32 American Journal of Transportation American Journal of Transportation ajot.com SUCCESS STARTS WITH A WINNING TEAM! FOR MORE INFORMATION CONTACT US AT: JH STEVEDORING, INC. 2147 South Columbus Blvd. Philadelphia, PA 19148 TEL: 215-218-3060 FAX: 215-218-3078 WEB: www.jhstevedoring.com PENN WAREHOUSING & DISTRIBUTION, INC. 2147 South Columbus Blvd. Philadelphia, PA 19148 TEL: 215-218-3000 FAX: 215-218-3043 WEB: www.pennwarehousing.com Since our establishment in 1920, we have been providing our global customers a premier level of service through superior handling and performance, technological advancements, and a perpetual eye on customer satisfaction. Also, we offer one of the most cost effective and reliable labor forces in the North Atlantic. We have the ability to accommodate a variety of automobile, breakbulk, bulk, container and forest products. Our distinction, is based on our ability to closely coordinate your Stevedoring, Warehousing and Distribution Logistics. WE OFFER OUR CUSTOMERS: • On-site Storage and Multi-modal Distribution Services • Customer Access to 24 hour Inventory Tracking • Standard Berths and Ro-Ro Ramps are available • Specially engineered Lifting Gear • Container Transloading from / to Rail or Truck • On-site service provided by 2 Class I Rail Carriers • Efficient Distribution to Two Thirds of the United States and Canadian populations within 48 - 72 Hours C E L E B R A T I N G O F S E R V I C E 192 0-2 020 Hammer and nail – The ups and downs of the US lumber market By George Lauriat, AJOT Hammer and Nail It’s as easy to understand as a hammer hitting a nail. Lumber con- sumption in the United States is driven by the construction industry — specifically home building. The US annually produces 35 billion board feet and consumes around 50-60 bil- lion board feet of lumber and 60%- 75% of the total goes into residential construction. Homebuilding is lumber intense. It takes around 14,000-16,000 board feet to frame a 2,000 sq/ft home and another 6,000-11,000 board feet of wood product to sheath and floor the structure. All this adds up to a simple fact that housing demand (and hous- ing starts) fuel the lumber demand and push prices upward. And conversely when housing starts fall, lumber prices tend to lower…most of the time. Bill Owens, chairman of the National Association of Home Build- ers (NAHB) and homebuilder himself, said in August, “New home sales fell in July to their slowest pace since the start of the year as ‘affordability’ challenges limited home buyer traffic.” Owens’s views are backed up by data from the US Department of Housing and Urban Development and the US Census Bureau which indicate sales of newly built single-family homes declined 10.5% in July and new home sales are running 6.3% lower than last year while ‘home improvements’ spending has declined 10.2% year-over-year. Mortgage rates surged in June as the Iranian war and inflation pushed Treasury Bonds yields up, and in turn lifted mortgage rates (mortgage rates are influenced by the bond market). With mortgage rates now averaging around 6.7%, and living in an uncer- tain economic environment, potential home buyers were reluctant to make major long-term investments. Many analysts feel mortgage rates are tem- porarily high due to the Iran war and should ease when the geopolitical situation stabilizes. Still, few econ- omists feel that they will fall below 5% in the near future. And the ques- tion of ‘affordability’ is underscored when buyers roughly need $120,000 in income to afford a median priced home while the current US median income is only $85,000. What that means for US lumber and forest product demand now and in the future is, as they say, “complicated”. A Complicated Outlook for Housing Understanding the demand fore- cast for US lumber and forest prod- ucts is complicated by both domestic economic policies and geo-political forces that are tugging away at the industry from all directions. And in the US, the primary eco- nomic “complication” is nagging and persistent inflation. The Federal Reserve Bank officially targeted 2% as the goal to stay under. However, infla- tion has been running at over 2% for 65 months (the last year under 2% was the COVID year of 2020 at 1.4%) and currently is running nearly twice that target number. Still, as Kevin Warsh, the Trump Administration’s newly appointed Chair of the Federal Reserve Bank of the US said in the keynote address at the Jackson Hole Economic Symposium on August 28, 2026, “The Fed’s price-stability objective of two percent, as measured by the Personal Consumption Expenditures (PCE) price index, is a firm, fixed target.” The PCE index is favored by the Federal Open Market Committee (FOMC) over the Consumer Price Index (CPI) as a measuring stick for inflation, as it considers consumer substitution on goods and services when they become too costly and fac- tors in all consumer-related spending not just spending by the consumer itself. And at the moment the PCE is running ahead of the CPI, putting the FOMC on a track to have to make a difficult decision. With inflation still unchecked the (MARKET – continued on page 34) Wood pulp import shipments are on the rise at SeaPort Manatee.
View this content as a flipbook by clicking here.