Two commodities trading veterans have begun to seek investors in an electronics marketplace for buying and selling lumber, a venture that they expect to launch in spring 2018.
Called LumberXchange (LX), the electronic marketplace is intended to make transactions possible in real time. LX will make pricing more transparent, speed up deal-making, reduce personnel needs, and cut overall transaction costs, according to co-owners Mike Wisnefski and Tony Verga.
“We want to go in and become the marketplace for the industry,” Wisnefski said. The founders maintain that with legacy systems, it takes about 170 hours to do the management, selling, billing, collecting, and logistics required to handle 40 lumber deals. Wisnefski and Verga claim LumberXchange will make it possible to do the same 40 transactions in just 27 hours.
LumberXchange’s system will integrate current freight rates with market prices of inventories, and it can show inventory status at multiple locations. It also will incorporate a financial payments system, as all deals will require payment at the time the sale is closed. It’s similar to the online systems commodity traders use, and as such its success will hinge in part on how many buyers and sellers use it..
“LX is an attractive alternative to the current labor-intensive system of ‘call around’ sales used in today’s market,” a promotional document for LX declares. “As the workforce gets older, experienced traders who are comfortable with verbal communication are retiring. Their much-younger replacements do not fear new technology. … They understand how to optimize value using new technology.”