RR Car Shortage Easing

By Thomas J. Lamphier President Transportation div. Burlington Northern

T HE lumber I and building materials industry has always been an important t ran s portati on market for Burlington Northern. We know the lumber and plywood production business because we are involved in it ourselves. And because BN's 25,000mile track network stretches from the Pacific Northwest to the nation's heartland and on to the Gulf of Mexico, we are strategically located to be a major carrier of forest products. They are our third largest rail transportation commodity.

The market was so active in 1978 that we had difficulty providing enough freight cars to meet the demands of lumber shippers.

ln 1979 we foresee the lumber car shortage easing for two reasons: First, the market, while remaining strong, will slacken a bit; secondly, we have arranged to add 300 new bulkhead flatcars, which should become available in the third quarter.

Our estimates and information

Story at a Glance

Greater d-i-y indulgence by a more detailed consumer will greatly increase the retail hardware and home center profit structure since basic compliance will be in the plumbing, electrical, and paint department area.

There will be a notable slowdown in new retail hardware stores of 5,000 to 10,000 sq. ft. However, a marked increase in home centers of the 12 to 15.000 sq. ft. size will be noted as more retail lumber operations follow the trend into complete home centers, concentrating on captivating the established d-i-y market.

Increase in such sales floor space will put another tax on distributor ability to deliver good "in" strength with outage resulting in the l9-2lolo area.

In spite of such problems this industry will experience an anticipated l7olo increase in volume and gross sales in spite of an already abundant 1978. Return on investment will remain good even in the current disturbed money market.

In total and conclusion-another bumper year for the industry.

from other sources indicate housing starts in 1979 will be in the range of 1.7 million to 1.8 million. This is down from the 1.9 million estimated for 1978. A drop in single-family housing starts, affected most by the shortage of mortgage money, is exPected to account mainly for the decline.

The factors of increased home prices, higher interest rates and tighter mortgage money should have a converse effect upon the remodeling market. The demand for lumber, plywood and other building materials necessary for remodeling projects is estimated to increase by approximately two percent next year.

Because of the predicted decline in single-family housing starts, overall U.S. consumption of softwood in 1979 is expected to decline by about three percent. However, construction of single-family housing in the growing urban areas of the Sunbelt and Westem states in the past few years has been strong, and the market is expected to remain so in 1979.

Denver, Seattle, Dallas-Fort Wo(h and Houston are among the areas where building activity is (Please turn to page 105)

I I NTIL fairly recently, building tU supply dealers have not positioned particleboard as a product for the do-it-yourself market.

It has been primarily sold to builders, contractors. remodelers. and commercial-type customers. But the d-i-y person has been get- ting interested in using partic- leboard in his projects.

A study just completed by the National Particleboard Association shows that the dealers who are not pushing particleboard sales are missing out on a large share of the market. It has become accepted by the diy-er wherever it has been used and some of the hesitancies of .the dealer about the div-ers' abilities to use particleboard have been washed away. Of particular importance is its acceptability as a shelving material and as a "handy panel" item.

Price of course, always plays a part but more to the point is that the d-i-y person is satisfied with the product and is coming back for more. And some smart dealers are recognizing this by putting more particleboard up front, on the