Hard to Stay Loyal

A Hard Time to Stay Loyal

A recent conversation one of my crew had with a Bowens customer of over fifty years, illustrates just how difficult things have become in these bizarre times. Referring to a feeling of powerlessness around the availability of pine framing, he said, “I am being penalised for putting all of my eggs in Bowens’ basket. I have no other options.” He wasn’t angry, he felt let down, broken. He has been unflinchingly loyal to our Hastings store since it opened in 1970; Jeff Harvey believes he was buying from us even before then. We are not fulfilling our responsibilities in the partnership, as we are unable to consistently deliver what he needs on the day it is required. I hate knowing we are not hitting the standards I am forever telling our team are ‘The Basics’. I am also very aware the experience I have outlined is only one example, there are many others who find themselves in a similar situation.

The Current Reality Isn’t Fair on Builders

It is not fair on timber merchants, truss plants or timber mills and it is significantly impacting the emotional wellbeing of those at the coalface, as well as anyone involved in managing the fallout. The Bowens team is struggling with the endless requests for more satisfactory answers, the unavoidable inefficiencies large inventory holes create, having to ration scarce supply and the feeling they are letting down those who have put faith in them to fulfil the simple task of getting product to site.

“We stopped selling our pine and LVL to ‘new customers’ before Christmas, each week since February we have introduced revised measures to protect our inventory for ALL of our loyal relationships, as best we can.”

They are also being required to defend against rumours and outrageous allegations. We have been accused of holding back stock as we wait for rates to lift. Of prioritising volume builders over our loyal ‘smaller’ accounts and price gouging. None of it could be further from the truth. Over the past three months there have often been Bowens stores with less than three full packs of MGP10 in stock; we require hundreds. We stopped selling our pine and LVL to ‘new customers’ before Christmas, each week since February we have introduced revised measures to protect our inventory for ALL of our loyal relationships, as best we can. Our largest accounts are not getting any more than they did a year back, while our ‘smaller’ builders, as a cohort, have grown their allocation. Everything we receive is immediately assigned to waiting orders.

An Early Morning Call

To illustrate the reality of this last point, in one of the lighter moments I have experienced in recent months, I had an early morning call from one of our competitors in mid-June. While we speak a couple of times each year, it had been a while and when I saw his name on my phone I thought, “this will be good, I’d like to know how he is coping.” Instead of a warm ‘hello’, I received a blast. “You bastard! You’ve stolen my load!” (expletives deleted).

As confused as I was initially, it was soon revealed a supplier had unintentionally delivered a semi-trailer of 90mm framing to one of the Bowens yards, rather than my telephone friend’s store down the road. While my team checked-off the timber against the paperwork, they had conveniently missed noting the site address was not ours. It was the 2021 version of striking gold. I had great joy in listening to the extreme agitation of my rambling comrade. In the four working hours since the delivery had been received, we had broken it up and every stick had been sent to various building sites. Magnificent! Karma will hurt when it comes.

To acknowledge we are taking delight in the arrival of pine deliveries is a (sad) sign of the times. In overall terms we are receiving as much as we did a year ago, even if it isn’t exactly what we want, nor is it arriving when required. As is the case with our customers, we are taking what we can get and making it work.

Everyone wants to know – when will it all end?

It is a fair question. Timber framing is only one element of the building process in which more than a hundred trades and material suppliers are called upon. I know I am interrogated on this matter multiple times a day; our sales team, hundreds of times a week.

So, again, when will this nonsense end? My position hasn’t altered for some time now and, annoyingly, my response begins with a question of my own.

“You tell me when housing starts are going to drop from their record-breaking highs, both in Australia and around the world, and I will tell you when the industry will have enough timber to go around.”

I am aware, mine is an irritating point of view.

The problem is on the demand side. Detached housing starts in Australia are at record levels, our renovation market is strong and forecasts suggest there is a healthy pipeline ahead due to the combination of excellent lending conditions, increased household savings, government inducements, strong employment numbers, as well as house price growth. And, unlike previous peaks, every market in Australia and nearly all markets around the world are simultaneously experiencing the same, robust conditions. Governments across the globe have stimulated their economies with various incentives to encourage construction, more people are staying at home, less people are eating out, travel has been reduced, interest rates remain at record lows … Victoria, California, the East Coast of Canada, Stockholm – the same responses to COVID-19 have produced, more or less, the same outcomes.

It is my understanding Australia is distributing larger quantities of solid timber framing (marginally) than it has for the past two years. As I have pointed out already, what we receive is most often not the grade, size or length we would prefer, however the overall cubic metre volume is more than sufficient for ‘normal’ times. In any other year timber mills in Australia and Europe have weeks if not months of production on the ground, ready to transport. As I write to you in June, their stocks are at zero. The mills are planing, grading and sending, all within a few days; far from ideal.

In 2018, when housing demand was high, the European and U.S. markets were relatively soft, ensuring their excess timber production became available. Fast forward to 2021: not only are we scrapping for the available crumbs, we are dealing with restrictions in world shipping, 2020 bush fires, pandemic related global manufacturing slowdowns, pine beetles in Canada, a reduced number of U.S. timber mills since the GFC … the list goes on. The net result? Production is not able to keep pace.

To Our Loyal Customers

To Bowens’ extremely loyal, very long-term customer and to those of a similar ilk who are experiencing disappointment with our performance, I am confident we are the right business to be associated with. We were able to protect the majority of our customers from much of the pain for longer than most. Whether a customer builds a thousand houses a year, or just the one, and has been buying framing from us over an extended period, we are moving heaven and earth to ensure supply continues. Remember, we continue to receive strong volumes, just not enough for the growth the market has taken on. We will do our absolute best to ensure we get it right – hopefully sooner rather than later.