Imported Hardwoods Supply Chain Issues

If you are a regular customer of ours,  I am sure you are aware of some of the various supply chain issues, mostly stemming from worldwide shipping troubles, throughout the tropical hardwood market.

TropicalSupplyChainIssuesIt has been reported that the average cost to ship a 40’ container out of China is now $ 20,000, which is up from less than $2,000 per container prior to Covid-19. Containers are going where the money is, so when it costs much less than that to ship a 40’ container from Africa to the US it makes sense that there is less capacity available. Some shipping lines have been closing lanes as well, meaning there are fewer port calls in the US, if they even offer service at all.

The imbalance is not just in international shipping, it is everywhere. Even showing up in the DJT (Dow Jones Transportation Average), that index is down 11% since May where everything else is up.  The opposite moves here could spell more trouble down the road for the economy.

We do not expect the inventories of African Hardwoods to improve much here in 2021, in fact, it may be 6-9 months before we see any improvement, and that is still a huge maybe. Everything depends on the shipping lines and how much capacity they place in the African export market.

Things are pretty much the same in other continents as well. We have seen rates triple shipping from Europe to the US or more, rates there are as high as $ 15,000 for a 40’ container. And with Covid cases rising worldwide again, supply and logistics issues will remain our biggest obstacle. Inventories will remain tight for quite some time, so plan ahead on your inventory and don’t expect prices to fall for the foreseeable future.

If you are in the market for tropical hardwoods, feel free to give us a call. We are happy to see what we can do to help get you the hardwood lumber you require! 

Jesper Bach
Baillie Lumber Co.
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