1) Why is the market experiencing shortages of wood and other products?
Supply issues are being experienced by all suppliers, buyers, and industries around the world. Primary drivers continuing to affect supply:
2) What products are impacted the most? And when can we expect supply to improve or prices plateau?
While some products are being impacted more than others, all products are experiencing difficulties. Comments below highlight major product impacts:
Lumbercore:
We expect Lumbercore supply to continue to experience challenges throughout the end of Q2 2021, with continuing increased pressure on prices.
Meranti:
We expect supply to remain tight at least through end Q2 2021, due to a heavy rain season in Malaysia which has driven log shortages. Additionally, Covid restrictions have caused labor shortages in both harvesting and in the mills, slowing production. Some mills have only been operating at 60-70% capacity. And we expect prices to continue to increase over that period, attributable to supply/demand constraints.
However, Robert Weed has been working diligently over the past several months to secure enough supply for our customers’ demands, and we are confident in our future Meranti supply chain volumes. However, the unknowns with this, as with any imported product, are potential delays at the port of entry and transportation due to inclement weather.
Azdel:
We are closely monitoring the ongoing situation of the force majeure that was declared by two critical suppliers to Hanwa Azdel. However, we believe our current near-term supply is sufficient to meet our customers’ demands.
MDF:
A fire at the manufacturing plant of a major Canadian MDF supplier continues to severely limit MDF supply.
3) What is Robert Weed doing to address the supply issue?
In the short-term we continue to work closely with all of our global supply partners to ensure that we can meet our customers’ needs as well as the global supply chain will allow.
We are also expanding our supply chain partnerships to improve future supply availability.
4) What can we do in the future to mitigate risk so we can avoid some of these challenges?
We are looking at short-term and long-term options to deliver the products our customers need. Additionally, by taking a more proactive approach and partnering with our clients/suppliers on customer’s needs, forecasting, and demand planning, we can create improve predictability and reduce volatility in material supply and customer pricing.
This includes customers embracing our Discipline in Supply Chain (DiSC) methodology. Although DiSC cannot help solve the challenges that are currently upon us all, it can be a key part of the long-term solution, which includes partnering with our customers to improve forecasting, create predictability in pricing and supply levels, and managing inventory much more effectively.
