National Hardwood Magazine - September 2021

AHEC REPORT
WHEN THE BEST AND THE WORST CONVERGE…
“It was the best of times, it was the worst
of times…” wrote Charles Dickens in A Tale
of Two Cities, in 1859. That great book was
written in the backdrop of the French Revolution,
an especially turbulent time in history
when dynamically opposing forces in politics,
religion and economics converged.
That time has significant similarities with
our time now culturally, but also similarities
in world economies and drilling down, similarities
in our Hardwood lumber economy
and especially in exports.
We have had countless conversations
with our peers, customers, vendors, and
transportation service providers who summarize
that demand is high and supply is constrained.
Nothing new to most of you. I will leave it to those smarter
than me (there are many) to prognosticate further
about prices, but you would have to have been “Cast
Away” on an island not to experience firsthand the dramatic
change in consumer appetite, worldwide. There
has been a sea change in consumer purchase patterns
away from “service” or “experiences” to durable goods. It
is not unreasonable to attribute that to the affects of the
COVID pandemic. Personal priorities have shifted, and
for durable goods manufacturers including Hardwoods,
that is a good thing. As an old-timer once said, THESE
ARE the good ole days!
One of my friends mentioned that we are in a “post
war economy.” Another suggested there is nothing like
this since the American Industrial Revolution of the 1880-
1910 era, when as a matter of fact, there were more millionaires
per capita in Williamsport, PA, than anywhere
else in the world, due to booming wood products demand.
We will not all become millionaires of
course but suffice it to say our industry is riding
a tidal wave.
One of the consequences of worldwide
consumer demand for durable goods is logistics,
shipping. I have had the pleasure to talk
off the record with a notable shipping executive.
Here are some key points. The shipping
lines Exec’s comments in quotations:
- There are no known seaworthy shipping
vessels not in use. It takes years to build a
new vessel, so ocean shipping is at full capacity
(nobody knows for sure but there is
probably upwards of 20 percent more cargo
tonnage on the water now than in any time in
human history).
• U.S. import volume is up 70 percent from last year,
and container prices for imports are at “auction” prices.
Today’s price is $15,000 per Ctr from Asia to U.S./EU.
• U.S. export volume (all goods) is down 14 percent
because shipping lines are returning empty containers to
Asia. Empty containers are more valuable in Asia than
the “back haul” is worth.
• “It’s not only U.S. and EU destinations in demand (although
they are leading), even India and other emerging
markets volumes are either stable or higher, even now
during pandemic shutdowns.”
• COVID has and still is upsetting port’s ability to quickly
unload and reload vessels, around the world. Congestion
at all the main seaports is a current crisis that will
continue into next year at least. “Even if a magic wand
solved today’s crisis overnight, tomorrow’s freight volume
would overwhelm the system again.”
• “Rail, trucking, port labor pool, and a lack of enough
Please turn to page 73
BY DAVE WHITTEN,
DIRECTOR OF EXPORTS, BINGAMAN AND SON LUMBER INC.
AMERICAN HARDWOOD EXPORT COUNCIL, CHAIR
STERLING, VA
703-435-2900
WWW.AHEC.ORG
18 SEPTEMBER 2021 n NATIONAL HARDWOOD MAGAZINE SEPTEMBER 2021 n NATIONAL HARDWOOD MAGAZINE 19