Category Archives: News

B.C. forest companies can’t get enough rail cars to ship products to customers

B.C. forest companies can’t get enough rail cars to ship products to customers.

VANCOUVER – B.C. forest companies say they can no longer get enough rail cars to move their products to market at a time when the U.S. housing market is going through a major recovery.

U.S. housing starts topped one million in March on a seasonally adjusted rate, more than double the low point hit during the recession, prompting a run on rail cars that Canadian mills use to get their wood products to market. It’s not just lumber that’s being affected. Oriented strand board, plywood and even pulp inventories are building at the mills, forcing companies to turn to trucks – which are also in short supply.

“If you had a pickup truck, we would use it,” Bob Hayes, transportation vice-president at Canfor Corp. said Tuesday.

Earlier this year, Canfor came within four hours of shutting down a pulp mill because of a rail car shortage. Pulp production is also up and because it is perishable, it cannot be stored outside, Hayes said. Canfor has erected a big-top style tent at one of its Prince George pulp mills to store inventory but so far hasn’t had to use it.

However, the rail car crunch is adding to costs, from additional trucking to causing ships to be delayed in port, he said.

“We were trucking this week from Prince George to Squamish terminal. We have never done that before. We had to find emergency trucks this weekend to go from Prince George to Squamish to keep the product flowing to the vessels and to keep the warehouses from overflowing,” Hayes said.

“I think transportation and the lack thereof, is going to be the biggest challenge for B.C. forest products companies to get their product to market in 2013 and beyond. Usually economics will drive solutions, but right now, that solution is to constrain the industry.”

Catherine Cobden, executive vice-president of the Forest Products Association of Canada, said the rail car shortage is systemic, with both CN and CP unable to deliver enough cars to meet growing demand.

“It’s very disappointing at a time when markets are rebounding and we are gearing up to support and supply, not just our traditional markets but our growing emerging markets,” she said.

“Our members are saying in some cases they are only getting half the cars they need to service their marketplace. Obviously this is a very difficult and untenable position for us.”

U.S. housing starts reached 1.036 million units in March on a seasonally adjusted rate, seven per cent higher than February and 46.7 per cent above March 2012, according to the U.S. lumber publication Random Lengths. March’s rate was the highest since 2008. The 2013 forecast had been for from 885,000 to 985,000 starts.

Doug Routledge, acting president of the B.C. Council of Forest Industries, said B.C. sawmills have responded by returning to two shifts. Employment in the forest industry has climbed marginally, from 51,490 direct jobs in 2009 to 56,340 in 2012, according to Statistics Canada.

“Most mills are back on a two-shift capacity which would be equivalent to normal production levels. A few mills, not many, have added in a graveyard shift. But it’s being buffered by transportation issues – not just railcars – where people are not able to get rid of finished inventory. That is buffering the ability to put on that third shift here and there,” Routledge said.

“We aren’t currently not supplying the U.S. market with quite as much product as I think they would like. It’s shortage of rail cars, a shortage of trucks and generally, a shortage of all transportation vehicles.

Further, a shortage of skilled labour is hitting the supply chain.

“There’s no question: There’s a shortage of drivers and a shortage of trucks, whether lumber or log, to move the product,”

The rapid rebound in housing coupled with the rail car shortage has forest industry leaders wondering if the two rail companies will be able to provide enough cars on a long-term basis to meet the U.S. appetite for Canadian wood products.

In an email statement, CN said since January, CN has been challenged by extremely cold weather in Western Canada, snowfall and several line disruptions.

“As a consequence, train velocity has declined, while terminal dwell times at classification yards have risen. These factors have adversely affected the productivity of the rail network, as well as service levels for all customers,” CN spokeswoman Emily Hamer said in the email.

“Throughout the winter we have been in close communication with our customers to keep them informed of these situations. We continue to work with customers to address their service needs.”

Routledge said CN has told the industry that rail cars got sidelined and then frozen in the snow.

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Smokey Bear App for Android and Apple smart phone

Get Your Smokey On. With Smokey Bear’s official mobile site and apps, you’ll see step by step how to properly build and put out a campfire. Smokey Bear’s campfire safety guide will help keep you, and others, safe when cooking and camping outdoors. You’ll also have access to exclusive Smokey content and get easy access to all Smokey’s social media networks including his YouTube channel, Twitter account and Facebook page. So get your Smokey on, visit the site, download the app, and tell a friend.

Remember, only you can prevent wildfires.

Click on the link below.

App Screen Shots

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Biking for Cabinets in Rhode Island

Biking for Cabinets in Rhode Island – Harvard University Press Blog.

If you found yourself at a backyard birthday party in North Providence this past Saturday evening, you may have overheard a conversation about bicycling. A handful of Rhode Islanders were describing recent long rides, commiserating over the mistake of overindulgence at the halfway mark. One told of marking the turn with too many boozey beverages, making for a risky ride back. Another recalled pausing in a long pedal for a heavy lunch, after which her partner wanted to get a cabinet, too.

You’d have been forgiven for assuming that the conversation had just taken a strange turn towards office furniture. But, actually, you’d just been gifted with a regionalism. As one of the partiers explained, “cabinet” is Rhode Island speak for “milkshake.” None present had a notion as to why, nor did they really need one, standing in that yard, fenced by knee-high chain link, driveway full of old station wagons, and having just gotten a tour of a home frozen in time, with a completely stocked basement bar seemingly untouched since the ’70s, and a lushly green-carpeted hallway, decked with old garden sprinklers wall-mounted like hunting trophies. Rhode Island’s just weird, no explanation needed.

Just kidding, OF COURSE we want an explanation. That’s what the Dictionary of American Regional English is for:

cabinet n: A milkshake. Chiefly used in Rhode Island and Southeastern Massachusetts.

The etymology is actually uncertain, but a woman from Fall River interviewed in 1968 claimed it originated in a drugstore there, named by the pharmacist who concocted it. “The ice cream was kept in those days in a cabinet that was part of the soda-fountain set-up,” reads the DARE entry.

The entry also cites a letter to the Today Show from 1971 that explains that a milk shake in Rhode Island is without ice cream, while a cabinet has ice cream. And a Smithsonian letter from a Rhode Islander in 1982:

In Rhode Island this term more likely refers to a milkshake (using milk, syrup, and ice cream) than a piece of furniture. I grew up five miles from the Massachusetts border. As a child I could order a cabinet in R.I., but had to remember to order a frappe just five minutes to the west.

Because “frappe” is totally normal. Carry on, America.

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3 in 10 Retailers Unable to Identify Customers at the POS

3 in 10 Retailers Unable to Identify Customers at the POS.

brp-customer-id-pos.jpg31% of North American retailers remain unable to identify their customers at the point of sale (POS),according to [download page] a survey released in January 2012 by Boston Retail Partners (BRP), which also found that no retailers identify customers by mobile device. The most common customer contact information available at the POS includes telephone numbers (38%), customer/identification number (34%), email address (34%), name and address (31%), and member/club number (28%).

Roughly one-quarter of respondents say driver’s license and private label credit card information is available to them at the POS.

1 in 3 Say No Info Available at Store Level

32% of retailers also report that they are not providing customer information to associates at the store level. Half the retailers surveyed said they can access customer contact information, and 54% can access transaction information for returns. However, only one-quarter can access sales history at the store level, and just 14% can access information such as warranty and service lookup, purchase summary, or customer-specific offers and discounts.

Furthermore, 38% of the retailers surveyed have no plans to implement the ability to view period and life-to-date customer summary information, and 35% have no plans to implement full transaction history lookup ability or customer-specific messaging.

Customer Service a Priority, Though

brp-store-level-priorities.jpgAlthough retailers’ lack of store-level customer data and plans to implement customer-specific messaging might suggest that customer service is not a top focus, 3 in 5 retailers identified customer service as a top store-level priority, ahead of multi-channel integration (52%) and associate training (37%). According to BRP insight, the key for successful retailers is to take customer service to the next level and realize that an optimal shopping experience is key to gaining and holding on to customer loyalty.

Retailers Agree Customers Want Great Service

Data from BRP’s “13th Annual POS Benchmarking Survey” indicates that retailers are in agreement that customer service is important to customers, with 82% saying it is very important, and the remaining 18% identifying it as important. Indeed, according to survey results released in January 2012 by Weber Shandwick, the quality of specific companies’ customer service is the second-most discussed topics among global consumers, cited by 55% of respondents.

A majority of BRP survey respondents also agree that efficient processing at the register/speed of service (75%) and in-stock position (71%) are very important to customers. Of note, one-third said that self service options are not important to consumers. Retailers may be missing the mark on that aspect, though: a Cisco Internet Solutions Business Group survey released in January 2012 found that a majority of US and UK shoppers report current activity (24%) or interest (29%) in conducting research at an in-store kiosk and making their purchase immediately in the store. Additonally, a Motorola Solutions survey released in December 2011 found that the vast majority of shoppers report that self-help technologies have improved their shopping experience, with the highest approvals being for price checkers (83%), self-checkout payment lanes (65%), and information kiosks (59%).

About the Data: The BRP results are based on a survey of more than 500 top North American retailers in November and December 2011. Over two-thirds of the retail respondents fell into the specialty category with the remainder in other lines of trade such as automotive, furniture, and grocery. Of the retailers surveyed, the breakdown in size based on gross annual revenue included a broad selection of Tier 1, 2, and 3 retailers, with 43% falling under $1 billion and the other 57% with revenue above $1 billion. The specific respondents for each company were mainly Vice President/Director of IT or C-level executives.

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Lumber business looking up, Conference Board says

Lumber business looking up, Conference Board says

Lumber producers will double profit, create 6,000 jobs in 2012

CBC News

Posted: Dec 21, 2011 4:01 PM ET

Lumber producers will do much better in 2012 because of rising exports, the Conference Board says.  Lumber producers will do much better in 2012 because of rising exports, the Conference Board says. (Jonathan Hayward/Canadian Press)

After a slowdown this year, lumber producers will double their profit in next year and create more than 6,000 jobs.

“A long-awaited recovery in U.S. housing markets and growing demand in China and Japan are responsible for this more promising forecast,” the board said in its outlook for the wood products industry, released Wednesday.

Producers have been looking for markets outside the United States after litigation following the 2006 softwood lumber deal led to higher tariffs on Canadian wood, the board said.

Lumber companies’ profits
Year Pre-tax profit (loss), millions
2008 ($837)
2009 ($887)
2010 $464
2011 $283
2012 $565
2013 $720
Source: Conference Board

That, and a downturn in the U.S. housing market, prompted producers to look east.

The result: between January and September of this year, 63 per cent of Canadian wood exports went to the U.S., down from 86 per cent in 2006. Meanwhile, exports to China represent 14 per cent of the total this year, up from one per cent in 2006.

China needs wood for building in its rapidly growing economy. Japan needs lumber for rebuilding following the earthquake and tsunami in March.

“Canada has been diversifying its export markets away from the United States for several years, and gains in export sales will be responsible for industry growth in the next few years,” said Michael Burt, the board’s director, industrial economic trends.

But the U.S. market is still very important, and statistics suggesting the housing market is coming back will help drive double-digit growth in exports over the next two years, the board said

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CR: Ten Economic Questions for 2012

Ten Economic Questions for 2012

by CalculatedRisk on 12/18/2011  

Last year I listed Ten Economic Questions for 2011. These are still important questions for 2012, so once again I’ll try to add some thoughts on these questions – and a few predictions – before the end of year.

1) House Prices: How much further will house prices fall on the national repeat sales indexes (Case-Shiller, CoreLogic)? 

2) Residential Investment: Residential investment (RI) made a modest positive contribution to GDP growth in 2011, the first positive contribution since 2005. RI is mostly investment in new single family structures, multifamily structures, home improvement and commissions on existing homesales. Historically RI has been the best leading indicator for the economy, but the growth in RI will probably be modest again in 2012. How much will RI increase in 2012? 

3) Distressed house sales: Foreclosure activity is still very high, although activity slowed in 2011 because of “foreclosure gate” issues. The number of REOs (Real Estate Owned by lenders) also declined in 2011. Will foreclosure activity pick up in 2012? 

4) Economic growth: It appeared GDP growth would increase a little in 2011, but then the economy was hit by a series of shocks including extreme weather (significant snow storms, flooding, hurricane Irene), the oil price increase related to the “Arab Spring”, the tsunami in Japan, and the debt ceiling debate in D.C. during late July and early August. Even with all these shocks, 2011 real GDP growth was still positive, but below trend.

Heading into 2012 there are significant downside risks from the European financial crisis and fromU.S. fiscal tightening. Will the U.S. economy grow in 2012? Or will there be another recession?

5) Employment: The U.S. economy added about 132 thousands payroll jobs per month in 2011 through November (156 thousand private sector). Although this was an improvement from 2010, this was still weak payroll growth for a recovery. How many payroll jobs will be added in 2012?

6) Unemployment Rate: The unemployment rate is still elevated at 8.6% in November. Last year, my prediction was for the unemployment rate to still be above 9% in December 2011. I thought the participation rate would increase a little in 2011 – however the participation rate continued to decline – and that pushed down the unemployment rate.

I still think we will see some bounce back in the participation rate – and that will put upward pressure on the unemployment rate. What will the unemployment rate be in December 2012?

7) State and Local Governments: It is starting to look like there will be less drag in 2012 than in 2011. How much of a drag will state and local budget problems have on economic growth and employment?

8) Europe and the Euro: What will happen in Europe in 2012? How much of a drag will the problems in Europe have on U.S. growth?

9) Inflation: Will the inflation rate rise or fall in 2012?

10) Monetary Policy: Will the Fed introduce QE3? Will the Fed change their communication strategy and include the likely future path of the Fed Funds rate?

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Rural America’s timber dilemma

Rural America’s timber dilemma.

By Dale Bosworth

December 18, 2011

During my long career with the U.S. Forest Service, people frequently expressed their concerns about the management of public lands to me when I’d run into them at the grocery store or on a hiking trail. One of the main issues they brought up had to do with the relationship between timber harvests and county budgets.

Here’s the dilemma. Counties traditionally rely on property taxes to fund basic services and education. But local governments cannot tax national forest land, and many Western states have a high percentage of their land in federal ownership. In Idaho, for example, about 63% of the land is owned by the federal government (as compared with, say, New York, where less than 1% of land is in federal hands).

To help compensate local governments for that loss of tax revenue, the Forest Service for decades returned 25% of the money it made from harvesting timber to the county government where the logging occurred. But that was problematic too because revenues were prone to wide swings depending on how much timber was harvested and what price it brought.

To address the uncertainty, Congress in 2000 passed the Secure Rural Schools and Community Self-Determination Act, which guaranteed revenues to counties based on past timber receipts. The act also introduced new goals of funding restoration and stewardship projects on public lands to help communities improve forest health and diversify their economies. In 2008, funding was extended through 2011 and some revisions were made to the law.

Next year, unless the program is renewed, the payment system will revert to the old method, in which counties receive 25% of timber revenues. This formula would return uncertainty and drastically reduce payments to counties at a time when rural America is already struggling.

A working paper put out last month by the Oregon State University Rural Studies program estimated that Oregon (with about half of its land owned by the federal government) stands to lose about 4,000 jobs and would have to make deep cuts in school funding unless the bill is reauthorized. And Oregon is just one of many states affected.

Instead of allowing the program to end, the act should be renewed, and Congress should take the opportunity to better align payment incentives with current economic realities and forest health goals.

Unfortunately, current proposals from the Obama administration, the House and the Senate all fall short. The president’s 2012 budget, for example, proposes to phase out the payments over two to five years, with no clarity for how the federal government will assist counties with large amounts of public land going forward.

In addition, the administration proposal would, for the first time, fund the payments directly from the Forest Service budget, a budget already stressed by deep cuts. Subjecting the county reimbursements to the annual appropriations process rather than setting up a multiyear reauthorization would make it difficult for many counties to provide basic services.

In the House, a draft bill proposes a timber-only approach in which logging would pay for all future federal payments to counties. This would be accomplished largely by rolling back environmental laws and abandoning collaborative efforts. Even if this bill could pass, it would require unsustainable logging levels to maintain payment levels, and it would require more federal spending than current appropriations.

In the Senate, a draft bill proposes continuing the current payment system at a reduced level for five years, but that only kicks long-term reform down the road.

There is still time before the payments end in mid-2012 to pass legislation that ties future county payments to achievable forest management goals and provides real economic options for counties.

One promising idea would be to deliver payments to counties based on economic need, so that payments are targeted to ensure the best use of taxpayer dollars. Another would be to link funding to efforts by counties to improve ecosystems and recreation opportunities on federal lands.

Although logging alone cannot lift rural economies, logging combined with forest and watershed restoration work — a timber-plus jobs bill — could be the basis for both funding and job growth in counties.

Dale Bosworth worked for the U.S. Forest Service for 41 years, and served as its chief from 2001 to 2007.

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