Many readers cite quality products as a defining difference that separates their company from the competition. So what to do when the lumber you’re purchasing doesn’t stack up to the quality you and your builder customers are accustomed to? More than 30% of respondents report that the lumber they’re receiving today is either “somewhat worse” or “much worse” than even a year ago. Combine that with the reality of spiking lumber prices across the board and you’ve got a problem.
That’s why the topic of this Real Issue is: lumber quality.
This month’s real issue question was suggested by an Illinois LBM dealer who wrote: “The quality of materials that we are purchasing has gotten worse over the past few years, and much worse during the past year. Our lumberyard has built its business on premium lumber, and now I am fielding complaints from the custom home builders that bunks of lumber are twisted and bent. I cannot go back to our vendor/mill for credit like I give my customer, so I end up eating the dunnage. That is a lot of expense when margins are so slim. What do other yards do?”
As we do each month, we surveyed readers who’ve opted in to receive our email communications. A big thank you to the more than 270 readers who took time from their business to weigh in on this month’s issue. If you’d like to participate in future surveys and don’t receive our emails, drop me a line at Rick@LBMJournal.com, and I’ll make sure we get you added.
Question 1
First, we wanted to get a feel for how many other readers are experiencing the same issue with product quality, so we asked, “How does the quality of the lumber you purchase today compare with lumber purchased over the past year or so?” More than 60% of respondents said that the quality is “about the same”, and fewer than 7% report that it’s either “somewhat better” or “much better.” That leaves more than 30% who report that the lumber they’re buying is “somewhat worse” (27.3%) or “much worse” (4.8%). While declining lumber quality isn’t affecting all dealers, the fact that it is affecting nearly one in three respondents clearly makes this a real issue.
Question 2
“The quality of materials that we are purchasing has gotten worse over the past few years, and much worse during the past year. Our lumberyard has built its business on premium lumber, and now I am fielding complaints from the custom home builders that bunks of lumber are twisted and bent. I cannot go back to our vendor/mill for credit like I give my customer, so I end up eating the dunnage. That is a lot of expense when margins are so slim. What do other yards do?”
“Contact your supplier and talk to them about it and let them know that you might possibly be looking for a new supplier.”
“If premium lumber is not available, offer premium products—I joists, LVLs, fingerjoint studs, etc.”
“Make sure that the mill is grading lumber correctly or even visit the mill more often to see quality.”
“Buy from another mill. You might pay more, but it will keep the customer happy, and offset the dunnage.”
“There is not a cut and dry answer. Try and salvage what you can from each board buy cutting them down to shorter lengths. Cutting them into 4′ pieces and sell them to pallet companies.”
“Wow, excellent question, we cut some up, downgrade some and just keep cycling through. Not good.”
“Explain what we’re faced with and how dealing with returned rejected material impacts pricing. Try to encourage customers to use the culls where they can. There are opportunities on most framing jobs to incorporate the twisted or excessively crowned lumber without compromising the overall job quality if they are willing to make the effort. They can be used for bracing, trimmers, short cripples, blocking, etc. This is not an entirely new problem. Depends on the attitude of the framers.”
“Sell it at discount. If necessary, cut into smaller sections and then sell.”
“Stop buying #2 lumber—today’s #2 lumber is about equivalent to the #3 and econo we used to get in the 70’s. We order MSR1650 2×4’s and 2×6’s. It costs a little more, but we have very little shrink and the boards look good. Some customers just cannot be pleased. Times have changed. We used to get our package of lumber and we would separate out in three stacks— straight, slightly crowned, and really crowned—and we knew where we could use each and end up with a really good job. I guess everybody forgot how to crown studs in walls.”
“Tell the customer that the lumber is not graded for twists or bends. Let the mill know that you will source the lumber from others if necessary.”
“Pay more for your product and manage your inventory.”
“We build our business on a mix of custom and production home builders that allow us to move the ‘supposed’ premium lesser stock to the production builders to be used as backer and #3 plate stock. This mitigates the loss in margin and helps to solidify our standings with the production builders.”
“It’s never straight enough, always has too much wane, our price is too high, and our deliveries are never on time. Welcome to the lumber business! It doesn’t seem to matter what we owners/purchasers do, there always seems to be the issue of quality in dimensional lumber. I’ve accepted that quality of dimensional lumber is out of my control and, fortunately, represents only a portion of the project. Make up for the rest of the project with quality you can control (windows, doors, siding, etc.) and over-the-top service.”
“We are in the same situation. We try to keep ahead of culls by taking pictures of loads that are marginal-looking upon arrival.”
“#2&BTR lumber is now #2, all of the ‘better’ lumber has been pulled for sale at a higher price. Due to this, we have changed our 2×4 and 2×6 lumber to an Appearance grade product, our wides have been changed to a #1 SY Pine. We still have some downfall, but nothing compared to what we used to. No complaints about the quality or the higher prices. The appearance grade is a lot harder to source and re-supply. Needs have to be covered further out to assure that we have lumber when needed.”
“Beyond trying a different mill, you will have to factor the % of fall off into your pricing.”
“If it is a persistent problem from the same vendor, then what corrective actions did you take with the vendor to keep this from reoccurring? Did you have the vendor rep come by your facility to inspect the materials? If in fact it was a product defect, did you ask about a product credit? Where was the product stored at your facility? Was it stored properly according to the vendor of the manufacturer? If it was a product issue, did that vendor rep come up with a corrective action plan to minimize these issues from occurring in the future? Did you look at alternative products to see if a more consistent product was available from either the same vendor or another vendor?
“If these concerns are never expressed to the supplier, then the vendor or the factory making the product can’t know they have a problem with their product. If these issues have been brought to their attention time and again and nothing has changed, then it’s time to either find a new supplier or perhaps consider paying more for a better product.
“Lastly, regarding your custom homebuilders’ complaints about bunks of wood that are twisted and bent— did the lumber leave the yard in the expected condition? Did the builder sign for the materials upon taking delivery? If the product was as bad as your customer claims it was, why did they take delivery? Are your return policies too liberal?”
“We are fortunate to have contracted our narrows with one specific mill and our wides with another specific mill. We have been contracted with the same mills for a number of years, and both we and our customers know what to expect from a quality standpoint. We do have occasional issues that arise, and the mills typically help us out in those situations. Suggestion is to find one mill to deal with and stick to it, if it works logistically for you.”
“We buy only #1 SYP and premium euro SPF.”
“I’ve heard of others opening bunks of lumber for inspection when they arrive at the yard, mostly for moisture content. I’m not sure there is a clear-cut answer other than to sell off the rejects at a lower price with the understanding it isn’t a premium product despite its grade stamp.”
“Depends on the demographics of your customer base. If you supply a large number of custom home builders, and you want the reputation of having quality material, then you will need to red flag those suppliers who ship poor materials and quit buying from them. Make sure you communicate the value differential to your high-end builders. If your business model focuses on selling to the large production builders who are, for the most part, what I refer to as ‘bottom feeders,’ then you may need to worry less about quality. For the yard who asked this question, best you pay a little more for higher quality products.”
“We count the boards in the units that are twisted or bowed or barky and we just deduct that from the invoice when we pay for them. If vendors know you are looking, it will get cleaned up and you will start getting quality wood. If not, try different vendors.”
“Buy a better grade if your customer will pay for it.”
“Unfortunately, I have the same problems with the same results.”
“Strive for consistency over time between mills. Even dealers that shop mills strictly on price can get nice bright stock once in a while. We contract with mills that we know deliver a consistent quality of product that our customers have come to expect. We aren’t the cheapest, but day-in and day-out, our deliveries are more consistent than the hit or miss dealers that change mills all the time chasing the cheapest product available.”
“For the narrow lumber items, 4″ & 6″, we carry both inventories, one is reg 2&btr, the other is Premium. We have had the same complaint from custom home builders.”
“In the past, we’ve had a craftsman on our payroll use the lower quality lumber to build storage buildings, outdoor furniture, bird houses, etc.”
“We try and stay with the same mills that we have been buying from. Just because it is premium does not mean that is the same quality that we are used to from particular mills.”
“Have a return policy and get returns picked up immediately to minimize more damage. Bundle and sell cull materials ASAP to maximize value and turn back into whatever cash you can get out of it.”
“Good relationships with who you buy lumber from is a must. We make grade stakes and other things from our bad lumber.”
“We have to carry a lesser quality grade for a few builders where price is the only consideration. Before we dealt with these types of customers, when we did get poor quality 2×4’s, we would create a SKU for bracing/blocking so we could get something out of it.”
“Engineered wood is the alternative. It is expensive but straight and there is no mold.”
“Even though credit from your vendor/ mill is problematic, there still needs to be push back and make some noise. If enough customers are dissatisfied, they will be forced to either improve quality or make price concessions.”
“Discount it or offer it for blocking material.”
“Why has the quality changed? Is it because the mills are shipping a lower quality product? If so, that needs to be addressed with your purchasing agent and the mill. Inspection upon receipt of material needs to be made a high priority. Are you ordering a lower grade lumber/from a lower quality mill to try and keep costs down? If this is the case, your purchasing strategies need to be addressed. More often than not, we get what we pay for.”
“Fully agree with the quality of lumber being less than what it has been in the past. We build crates and pallets for industrial use which helps getting rid of some of the crooks.”
“We reduce the price and get what we can out of the dunnage and let the mill know our dissatisfaction, and also put that mill on our ‘No List’ If they are not willing to help. It is a huge problem that needs to be corrected.”
“Find other mills/vendors who are smaller and are able to put time and energy into a better finished product.”
“Develop relationships with mills you can count on to provide the quality you expect. If it’s bad, send it back.”
“I agree with the statement that the quality of lumber has decreased over the past year. One thing that we have done to combat the issue is when we get the return lumber back that is all twisted or bowed, we give the customer the full credit and then we cut what we can out of the lumber and use for our utility sheds, wood stakes, or other pre-built items that we build here at the yard.”
“We check all lumber as it comes into the yard. If it looks bad, we refuse the unit. I believe part of the problem is moisture in the lumber. We have been unwrapping units to let them dry out before cutting the band. This seems to help reduce twists and warping.”
“Refuse to buy from mills who pull the ‘select’ from the #2 and then sell the select to HD and Lowes and sell us the lower end of the #2 grade.”
“Pay more for better materials and give the customer a choice.”
“Inspect material upon receipt and back-charge the mill if any material is found to not be acceptable.”
“Unfortunately, the market is dictating this. The demand is so great that there is not much that can be done. We have tried different vendors and no solution seems to be found. Our unsellable lumber has increased by 100%, and that’s when it is delivered to our yard. We only stock a #1 material and it is stamped such.”
“I think we are all in the same boat. If it is exceptionally bad, I do try to get credit from my supplier. Some that we do not get credit on we will place in a discount bin for 30% off to try to at least get our cost out of it.”
“I’m that dealer. What are we supposed to do? We need to join forces and become a more powerful buying group. Strength in numbers, that’s the only way!”
“Deal with a premium mill, then be prepared to pay for it.”
“Demand pre-delivery quality assurance and reject deliveries that are obviously below standard. Videotape belowstandard bundles as they are opened. ‘Chronicle the crap,’ as we say.”
“We make grade stakes from our cull lumber.”
“If dealers were smart, we would add to the price for dunnage factor which we are doing. What is the sense to fool yourself that the margin is correct when you know it is not. Oil is up and down 100% at times and the world moves on, no matter.”
“If your lumber producer continually supplies inferior product, it’s time to find a new vendor. Once or even twice, is forgivable. However, if the fine quality you once received is now non-existent, it’s time to ‘cut bait and fish!’ Find a new supplier at once.”
“If it’s from the same mills and same grade as he has had in the past, it’s a problem. Is it fresh stock or eight months old? How is it stored and taken care of at the yard? More factors come into play here than just having bad lumber from a mill. We switched to a better grade on our 2×4 and 2×6 lineal 3-4 years ago, and the quality has been consistent to what we want and expect. We also buy consistently from the same sources and always ask for mill names before we buy. If the problem is more than a couple of partial units, I would lean on the supplier for a resolution.”
“The quality of materials runs in spurts. Some mills use a better grading procedure.”
“You can go back to mills for credit. Take copious pics upon arrival of lumber, including side, end and top shots. Show the mill stamp. Take pics of competing mill stock. If you have clear criteria of what makes premium, you have recourse. Twist and bend have limits per grade. My suspicion is that the twist and bend relate to too much time spent on rail somewhere in process, and that is not strictly a mill problem.”
“We are on the East Coast and we partnered with a local lumber broker and brought in about 10 SKU’s of premium high line western SPF. Sales have been just okay, but we now have an option to offer our customers if they can no longer handle some of the poorer quality we are seeing. Look for the trend to continue.”
“Pre-communicate quality expectations.”
“1) Have a conversation with the mill. You are partners after all—they do have skin in the game. 2) Find a new source. 3) Carry a line of LSL studs.”
“Turn your stock faster. Cover your storage area. Talk the customer into engineered stock.”
“We inspect and reject material as it comes in. We are not afraid to return whole or partial bundles due to poor grade or damage in shipping.”
“Good question! Regularly culling stacks to keep the ‘bones’ out and bundling up and selling cull units is a way to get a small portion back. Working with builders as to when lesser quality lumber is acceptable and high-grading when they need it.”
“We have built our business by being known for high quality product at reasonable prices (good value). We have had to align ourselves with several mills and commit to a partnership to ensure supply. Bad material should be refused and never stocked. Management is remiss if allowing product to go bad. Very difficult combination of qualityturns- margin.”
“At our yard, we take the dunnage and reman it. As an example, we split the 2×6 into 1×6, re-saw one face and our customers buy it for trim. We cut back our lengths when the ends are split and sell what we can. We make large pallets of firewood to sell. We also have a customer who will buy the dunnage at a lower sell price, but at least it is not a total loss.”
“We have purchased better grades of lumber to have less fall down/waste. The flipside is that the price is higher. It’s impossible to have both good material and an inexpensive price. Got to choose your path. We’ve invested in ‘curtains’ to sun shield our lumber bins from the summer heat/sun as well. Bought track and a used soft-side curtain from a semi-truck, it works good.”
“I stock high-line lumber and have had great success with it. It’s one of the reasons why our customers would much rather buy from us, rather than our competitors. Our customer like the fact that they can pretty much grab and run, don’t have to pick through junk lumber. We typically buy by the car-load which keeps us pretty competitive, compared to most competitors who buy out of a warehouse somewhere.”
“Contract with the mills you like. Not all purchases need to be contracted, we do about 25% of our annual needs, especially studs.”
“There is a wide range of product within the grades of lumber. You can buy from mills at the top of the grade or mills at the bottom. There is a slight price difference but the reduction in callbacks is worth the extra price.”
“If you can’t find mills to get you the lumber quality you expect, then you are forced to increase margins to cover dunnage costs. More concerning is the perception of the customer. You must educate them on lumber expectations, if dunnage is a ‘fact of life,’ customers need to be aware.”
