Hemlock should work fine for out door projects, of course it is a more susceptible to rot than some others but if you want to "treat it" and/or paint it you should get good life out of it.
As per the cracking and shrinkage, that will depend on how wet the wood is, when it was cut, and what the wood cuts are i.e. flatsawn, quartersawn etc. so really hard to predict without more info.
The best would be quartersawn wood, that is air dried for a year and from a tree that was cut and milled in the late fall or winter.
Worst is green wood, right out of the mill, flatsawn from a tree cut in the late spring early summer.
So somewhere with that info, you will find what wood you can get from them, and if they know what you want to do with it, they are often somewhat helpful in getting the best they can to for you.
Hope that helps a bit ...