Log exports high prices create New Zealand trucking backlog

While strong demand from China is driving up prices, AgriHQ says high freight costs are impacting margins (file image). Photo / 123RF

By Maja Burry of RNZ.

Strong export prices for logs are creating bottlenecks in the local supply chain, with forest owners reporting problems securing log truck drivers and in some cases, harvesting contractors.

Forest Owners Association's president Phil Taylor said when log prices were high, smaller forest owners, including farmers, seized the opportunity to maximise returns.

"It's a very good opportunity to realise their investments and for those farmers that have trees to provide them with a significant boost to their incomes."

The shortage in log truck drivers was a developing concern and the association was keen to work with Te Uru Rākau New Zealand Forest Service to encourage more people into the industry, Taylor said.

"The key bottleneck is around getting sufficient trucking to ship the logs from the forest where they're harvested either to the mills or to the export ports.

"I've been talking with a number of sawmillers recently who are struggling to be able to get reliable supply simply because of the restrictions in the transport sector."

That was no fault of the transport operators but the industry was "going gangbusters" and it was difficult to recruit enough workers into rural industries to keep up, Taylor said.

Road Transport Forum chief executive Nick Leggett said finding log truck drivers was a challenge because most forestry related work required a Class 5 licence - the highest level heavy vehicle licence.

The forum had launched a driver training programme which aimed to address that shortage, Leggett said.

"Trucking has an ageing workforce and we want to bring a new and diverse range of people into the road freight transport industry."

Shipping costs taking a chip out of margins

While strong demand from China was driving up prices, AgriHQ said high freight costs were impacting margins.

Forestry analyst Reece Brick said last month shipping rates hit an 11-year high, around double what was being paid in December and January.

"China is buying away at very, very strong levels at the moment but forestry's the same as any other industry where just organising shipping is just a major headache and it's starting to bite into prices."

That had more of an impact on forestry compared to other export industries, Brick said.

"There's less ships chartered... It's a bit more on-the-spot market, you sort of almost organise it [freight] as you need it, a bit more at least than say the meat industry."

- RNZ