Silver Linings: Finding the Good in the Southern Pine Design Value Changes

Article Author(s): 
Sean D. Shields

Forest and lumber grade stamp“In the almost five decades I have been in the component manufacturing business, I have never had a lumber mill ask me what I thought they should produce,” said Bob Ward (Southern Components). “They didn’t care what I needed; instead, I had to choose from what they provided.”

While frustrating for component manufacturers like Ward, and less than optimal for both sides, the top-down model of lumber suppliers dictating the lumber properties they sell and essentially telling their customers, “if you do not buy what we produce, we’ll sell it to someone else,” has been standard operating procedure throughout the years. However, when the Southern Pine Inspection Bureau (SPIB), the entity responsible for governing the grades and design values associated with Southern Pine (SP) lumber produced in the U.S., recommended an immediate and drastic 25-30 percent reduction in SP design values, it was clear this approach was going to be heavily scrutinized because the economic consequences of this unilateral decision placed so many customers in jeopardy.

To fully appreciate the impact a change in approach (from top-down to something different and maybe even more collaborative) has on the component manufacturing industry, let’s look at how the industry responded to this crisis, how the lumber producers responded, and finally, how things may go in the future because of how everything was handled.

Building a Coalition

SBCA President Steve Stroder echoed Bob Ward’s comments in his December 2011 Editor’s Message in SBC Magazine saying, “I think most component manufacturers would agree with the following statement: The structural building component industry has been the lumber industry’s greatest, yet most ignored, asset for the last 30 years.” Given that context, it was disheartening, yet not surprising, that the component industry learned of SPIB’s design value reduction recommendation on September 21, 2011. Fortunately, as Stroder pointed out in his message, “SBCA immediately sprang into action, contacting ALSC to determine the facts and what the next steps were from ALSC’s perspective. Once it was clear what SPIB intended to do, SBCA shared its concerns over the proposed reduction in design values.”

On October 20, 2011, the American Lumber Standards Committee (ALSC) Board of Review held its first meeting to discuss SPIB’s proposed changes to SP lumber design values. Leading up to that meeting, SBCA organized a series of conversations with its Lumber Task Group and found two lumber mills that were strongly aligned with SBCA’s concerns. By the time the ALSC meeting was held, SBCA had successfully gathered a strong coalition made up of representatives from the components industry, National Association of Homebuilders (NAHB), NAHB’s Building System Council, the Leading Builders of America, Associated Builders and Contractors (ABC), Truss Plate Institute (TPI) and National Lumber & Building Material Dealers Association (NLBMDA), and these groups provided largely united testimony. In representing many of the parties likely to be impacted by changes to SP Lumber design values, they discussed the potential ramifications of the proposed changes.

In brief, these organizations argued there were many potential unintended economic impacts, including: possible stoppage and delays to thousands of single-family, multi-family and commercial construction projects; a significant reduction in lumber inventory economic value overnight for all downstream users; and, a sudden lack of supply of SP lumber with sufficient design properties to meet the growing construction demand. In addition, these impacts could affect the employment of hundreds of thousands of construction workers and those companies who supply site construction.

Southern Pine Design Value Forum

Due to the overwhelming participation and input by downstream users, ALSC announced it would delay ruling on the SPIB recommended SP design value changes in order to hold an additional hearing approximately 60 days after their October 20 meeting. According to the ALSC, the delay was, “to allow all interested parties to have an opportunity to review the data presented by SPIB and comment in person on the technical aspects of the SPIB submission.”

This reprieve allowed SBCA, along with the larger coalition of downstream users, to join with the Southern Forest Products Association (SFPA) (an organization responsible for marketing the use of SP), Southern Pine producers, and Mississippi State University (MSU, which had also done extensive SP testing of its own) to hold the Southern Pine Design Value Forum. The key objective of this two-day meeting was to allow the 54 participants, representing many of the affected parties, an opportunity to share their points of view and work on recommendations to present to the ALSC before their next hearing.

The collective knowledge of this group was summarized in a document, Southern Pine Design Value Forum Findings and Recommendations

First, the report reviewed the data collected from the three sets of recent testing conducted on SP and provided perspectives on the strengths and weaknesses of various test methodology. MSU conducted testing and discussed how pulling out pieces with pith and/or three rings or less per inch could increase the resulting design value. MSU also examined changes in sawmilling technology over the last 20 years and the ability to cut narrow dimension lumber from much smaller logs. It pointed out this change casts doubt on the extrapolation to other grades and depths as well as on the size model used to conduct the extrapolation.

SBCA had conducted testing on behalf of a group of component manufacturers. It suggested optimal alternatives that could include standard visually graded lumber (e.g., use SPIB’s proposed design values), enhanced visually graded lumber (e.g., retain SPIB’s current design values) and mechanically graded lumber. SBCA stated that the suboptimal approach would be to implement SPIB’s proposed design values without providing the market with the means to retain the current design values for visually graded SP lumber.

Further, SBCA explained that downstream users, like component manufacturers, need the current design values. In addition, test data confirmed higher design values were still available for a significant portion of the lumber population. Finally, SBCA stressed that an orderly timeline and transition period is needed whenever design values are changed.

The report also outlined the concerns of builders and other lumber consumers. The Leading Builders of America (LBA, which represents the top 20-25 largest builders with thousands of homes in process at any given time) summarized potential costs due to business interruption when standard plans have to be changed, as well as additional costs due to price increases and potential conflicts for homes in process.

Builders argued the design value adoption process should be predictable, transparent and inclusive, and recommended mirroring the federal rule-making process that allows for 60- to 90-day periods between key milestones such as submission and approval of sampling and testing plans, submission and comment period for proposed design values, and approval and implementation of design values. Finally, the group provided a roadmap for ALSC and SPIB to effectively abandon an immediate reduction in SP lumber design values and implement a more reasonable timeline. These recommendations had a significant impact because, when ALSC eventually handed down its ruling, it limited the scope of the design value changes and included a future effective day.

On January 11, ALSC announced it had approved the SPIB’s proposed design value change for the No. 2 2x4 grade of SP only, with a recommended effective date of June 1, 2012, which allows for orderly implementation. In reaching this decision, ALSC did not approve a change in design values for other sizes and grades as recommended by SPIB. ALSC further urged SPIB to, “proceed with all deliberate haste to complete [additional] testing and analysis at the earliest opportunity.” This ruling represented a significant victory for the coalition of downstream users in that it gave the market time to react and adjust.

Timber Products Inspection

While the coalition forged lines of communication with lumber producers during the Forum discussions and subsequent creation of the Forum’s recommendations to ALSC, another interesting development occurred. Timber Products Inspection, a third-party quality control inspection bureau for lumber mills, created an innovative lumber grading approach.

This approach is intended to maintain current/“close to current” SP design values using traditional Quality Assurance procedures that are lumber mill production specific. As a consequence, it provides lumber mills the opportunity to fill the void for projects that are in process (e.g., long duration multi-family projects, etc.) using #2 SP by rehabilitating the 2x4 #2 SP design value that will be reduced in value from 1500 Fb 1.6E to 1050 Fb 1.4E beginning June 1, 2012.

These procedures allow a lumber manufacturer to establish higher Fb and E values for its finished product as compared to the National Design Standard (NDS) Supplement. Essentially, Timber Products argued that it is possible for a mill to audit their visually graded production through their recommended procedures and be able to label it accordingly if the altered approach proves it to be superior.

This is just one example of how, suddenly, lumber producers could proactively respond and provide product with the design values their customers needed. To find mills that use Timber Products Inspection for their lumber grading QC, use the “Product Locator” on their website.

Responsive Lumber Producers

Throughout this process, there were a number of lumber mills that publicly supported the structural components industry’s position regarding the SP lumber design value change issue, and exhibited a willingness to work with their customers to find positive solutions that serve everyone’s best interest. SBCA has compiled a list of those mills.

Even further, there are mills (also listed on the web page) now working hard to provide “Regular Southern Pine Design Value” lumber (i.e., #2 at 1500 Fb, #1 at 1850 Fb, etc.). These mills have recognized that design values are critical to engineers, truss manufacturers, builders, contractors, and other end-users/consumers from an accurate building design perspective. In providing this list to component manufacturers, SBCA hopes to, “foster even better communication between the lumber buy side and lumber mills that desire to know more about the needs of their customers.”

Looking to the Future

Through the SP design value change process, it became clear to many of those involved that both industries would be much stronger if they collaborated. This was evident through the number of lumber mills that expressed an interest in listening to customer needs and doing their best to fill those needs creatively.

Scott, Bob Ward’s son, will serve as the next President of SBCA, and was heavily involved throughout the entire process. “It has been valuable to have the opportunity to meet with various lumber producers and discuss the impact changes to lumber design values has on our industry,” said Scott Ward (Southern Components). “It is already evident this two-way conversation is benefiting both sides immensely.”

Only time will tell exactly how these new lines of communication will be used to benefit both lumber producers and users, but Scott said one thing is already clear: “We’re talking, and they’re listening and responding to our needs. That hasn’t happened much in the past.”

For more information on what component manufacturers need to know about SP lumber design value changes, as well as recommendation on how they should prepare for the June 1 effective date, visit SBCA's Lumber Information page. In addition, all the latest news will be available on the SBC Magazine website.