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Don’t Forget! You Saw it in the
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April 2021 #13261 Page #112
Lumber Briefs By Matt Layman Publisher, Layman’s Lumber Guide
The
P
Mess Is Getting Messier As Is the Message
anels are the quandary, rather resins and glue. Widespread announcements of further supply disruptions and declarations of Force Majeure are crippling OSB flooring, siding, and roofing panels. I must step in right here to call B.S.
Force majeure is a common clause in contracts which essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as war, strike, riot, crime, epidemic, sudden legal changes, or an event described by the legal term “act of God,” prevents one or both parties from fulfilling their obligations under the contract. In practice, most force majeure clauses do not excuse a party’s non-performance entirely, but only suspend it for the duration of the force majeure. I fail to see the reason for invoking force majeure. Supply shortage of a manufactured material at a time when demand is superficially and artificially high, and consumers are hoarding the product, does not, in Layman’s terms, qualify as an act of God or any of the other causes for relief from obligations. Rather, it appears to be a manipulative strategy by one industry, plastics, to disrupt housing, a critical element of the global economy. Force majeure does not nullify previous agreements, it just suspends obligation to perform for a short period of time. Even if the force majeure stands up legally, the implications are only short term and will be remedied by price gouging. In the case of OSB, the manufactured resin shortage is driving that product’s price to unmarketable prices, but more importantly for the larger lumber industry, it will, and is already, creating a bottle neck in the flow of lumber from dealers to jobsites. It is counter productive to the overall housing industry. Therein lies the problem. Lumber producers are just now exiting winter shipment congestion. Rail cars and trucks that have been running 2–3 weeks late are now on time and recipients are in no hurry to get those shipments because current inventories are not moving out as expected. We have heard it for weeks now, “If I don’t have the floors and walls and roof panels, I don’t want the lumber sitting around to get nasty and/or stolen.” So what we have is a strong housing backlog that is stuck.
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