Uncertainty of timber supply: suggested tariffs on export logs
A construction industry figure indicates the government could introduce a tariff on logs sent for processing overseas, as small construction crews face uncertainty over timber supply.
Certified Builders Association President Mike Craig said Morning report smaller work teams faced the greatest difficulties resulting from the decision of major lumber supplier Carter Holt Harvey to stop selling lumber to certain local retailers.
The company has stopped selling lumber to Bunnings, ITM and Miter 10 due to supply issues exacerbated by the pandemic.
Craig said it was difficult to predict what effect supply chain issues would have on the construction industry, especially because affected retailers had stockpiled materials and might be able to meet demand for some time.
But small builders who weren’t capitalized and just finished one job and moved on would suffer badly from any shortages.
“If it’s not on the shelves, their men can’t work,” he said.
Rationing of stocks remained a possibility.
He said New Zealand had enough logs, but it was mainly about having the ability to treat and chemically treat the wood. Supply chain issues at ports have led the industry to constantly try to ‘catch up’.
“Some of the treatment has not arrived and it is still in containers,” he said.
“The whole supply chain has slowed down completely, bringing the ships here and having them offloaded. They offload them and distribute them across the country, and then they set off again, waiting for the next batch to arrive.”
Helping the government find solutions to unclog ports would help, Craig said.
“If we can unload the boats, find a solution, like when they went to Whangārei to unload the boats.
Forestry consultant and real estate developer Dennis Neilson said shortages of treated lumber could push prices up at a time when builders and developers were already faced with higher material costs.
He said small businesses would suffer the most and may need to consider shifting the cost into the final price of the home.
Craig said he didn’t blame logging companies who get a lot of money to send unprocessed logs overseas, but that left local sourcing companies running out of material.
“What are you doing about it?” Maybe put higher carbon credits on logs leaving the country, ”he said.
There was also the option for builders to turn to other materials and do the work differently in the meantime, using materials like concrete instead of wood for projects like flooring and siding.
However, Craig said that despite rising costs and delays at ports, the construction industry has remained vibrant with builders busy across the country.
“The costs have increased and they are increasing daily,” he said. “You get price increases on your computer every week, because of the cost of freight.
“Some people have to haul things to New Zealand, but people keep working. I’ve never seen the industry get so busy, it’s absolutely crazy.”
Building and Construction Minister Poto Williams said officials would brief him today on Carter Holt Harvey’s decision.
Williams said the government was speaking with industry representatives to better understand the problem.
She said many sectors have faced supply chain issues over the past year and she expects the construction industry to work together to find a solution.