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Exporting Lumber? Anybody done it??

Started by Percy, November 11, 2003, 08:55:06 PM

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Percy

Here in Terrace, a group of six small mills,of which I am one, have the opportunity to sell some Western Red Cedar overseas. We have devised a system(color coded end sealing) where as everyone is responsible for their own quality control, yet a truck load can be produced in a realitivly short time. My question is...Has anyone here ever exported lumber to a foreign country?? If so, what is the accepted payment terms?? I have spoken with several people who have said "Dont let the lumber leave the country without full payment" while others have  said " to devlope  overseas clients/relationships you will have to take a risk".  International bill collecting is not my forte' ;D and dont wanna get burned along with my compadres yet this could be  a good thing. The current plan  is to pay for an estimated 50 % the day the truck leaves my mill yard and the other 50% about a week after it arrives in the buyers country(anywhere from 5 -8 weeks after the lumber leaves my yard). Sounds kinda scary to me but inviting nonthe less.....opinions gladly accepted :P :P
GOLDEN RULE : The guy with the gold, makes the rules.

MP_Wall

Just from my experience, when it hits the boat it should be paid for. If you have to, use letters of credit from the buyer stipulating that payment is to recieved before/as the lumber is loaded on the freighter. Once on the ocean things get much stickier and harder to collect against. You basically only want to deilver to the port of embarkation and the customer is responsible from there on out. That way you control the product in the states and they control it on the ocean and are responsible for insurance, freight, import duties and inspection upon arrival etc. Good luck with your venture if you decide to do it.

MP Wall

Ron Wenrich

A number of years ago, I went to a seminar on exporting.  I've probably forgot more than I remembered.  One point that was driven home is you need a middle man.  I believe it is more along the lines of a banker.  He can help guarantee that you will get paid.  That seemed to be the biggest problem.

Payment should happen before it hits the boat.  Even with the credit line, sometimes things go sour.  Destination also seems to be something to watch.  At that time, western Europe and Japan were the only markets to chase.  South American was to be avoided.  I'ms sure some of those markets have changed.
Never under estimate the power of stupid people in large groups.

Geoff

Getting paid up front is one thing.  A customer who gets the wood and says "That's not good enough" is a real problem after it's travelled in a sea container for 28 days to the Orient.

I've exported to Asia and Europe with reasonable success.  Best thing I ever did was get in touch with EDC (Export Development Canada).  It's a gov't organization that will provide insurance against receivables and claims.  They'll even assist you in the paperwork.  Cost is VERY reasonable considering your exposure.

Good luck...

Geoff

smwwoody

Money first money first money first.

I have exported lumber from the us to europe and asia and when I was in russia we eported into europe.  Get you money first.  

If they want to inspect it have that done at your mill.  then get your money as soon as it hits the dock.  get your money before it is unloaded from the trucks don't let it on the boat with out full payment.  get your money first.  Do not let it cross the US canada border with out you money. get you money first.

Get you money first
Full time Mill Manager
Cleereman head rig
Cooper Scragg
McDonugh gang saw
McDonugh edger
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TS end trim
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Haytrader

smwwoody,

Could you be a little more precise with your answer? I couldn't quite make out what you were trying to say.

 :D  :D  :D  :D  :D
Haytrader

EZ

Boy I dont know, Percy, just like smwwoody said, I'd want the money before it got on the boat.
Down at the shop, these people make millions of dollars every quarter. But when they have to buy a part or something, they have a hard time getting it because they dont pay their previous bill. Hard to understand, people that have all the money in the world, but they dont want to spend it. They must think they are going to take it with them. ::)
EZ

fencerowphil (Phil L.)

I would also emphasize  a middle man, especially until you established trusted, repeat customers.  Yes, you will lose some profit.

The other side is this:  As part of a co-op,  you could be no more honest than any other guy, buy you probably are.  Get my drift (wood)?   A middle man or broker or trader can keep the rift (wood) out of your relationships.  That said, sounds like you have a great opportunity, assuming you have clear understandings and those understandings are written down, signed, and notarized for the six of you!
Phil L.
    get the money,  get it in writing
Bi-VacAtional:  Piano tuner and sawyer.  (Use one to take a vacation from the other.) Have two Stihl 090s, one Stihl 075, Echo CS8000, Echo 346,  two Homely-ite 27AVs, Peterson 10" Swingblade Winch Production Frame, 36" and 54"Alaskan mills, and a sore back.

C_Miller

I didn't think Alberta was "overseas"

C ;D
CJM

smwwoody

Oh did I mention GET YOUR MONEY FIRST

then when you build a good ongoing relationship Keep getting your money first and it will keep going
Full time Mill Manager
Cleereman head rig
Cooper Scragg
McDonugh gang saw
McDonugh edger
McDonugh resaw
TS end trim
Pendu slab recovery system
KJ4WXC

rebocardo

Get all your money before the wood leaves the country. I have had some limited experience in exporting computer software/hardware/books. Cash talks and once it leaves your hands, all the worries are theirs at customs.

Most countries will not send lumber/trunks out of their country unsawn. Try buying mahogany lumber from Asia unsawn.They will use it as junk wood on pallets, but, you can not buy a single piece unprocessed. If you are sending unprocessed wood out of the country, at least get paid up front.

Picture this, "Sorry, your wood is impounded because we found an dangerous insect in one of the pieces." Your shipment is being impounded for a year. It could have been put there by anyone or crawled into the load inside their freightyard. Does not matter if you do not have your money.

Once they have your wood ($##,###) what is to prevent them from not paying you for any reason that they see fit. Suppose the load is lost and they say they can not pay for something they never received and its someone else's fault.

Suppose your load is impounded for any reason. Goes to the inspector's cousin yard where the storage rates end up costing more than the load.

Have you ever dealt with a towing company that stores your car, without permission at $35 per day, but never answers the phone or is not in the office until they contact you for that $100+ storage bill?

If you send it out of the country without full payment, write it off and if you get paid, then count yourself lucky with no worries. Cedar is valued all over the world and in short supply compared to other woods. There is no reason not to sell it here or to sell it overseas with a good markup and full payment. imo.




Percy

 :D :D :D :D :D :D
Thanks for the input folks, I have several questions, the one most heavey on my mind is....should I get my money first?? :D :DJust kidding.
We are having a meeting tomorrow night and Im gonna bring this post along so the rest of the group can read your opinions. I think the consesus its to tread caefully.
Thanks again
Percy
GOLDEN RULE : The guy with the gold, makes the rules.

Fla._Deadheader

  There's a guy in Waldo, Fl, that sells sliced stumps overseas. Has been doing it for years with the same outfit. They tried to get him to let them have credit, NO WAY. He gets a deposit into a special account, and until the BANK RELEASES THE FUNDS, the container sits in his yard.
All truth passes through three stages:
   First, it is ridiculed;
   Second, it is violently opposed; and
   Third, it is accepted as self-evident.

-- Arthur Schopenhauer (1788-1860)

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