Gross Tally VS Net Tally:
What are you paying for and what are you receiving?
Do
you know whether the hardwood lumber you are buying is quoted on gross
or net tally? If you are buying lumber green or air dry, or if somebody
is quoting you Kiln Dry lumber on Gross Tally/Measure, you are loosing
out big time. READ ON!!!
If you're not careful, gross measure may mean shrinking profits. THIS
IS HOW SOME SUPPLIERS’ PRICE MIGHT SEEM CHEAPER since they quote you
based on gross measure/tally rather than net measure/tally.
Beware, you have been forewarned!!!
Kiln
dried hardwood lumber is sold by the board foot or cubic metre, and the
method used to tally the board footage can make a significant
difference in the true cost. Hardwood lumber can be measured two ways:
"net" measure, or "gross" measure.
The National Conference on Weights and Measures (which is the law in most states) adopted the following in 1977:
- "Sales
of hardwood lumber measured after kiln drying shall be ... on the basis
of net board footage with no addition of footage for kiln drying
shrinkage."
Gross tally is the amount of green lumber the logger sells to the lumber mill
before drying and milling. After drying, lumber loses an average
8% of its footage. After milling, it can lose another
10%. That is, GROSS, or green, measure means that the lumber has
been tallied before it went to the kiln, or while it was still
considered "green".
For
instance, even though your invoice and shipping documents say you
ordered 1 cubic metre (cbm), you will only receive 0.92 cbm because a
supplier selling at gross tally does not take into account the 8% loss
in footage when the material is dried.
If
you purchase from your current supplier at gross tally, you are paying
for material that you do not receive! Also, the grade will be lowered
(a little or a lot!), so it is like buying blind.
Net tally takes into account the loss of footage as lumber is dried and surfaced
- tallied, or counted, after it has completed the drying process and
takes into account the shrinkage.
In
order to accurately compare price quotes, you must know which method of
measure you are being quoted on and is being used.
Consider scenario #1: A salesperson quotes you a
NET measure price of $1,800 per cbm and you order 1 cbm of lumber. Your
bill for the lumber will be $1,800, and the quantity delivered will
measure 1 cbm.
So you will receive 1 cbm and pay $1,800
Now consider scenario #2: A salesperson quotes you a
GROSS measure price of $1750 per cbm, with a shrinkage factor of 8% (which is
the industry standard used). You order 1 cbm. If your bill lists
quantity at 1 cbm and the cost is $1750, then the quantity delivered
should measure 0.920 cbm (1 cbm less the shrinkage factor of 8%).
So, now, the mill will deliver only 0.92 cbm at $1,750.
However,
if you insist on receiving 1 cbm, then the bill would increase to
(1cbm/0.92 cbm to allow for shrinkage of 8%) x $1,750 = $1,902.
So
1 cbm = $1,902 which is higher than the perceived quote of $1,750
quoted above. So the $1,800/cbm quote on net tally is cheaper and a
better quote.
To
obtain the true comparative cost, you must divide the quoted gross
measure price by the inverse of the shrinkage factor. Using the figures
from the example above, divide $1,750 by 0.92 (the inverse of the 8%
shrinkage factor). The result is $1,902/cbm.
Another example to show the difference between gross and net tally:
Wood Shrinkage
The
drawing on the left illustrates the dimensional size difference from a
board of plain sawn, fresh cut lumber measuring 10" in width.
Form green to a kiln dried moisture content of 8%, this board shrinks
approximately 8% in width. The kiln dried board is now 9.2" in
width.
Hardwood Lumber Sold on the Gross Tally Method
One Board - 4/4 x 10" x 12' Red Oak = 10 Board Feet
(Gross Tally) |
| Proof: 10" x 12' = 120 ÷ (Divided) By 12 = 10' Surface Measure and you pay for 10' of lumber. |
| Gross Tally Pricing 10 Board Feet @ $2.00 = $20.00 For This Board |
GoodWOOD Forest Products Corp.’s Net Tally Method
One Board - 4/4 x 9.2" x 12' Red Oak = 9 Board Feet
(Net Tally) |
Proof: 9.2" x 12' = 111.6 ÷ (Divided) By 12 = 9.2' Surface Measure
(The NHLA requires all fractions below 1/2 foot to be dropped and rounded off- Surface Measure must be a whole number.)
The Surface Measure is reduced to 9 board feet and you pay for 9 board
feet only (NOT 10' as above) |
| Net Tally Pricing: 9 Board Feet @ $2.20 = $19.80 For This Board |
| Conclusion: |
A Competitor selling a cheaper price Gross Tally lumber, is in reality more expensive than what appears as our more expensive Net Tally price.
Note: Lumber sold at $2.20 a board foot on a Net Tally is less expensive than lumber sold at $2.00 a board foot on a Gross Tally! |
| At GoodWOOD Forest Products Corp. you will always receive lumber on Net Tally basis. ALWAYS! Many hardwood distributors CANNOT make you this guarantee. |
|
After you have converted and compared the pricing, and placed your order, be sure to measure and verify the quantity when the lumber is delivered. Distributors rarely quote net tally after straight-line ripping. Most mills will estimate 10-11% footage loss in straight-line ripping, plus 8% percent for kiln shrinkage. In the end, your footage can be different, based on net or gross tally and additional loss during millwork services.
That is the final step to insure you received what you expected, shrinkage or no shrinkage.
At GoodWOOD Forest Products Corp., we sell our lumber net tally so that when you order 1 cbm of rough lumber, you receive and pay for 1 cbm, not 0.92 cbm! AND, you receive on grade lumber; not lumber that was graded before drying though which you could loose some of its qualities through shrinkage thus making the lumber fall to a lower grade.
Still not convinced? Let a GoodWOOD Forest Products Corp. representative show you the difference!
Call us at +1 (905) 883-7777 or toll free at +1-(866)-814-7777 for pricing.
