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early in 2003 and are currently awaiting an additional group of centerbeam cars in late fall or early winter of 2004. We have acquired an additional 36,000 sq. ft. of warehouse space in Salem to prepare for an additional book of business we should realize by year's end. We are in the process of acquiring 50 additional 52-ft. highcube box cars to supplement our current 49 60-ft. high-cube box cars."

He expects the trend to continue until at least late fall 2005. Martin forecast temporary periods of relief, such as in late August and earlY September, if the western carriers get more aggressive in hiring and training replacement personnel.

II'IGH lumber and plywood prices lland, even more so, the tight availability of rail cars have translated into markedly higher business for reloads, especially in the West.

According to a survey of 17 transloaders. while business was up and down across the country, every western transloader but one reported an increase in business.

"Requests for transloads are above average for this time of year. Actual transactions are below average," explained Dan Ewers, Inland Empire Distribution Systems, Spokane, Wa. He blamed the lack of availability of rail equipment-both UP and BNSF.

"I expect the transload business to continue-if not grow-at the current pace for at least the following year," said Ewers. "Unless interest rates take a huge leap in points, developers will continue to build for the demand, and shippers will continue to seek ways to get their products to market."

Current volumes are up about 87o at Cascade Warehouse, Salem, Or. "The difference is the car supply has been severely crippled by the lack of the Union Pacific's ability to react to labor shortages due to mass retirements and slow hiring practices," said Greg Martin.

The company had been ready for a sudden surge before it first hit last fall and took matters into its own handsexpanding its operations and staffs at all three of its Pacific Northwest facilities-Salem, Junction City, Or., and Chehalis, Wa.

"We knew early in 2003 that the two western carriers were ill-prepared for the surges," Martin noted. "We acquired an additional 60 centerbeams

"In the lumber industry, we tend to look at the transportation side of the business with blinders on," he explained. "We don't realize that the rail and truck industries have surges we never experience. excePt in default. There will be a rail and truck surge in late August through earlY October for the grain harvest. The intermodal business begins experiencing a major surge in early September for Christmas goods, and the truckers are hitin late October by the Christmas tree market. Car suPPlY shortages are a direct result of congested lanes of traffic."

As examples, Martin pointed to "the I-5 corridor, with two western carriers trying desperately to move traffic over the Tehachapi Mountains into Southern California from Stockton to Mojave. And with Canadian wood gaining ground in the Phoenix market, it has spelled melt down as well."

He labels the outlook "grim, but as the western carriers gain some ground hiring new personnel, the situation will get better. With so many people retiring from the railroads and trucking companies, not only have the car- riers nationwide lost rvarm bodies. but they have lost at least 30 years of experience with each retiree. Dig in your heels, adjust your buying patterns, and brace yourself for a long, tough battle of inventory shorts, and long transit times. truck and rail."

Rail service has slor.ved things down at Montrose Reload, Montrose, Co. "The UP only comes in once a r.veek," explained Larry Hamacher.

Montrose Reload's trucking business, on the other hand, "is smoking," he said. "It's partly the high fuel prices-they've caused a number of companies to go under. There are not as many trucks as there used to be."

Chris Salek, Reload, Inc., Glendale. Az., said, "For the last several years our reloads have trended up and this year may be larger than normal increases." He attributes the "sisnificantly heavier" demand to rail iJsues, long haul trucking issues, his company's reputation and service, and the maturation of the transload industry leading to its greater acceptance by customers.

"We have shor,vn grorvth every year fbr years, and lvith grorvth comes reinvestment into staffing and equipment as needed." Salek noted. "We are very optimistic that this growth pattern is sustainable for at least the next several years. It seems all major markets are growing very rapidly."

Long Beach, Ca.-based Chozen Trucking's reload business is up. thanks to increasing volume from existing customers as r.vell as the addition of new customers. "We should continue at this this level into next year," said Joe Escobedo.

Volume at Fremont Forest Grouo Corp.. Whittier. Ca.. is up 50ol over a year ago. Contributing factors include lower inventories on hand. rail car shortages, new trucking regulations on hours, and an increase in water cargo.

"We have increased equipment by 20o/o and staffing by 30Vc to handle more volume of containers and r,vaterbound cargo," said R. Lynn Forsberg. "We expect the trend to continue for another 18 months, with permanent changes in rail service."

Business has also been increasing at Shasta Cascade Forest Industries. Redding, Ca. Walt Schneider attributes the growth to a "strong market, the prime rate, the season and high fuel rates for trucks." The company recently added some personnel and equipment.

Conrad Forest Products began pressure treating in Arbuckle, Ca., a year ago, but has been utilizing the facility as a reload for three years. For the first half of 2004. the reload business is about 45o/o ahead oflast year.

Conrad sees several factors at play. "We have a much more diverse inventory," Don Bratcher said. "Our customer base has grown. The single largest factor is the market demand for just-in-time deliveries. With our ability to provide next day delivery on truckloads or LTL orders. demand for our services and products has increased."

The company has increased stafTing only slightly, as it discovers ways to streamline operations and get more production from its systems and manpower. Nonetheless, it has added a couple of material handling pieces to keep up with the increased flow of material.

"We expect this high demand to keep up through the end of the year," Bratcher predicted. "But like everyone else in this industry, we have no idea rvhere inlerest rates are going to level out at and what end effect they rvill have on the home buver that drives this market."