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PalletCentral • September-October 2021 23 third quarter and is expected to maintain that pace through the year. Now we flip the coin to the "worst of times." I have covered the workforce issues and its contribution to the challenges of 2021. A second factor negatively impacting lumber supply is freight, both cost and availability. Sawmills have sold orders sitting in warehouses waiting for a truck. While they wait, the price of shipping can increase or the freight order is cancelled. There are reports of freight companies finding a better price from a more desperate customer and the first order is dropped. While many industrial materials are delivered on company-owned trucks, the pressure to keep these trucks on the road and limitations on driver time are factors. Buyers are asked to pick up orders. One mill reported that logistics was formerly a part-time job for one person and it has turned into full-time work for two people. The second person was doing other tasks before that are now spread among the rest of the staff. Freight costs have also become "priced at time of shipment." That makes it extremely difficult for end users to anticipate cost of goods. Pallet, flooring, furniture, and millwork manufacturers that I have spoken with have all had multiple price increases in the past six months to keep up with the cost to produce. Customers are tolerant because they have few choices. Timber availability was low in early 2021 but has improved as loggers are returning to work. Others are purchasing or leasing equipment that increases production. I am not a forecaster but do believe from all indications that overall lumber supply will increase in coming months. Timber supply has improved, worker availability should increase, and production efficiencies are rising. The hardwood production industry has a history of turning these bests into worsts in a few months by over-supplying a hot market. That has not been the case in 2021 because worker and timber shortages have limited production. Workforce issues have hurt every sector – from manufacturing to restaurants to retail. Government payouts have kept too many workers on the sidelines as they are satisfied with stimulus payments. Most sawmills continued to work through the pandemic as "essential businesses" but low-skilled, low-wage workers left their jobs by their own choice. They could receive state or federal payments with few eligibility requirements. As demand for lumber increased, sawmill owners were calling these former employees to come back. Too many of them refused and mills have been forced to operate with fewer people. One sawmill was completing a headcount each morning to determine who showed up and the skills they had. The managers then decided who would operate the saw, stack lumber, or load or unload kilns. It hurts efficiency and lowers production to have higher-skilled workers doing low-skilled jobs but the mill could still operate. This is in the "worst" of times category. Many Appalachian sawmills are running 45 to 50 hours per week to meet demand. The existing workers are fine with the additional pay for a few weeks, but others have opted out of the extra income to have more time at home. You cannot fault those with families, but it limits a mills' production at a time when they cannot get new employees. Many states have ended the unemployment payments and the federal stimulus is expected to end in September. It is hoped this motivates people to return to work. Sawmills are actively seeking workers with job fairs, social media advertising and incentives to existing workers to "bring a friend to work." If that new hire stays, the existing and new employees receive a bonus. The hourly wage has also increased for entry level and up through the mill. To attract and keep the best, good or almost any worker today demands a higher wage, benefits and incentives. All of those come with a cost that is factored into the price of lumber or cants. It is estimated that hardwood lumber production was on pace to achieve seven billion board feet in 2021 based on the first six months. I believe it will be higher as production has improved in the Tom Inman is President of Appalachian Hardwood Manufacturers, Inc., a trade association of hardwood lumber producers, distribution yards, secondary manufacturers and foresters in the 12-state region. Founded in 1928, AHMI is headquartered in High Point, NC. Please visit them at www. appalachianhardwood.org. To attract and keep the best, good or almost any worker today demands a higher wage, benefits and incentives. All of those come with a cost that is factored into the price of lumber or cants.

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