In this edition, we’re diving into supply-chain integration challenges. The sector is composed of entities of vastly different sizes, creating power imbalances, mismatched processes and infrastructure.

Big challenges for small players

The timber industry is marked by stark differences in company sizes. Large harvesting companies and sawmills can dominate the market making it tough for smaller businesses to negotiate fair prices or to access markets and services.

Unfavourable payment terms imposed by large sawmills can cause financial strain for smaller harvesting contractors. A delay in timber collection can mean months of waiting for payment, which is unsustainable for smaller operations.

Small companies also face hurdles when it comes to integrating into big construction supply chains due to complex data requirements and capacity limitations. In general, the perception of home grown wood held by construction is a lack of availability. The time taken to source, and then procure local timber unfeasible within projects with tight time-scales. The processes and communication of smaller timber supply companies often unable to match the required pace of the construction industry.

For small-scale woodlands, there is a constant struggle to be financially viable due to lack of historical management, inadequate infrastructure, and high fixed costs. Issues like stranded partial lorry loads and unclear market routes for small timber parcels often result in valuable timber being used as firewood instead.

How can CloudForest address these disparities

The timber industry faces a myriad of challenges stemming from its diverse composition and infrastructure disparities.

We’ve heard from forest managers how selling small parcels of 200-300 tonnes of timber takes them much longer and is more difficult than selling a much bigger parcel. Conversely sawmills can’t afford to waste lots of time chasing after small parcels of timber. We’re working with both forest managers and sawmills to develop tools to make selling these smaller parcels of timber easier. We already have automated match-making with email alerts for timber meeting a buyer’s requirements.

At the moment we’re working on tools that will support the transaction between the buyer and seller, ensuring both have the information and confidence they need to proceed. As the networks of people and organisations using CloudForest develop there will be more choice: what timber to buy, where to buy it from and who to work with.

Join us next month where we’ll be talking more about the true value of timber.