Initial Reception Has Been Great, Some Are Still Wrapping Their Arms Around the Program

As distributors strive to get lumber to their customers in the most profitable and efficient manner, many are providing value-added services like planing and straight-line ripping. Many distributors have the equipment to do this in-house, while others outsource it to customers or service providers. We have decided to add a mill-direct option that offers efficiency, freight savings, and flexibility on tally.

For Cascade, a C-Pack is a single unit of lumber where we divide 15/16” into three 13-layer units, 13/16” into three 15-layer units, each strapped separately, then banded together. When we tally these units, we are tallying them net after ripping and surfacing, where Cascade is absorbing the rip loss in the price. In some markets around North America, distributors sell straight-line ripped lumber according to the original pre-ripped footage. C-Packs allow for this, as on receipt, the package can be measured for volume, and 10% (or what is normal in a market) can be added to the footage to return the unit to the original pre-ripped footage. In other markets, lumber is sold net tally after ripping, so the C-Pack can be received with the net footage measured for the package. Regardless, the distributor has packs ready for the customer, where they are not counting out the volume for each order. If a customer wants 350bf, the opportunity to take a pack right off the shelf and upselling their volume is there. In summary, C-Packs offer the following advantages:

Many distributors do not realize how much it costs them to unload a truck from us, reload packs to deliver to a service provider, deliver them to the provider while a driver waits on unloading, go back to wait reload, return to the warehouse, unload, store, stage, and reship a package. There is also the lost opportunity cost in what else the truck could be delivering. With C-Packs, you simply put your tag on the received pack using the tally method that works in your market, and you have a pack ready to ship.

In Superior, the tally method makes a huge difference when comparing apples to apples. If we charge $3850 for 4/4 SUP SLR1E and S2S to 13/16” on a $100 freight haul, this is the same price as if the lumber was sold on a pre-ripped tally using a 10% rip loss costing $3500.

Freight savings on buying surfaced and straight-lined lumber can be substantial. If you ship the same weight of Alder, more than 23% in volume can go on a truck than if not ripped and 15/16”. If it is a $4000 haul the freight savings on the added volume is $920, and if that $920 is amortized across the new volume, the savings can be $40-50 per mbf, or looked at another way, the freight savings cover 25-30% of the cost to surface and straight-line rip the lumber.

There are hidden costs in distribution, including footage loss, banding, labor to pull an order, dunnage, forklift wear and tear, etc., that need to be factored into the decision to buy an offering like C-Packs.

We think that over the next few years, value-added offerings like this will become the norm for many distributors. If you would like to see for yourself, please contact your Cascade sales representative.