The Softwood Forest Products Buyer - March/April 2024

Delta Forestry Group Continues To Thrive In A Changing Landscape
Lumber Shipping Companies Are Cautiously Optimistic As Traditional Trends Return
By Zach Miller
“While the trees aren’t going away, there is going
to be less of them with the changing landscape and
our company is still going to thrive, with our size,
management and decision-making style. We will
do well in the long term as we continue to operate
like a family sized business rather than a big
corporation.”
– Dean Garofano, President and
COO, Delta Forestry Group
Lumber shipping companies saw that their trends year over year have begun
to revert back to how traditional markets have been in the past, but they hold a
cautious optimism as geopolitical factors can easily affect the supply chain strategies.
One shipper noted, “We slowly saw the industry normalize over the last 12
months and it is back to pre-pandemic levels. I do not foresee any substantial
increases in our export shipments over the next 12 months.”
Despite seeing their markets slowly return to the traditional trends, a lumber
shipper remarked, “Asking me to predict shipping volumes in the first quarter of
2024 is akin to throwing spaghetti at the wall and seeing ‘what sticks.’”
A shipper stated, “The only constant across all industries is that margins are
being squeezed. Going into the New Year, we can all be hopeful that the economy
starts to pick back up, but I am not sure that is what we will see.”
The October figure was still 15 percentage points below 2019 levels, and with no
sign of improvement since May, according to Sea-Intelligence Maritime Analysis.
To manage the impact of overcapacity primarily driven by the influx of newly
ordered vessels entering the market, carriers are pulling out all the tricks to absorb
capacity. They have many tools at their disposal, whether it’s blank sailings,
cancelling or suspending entire service loops, further slow steaming, laying up
ships or taking longer routes. While all that will combine to help carriers weather
a rough patch of unfavorable supply-demand economics, it undermines schedule
integrity and service reliability.
The disruptions caused by the COVID-19 pandemic highlighted the fragility of
global supply chains. In response, the ocean transportation industry is focusing
on building resilience. This involves diversifying supply chain sources, adopting
agile logistics strategies, and investing in redundant systems to mitigate risks and
ensure the uninterrupted flow of goods. The maritime industry is embracing digitalization
at an unprecedented pace. From smart containers with real-time tracking
capabilities to blockchain-based documentation, technology is streamlining operations,
reducing inefficiencies, and enhancing overall transparency.
2023 was also marked by longshore labor disruption. The International Longshore
and Warehouse Union (ILWU) flexed
Continued on page 38
Rick Harris, Delta Forestry Group’s new Director of Strategic Development.
Delta Forestry Group has moved their headquarters from their Delta Cedar
Sawmill location in Delta, BC, to Pitt Meadows, BC, where their Halo Sawmill
is located. Dean Garofano, President and Chief Operating Officer (COO), stated
this move has been beneficial for the company, “Not only are our current employees
happy to have a less stressful commute to work but we’ve also found that the
move has been nice for attracting new employees because if they live in the area
surrounding the new headquarters, they won’t have to drive through heavy traffic.”
Delta’s website has also made a transition as it highlights the Delta Forestry
Group and its four companies: Delta Cedar Sawmill, Halo Sawmill, Delta Cedar
Specialties and Delta Timber. Each of these companies that the Delta Forestry
Group is comprised of brings a different and important value-added aspect to
one another. “The website is able to show our integrated offerings to our customers
and how we are able to go from forest floor to finished product,” explained
Garofano. “We are able to buy and harvest timber, manufacture it into rough cut
lumber, remanufacture it into a value-added product and sell it to our customers.”
Delta Cedar Specialties is the sales and marketing arm of the Delta Forestry
Group, which handles all of the products that come out of the Delta and Halo
Sawmills. The Delta and Halo Sawmills are run independently and while they are
cutting their own logs, they also provide custom cutting services. “Our customers
continue to come to us for custom cuts as they know the experience and credibility
that we have in the industry for not only doing a good job but for being
trustworthy as well,” Garofano stated.
Delta Timber is the timber division from which the Delta Forestry Group is
able to source fiber. Delta Cedar Specialties then cuts the logs in one of their sawmills
and then remanufactures the rough-cut lumber into finished products.
“We have partners that we work with to manage our remanufacturing,” Garo-
Delta Forestry Group recently completed construction on this 80-bin sorter.
fano said. “Even though we have a few different facilities that our remanufacturing
is done at, we have a quality control program that allows us to maintain
consistency. Our production managers are always on site and make sure that
everything is consistent and is done according to our grades and that the fiber
looks presentable.”
Delta is able to continue to provide these integrated services to their customers
through the capital investments that they are continuously making to their
facilities. “We just finished a project here at the Halo Sawmill, where we added
a Raptor Trim Line and an 80-bin sorter behind it, which replaced our old green
chain,” Garofano said. “This is going to help us with our mill production and will
allow us to send lumber through the trim line at a faster speed when we ramp up
production on a specific cut. We are also not having to rely on employees pulling
the lumber off the green chain during this period where it is difficult to get laborers
who are willing to do such physical work.”
Delta offers Western Red Cedar, Douglas Fir, Alaskan Yellow Cedar and Hemlock.
“While we offer the four species, most of our focus has been on producing
Western Red Cedar in past years,” Garofano stated, adding that he believes that
there will be a shift in this focus as the fiber basket continues to be altered by
natural disasters and old growth deferrals. “Trying to grow our Cedar business
has been challenging with climate changes and government policies impacting
our fiber supply, it is getting harder to find the timber that we need, especially
Cedar. Delta is now focusing on growing their Hemlock program while maintaining
their cedar volumes.
“The industry is in a transitionary period and it is going to be turbulent over the
next several years and I think that our company is set up for a very bright future
when we look past some of the obstacles that we will have to overcome,” Garo-
The Delta and Halo Sawmills are run independently and while they are cutting
their own logs, they also provide custom cutting services.
Continued on page 46
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Page 6 Softwood Forest Products Buyer • March/April 2024 Softwood Forest Products Buyer • March/April 2024 Page 7
Peter Lovett
Peter Lovett
King City Forwarding USA, Inc.
Chesapeake, VA
As we sail into 2024, the ocean
transportation industry is experiencing
a sea change in trends that
are reshaping the way goods are
moved across the globe. These
shifts are not only altering the
dynamics of maritime commerce
but also necessitating innovative
strategies to address supply chain
challenges. I would characterize
2023 as the “correction” year in
the ocean freight market where we
saw significant reductions in export
and import freight rates across all
trades. There was an overall decline
in ocean freight demand globally
caused by a slower economy,
as governments across the world
managed inflation. Overall, the
supply chain experienced better
fluidity in 2023, with the alleviation
of port congestion on the East
and West coast, which resulted in
more reliable shipping schedules.
Even with ports clear of congestion,
service reliability remains
an issue, not having reverted to
pre-COVID levels. Due to overcapacity
and carriers’ aggressive
response, it will likely not return
to normal levels in 2024. Global
container ship scheduled reliability
stood at 64.4 percent in October, up
from 51.8 percent a year earlier and
approximately 35 percent in 2021.