October 19, 2016 § Leave a comment
According to news that’s filtering through to us in the great White North, these be challenging days as friends and relatives to the south wrestle with decisions in advance of November elections, said by some to be aimed at “making America great again.” Say what? Again? Let us echo a Toronto ad agency’s campaign that helps cut through the negativity in play.
Having just returned this morning from the classy LBM Advantage Forest Products Conference, I was also reminded just how invigorating it is to connect with people face to face. It’s been said that the best social network is a table and two chairs, or, in the case of the Dakeryn table inside the packed White River Ballroom at the beautiful JW Marriott Indianapolis, a table and six chairs! Despite election angst, dealers appear to be cautiously optimistic about business for the balance of the year. While bullish on 2017, the extreme hand-to-mouth buying patterns in evidence suggest an emphasis on risk management through December. Coming from B.C., where we are inundated with SLA headlines, it’s interesting to note there so far seems to be little weight given to possible cross-border softwood lumber trade constraints in relation to market impact.
Upon arriving home late last night, my wife relayed this story after picking up our five-year-old from Kindergarten yesterday:
Evie: “Mommy, I made a new friend from my class today”
“Oh? How did that happen?”
“He came up to me and said ‘Evie, give me all your Bunny Crackers.'”
October 11, 2016 § Leave a comment
According to a report at World Trade Online from Jenny Leonard, IWP News, last Wednesday’s meeting in Toronto between U.S. Trade Representative Michael Froman & Canadian Minister of International Trade Chrystia Freeland “did not yield sufficient progress”. Some takeaways from the report:
- Multiple sources expect the U.S. lumber coalition to file a petition on Oct. 13 – the first day after the deadline expires – but they also note that the preliminary determinations won’t be announced by the U.S. Commerce Department until February or March, which gives both sides more time to talk.
- One source said it is “very common timing” to get a deal done before duties attach and noted the two sides could still “engage in negotiations parallel to a case.”
- The talks with the Obama administration can last only another seven weeks – leading some to doubt whether there is enough time to discuss all the outstanding details of the deal before a new administration’s team is put in place.
- So far there has been no meaningful engagement on those details – including the target number for U.S. market share, an exit strategy for Canadian provinces to get out of the deal if they can prove their lumber is not subsidized, and the exclusion of certain provinces that were not part of the old softwood lumber deal.
- Canada wants the new deal to reflect its provinces’ different demands – an approach referred to as “optionality” that was central to the framework of the expired deal.
- The U.S. is holding on to its demand for a quota-only approach, which it says would limit Canadian lumber in the U.S. with certainty.
- According to multiple sources, Froman emphasized during the meeting that the Canadians are better off reaching an agreement with the Obama administration by the end of this year – and noted that because of the transition period in which a new USTR must be nominated and confirmed, it could be months before the U.S. can come back to the table to discuss lumber trade.
- While both sides have not yet ruled out the possibility of a deal being reached before duties are applied, one Canadian source said “we are now in the days of magical thinking. There is too much ground to be covered,” the source said. “The two sides have been talking past each other for more than a year.”
October 5, 2016 § Leave a comment
Turns out prices aren’t set by Random Lengths afterall. Adam Taggart, President of Peak Prosperity, explains that prices are actually determined by two things: the upper limit that the marginal buyer is willing to pay, and how intensely the competition from other buyers pushes him towards that limit. Taggart tells us that this basic economic principle that prices are set at the margin, “is just as true for stocks and housing as it is for fine art,” adding: “Most of us don’t really think about the marginal buyer much, but he (or she) is very important. The marginal buyer can evaporate faster than you think. That is the nature of an asset bubble’s unavoidable destiny to pop.”
So what happens when the “current” marginal buyer of an asset disappears? “Prices must fall to become affordable to the next marginal buyer,” confirms Taggart. The example he cites hits home. He submits the marginal buyer of Metro Vancouver real estate has vaporized since the provincial government’s August 2nd passage of the 15% foreign buyer tax. His expert analysis makes for an interesting read, here.
Wall Street Farm Animals?
When a truckload of pigs going to slaughter rolled over this morning in Burlington, Ontario, it’s reported the surviving swines sprung to their hooves and made their getaway. Freedom! We’ve since learned that all that futures bacon has been corralled. The Great Escape was foiled. Bummer. It’s certainly a reminder there’s no underestimating the relative value pigs bring to the table when it comes to serving up a good breakfast. The chicken makes a significant contribution, but the pig makes the real commitment.
September 29, 2016 § 1 Comment
The moment when somebody is on your website, interested in what you sell, and in need of answers, is The Question Moment of Truth (QMOT) explains marketing consultant Barry Feldman. Based on his interview with popular social media strategist Jay Baer, Feldman explores how well companies are responding to this critical moment here. Some takeaways:
- Companies are generally not responding well enough to the QMOT. “Too many organizations still feel like there’s a reason for somebody to come to their site other than if they have a question or problem.. (as though) somehow going to their website is going to be valuable entertainment. A lot of brands still believe they are somehow competing successfully against Facebook for attention.”
- “Websites are the only form of communication in the history of communication where every individual consumer of that content has to relearn how to navigate that content every time. Every website has different navigation, which is absurd on surface.”
- “We are at a point, a transition phase, where business websites are going to become less, not more – and should – because nobody wants to go to your website unless they have a very specific task in mind.”
- “Just because somebody comes to your website doesn’t mean anything, it does you no actual good unless the person who comes to your website then takes a subsequent action.”
So how does that “subsequent action” happen in the e-commerce experience? (this “weird game of informational peekaboo” as Baer describes it). And what happens when a prospect visits your website and can’t find what they’re looking for?
Baer and Feldman struggle for answers. They tell us offering more website options and channels to communicate is a possible solution, but timing – how to engage when the customer wants and needs to engage – is the challenge. Adds Baer, “Some people hate live chat, some people love it. And this idea that everybody has to call us doesn’t make sense because people don’t want to wait on hold.”
Perhaps it’s all not so complicated. It seems that an easy-to-navigate website, with concise information customers want, might be sufficient?
“We’re so focused on customer acquisition that we don’t spend enough time thinking about customer retention, and certainly not enough time thinking about what our current customers can tell us about what we should offer in the future.”
September 14, 2016 § Leave a comment
It’s not everyday that lumber traders get to climb 18 flights of stairs to see first hand how mass timber is reshaping methods and process on industrial construction projects. It was our privilege yesterday to visit the UBC Brock Commons site with our NAWLA Vancouver Regional Planning Committee. The private tour, arranged and lead by Oscar Faoro, Contractor – Special Projects, Canadian Wood Council (NRCan – Canadian Tall Wood Building Demonstration Project Initiative) offered closeup look at one of the tallest hybrid mass timber buildings under construction in the world.
The memorable afternoon included an informative presentation by Oscar at the Brock Commons Education and Outreach Centre. He detailed the high performance, cost effective, sustainable solutions in support of the business case for Mass Timber Construction. In architecturally magnificent, wood enhanced surroundings of the Wesbrook Community Center, Ralph Austin, Seagate Structures introduced us to background information. Seagate was awarded the contract for wood installations at Brock Commons. We also viewed the planned site of Virtuoso by Adera, the first six-storey, hybrid Cross-Laminated Timber (CLT) building in Western Canada.
Special thanks also to Karla Fraser, Senior Project Manager, Urban One Builders, who lead our group in the informative tour to the top, with kindly consideration for respite at occasional elevations to both absorb information on stages of construction – and catch our breath.
September 7, 2016 § Leave a comment
Elizabeth Browning’s poem The Autumn refers to this time of year “Where waving woods and waters wild Do hymn an autumn sound.” For many of us, this year’s first sounds of fall bring an unusual mix of seasonal notes:
Amid Maritime vacation memories not yet fully unpacked come reviews of first day of kindergarten for my four-year-old, a tumble and fall off the bus on day one of Grade One for my six-year-old, and newspaper reports suggesting the provincial government could seek exemptions from export duties for B.C. re-manufacturers that might come in a new Softwood Lumber Agreement with the U.S.
Ensuring access to timber for the value-added sector poses ongoing challenge. It is hoped the proposed exemption would provide incentive for big timber licensees to make more wood available to the value-added segment of the forest industry. Meanwhile, a report today from CIBC Capital Markets cites a source via Inside U.S. Trade who suggested SLA negotiations were closer at the 100-day period than they are now.
It seems the “chilling autumn winds” that Browning talked about could deliver more than a bloody lip that highlighted my daughter’s Grade One debut. Amid election-fueled talk of softwood negotiations, lumber traders are bracing for the October 12th standstill expiry to deliver more tears than exemptions.
August 23, 2016 § Leave a comment
Its been said that western lumber traders who go to the Prairies for a late summer vacation travel against the grain. For this trader, it’s the generous hospitality of the Canadian Maritimes that beckons before summer expires. I’m told I’ll know I’m in the Maritimes when someone in a building supplies store offers assistance and they don’t even work there. I’m looking forward to boarding the red-eye out of Vancouver tonight, and getting into the vacation spirit with extended family in New Brunswick, where they say a vacation means going anywhere south of Saint John for the weekend.