In this edition, we dive into the repercussions of insufficient market data on businesses operating within this ecosystem.

Within the small-scale timber supply chain, a glaring challenge exists: a lack of market transparency. An absence of independent data leads to a reliance on trust, creates exclusivity within the industry, and contributes to power imbalances.

Navigating supply uncertainties

Sawmillers grapple with uncertain and uneven log supplies. A lack of confidence in their local timber inventory hampers their ability to invest in processing equipment. Fluctuating supply makes managing cash flows difficult and can result in timber going for a low price to distant buyers who are able to stockpile.

Meeting demand challenges

Aligning supply with demand proves to be a Herculean task for sawmills, particularly within the construction supply chain. The disparity between log processing times and construction procurement lead-times exacerbates the situation. A lack of suitable storage on site or within manufacturing facilities often demands just-in-time procurement. Woodland owners and managers can struggle to find the right buyer for their timber.

Price

The absence of benchmark timber prices leaves people feeling exposed when they buy and sell homegrown timber. Woodland managers and owners encounter delays and fragility in the deals they negotiate, weakening their revenue generation capabilities. For sawmills, securing logs at competitive prices is paramount for viability, yet the lack of benchmark data further erodes their market confidence.

Procurement delays plague the construction industry due to difficulties in obtaining timber quotes, driving them towards readily available suppliers and off-the-shelf materials.

How might CloudForest address some of these challenges

One simple thing we’ve done is create a place where woodland owners and managers can list standing timber before they cut it down. This way they can let people know about roadside logs well in advance of upcoming harvesting operations, or even wait until they receive an offer that makes it worthwhile cutting the trees down.

We’re exploring with woodland managers further ways we can make the data that exists about woodlands more useful. We think it would be great if sawmills had better knowledge of what timber is out there. The innovative construction companies we’re working with are also interested in the story behind the wood, and want to be able to demonstrate the environmental impact of their timber procurement.

Keep an eye out for next month’s newsletter where we’ll be talking more about power imbalances and the broader challenges that face an industry encompassing entities of radically different sizes.