions appeared most vulnerable.

  • Southern Pine plywood producers experienced the slowest week of sales in many. Order files most often remained in the same weeks that were established the week prior. Some of those lead times extended into the week of July 2, prompting those producers to hold quotes firmly. Others discounted.
  • Sales slowed further in the Western Fir plywood market, leveling prices after several weeks of modest to moderate increases. Buyers in the East purchased units out of reloads and highly mixed carloads.
  • Canadian plywood markets remained in a digestive mode this week. While things were quiet on the mill side, distribution reported brisk warehouse activity. Among all contacts, there is a sense that any influence out of the ordinary could generate a fresh wave of excitement.
  • Particleboard producers were often content with the amount of orders they received. More reported a moderately better pace than in previous weeks.
  • MDF sales were most often described as “good” to “brisk.” Prices from some producers continued to be raised in response to both demand and higher production costs. In a few instances, MDF order files extended beyond what producers were comfortable with.

For more on RISI, click here.

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