Supply chain pressures from the forest to the port are prompting contractors to call for a pan-industry group to better coordinate resources and planning in the sector.
Forest Industry Contractors Association (FICA) chief executive Prue Younger says significant logjams at the country’s ports, shipping schedule delays and labour issues were all culminating in significant pressure on operators and infrastructure throughout the sector at present.
Those pressures were also exacerbated by strong demand by China for New Zealand logs. China comprised 83% of total NZ log sales to the year ended March and total industry revenue is expected to top a record-setting $3.6 billion for year ended June, up 25% on the previous year.
“There are issues and delays even in getting logs off skid sites, sometimes that translates to a shortfall in labour but other times, it is also due to a need for better planning by the forestry principal,” Younger said.
From there, issues grew around shortages in logging truck drivers who were in exceptionally high demand and shipping delays.
“I think we need a pan-sector industry group that gets all the players in the sector around the table together to deliver a more coordinated, planned approach to managing these issues,” she said.
Younger says she wanted to see the sector move out of the stop-start, boom-bust type of cycle that has been occurring.
The sector is highly fragmented, with groups that include forest owners, farm foresters, contractors, transport operators and wood processing-manufacturing, all represented under separate identities.
She says the industry is also being hit on the importation side of business, with delays reported for new vehicles, equipment, and parts, all stretching some operators to the limit with a mid-month price drop in logs that usually occurs about this time of year.
The pressures come at a time when Chinese appetite for NZ logs continues unabated.
NZ is in pole position to supply, given trade issues between China and Australia, and a slow down in imports from Russia. NZ is now the largest supplier of softwood logs to China, followed by Germany, Russia and the United States.
Kevin Ihaka of Forest Protection Services in Northland says the pressure was also on at the other end of the forest lifecycle as the planting season hit full swing.
“Trying to get people for planting is proving extremely difficult. We have lost that usual supply of backpackers, and there seems to be a lot of competition for people out there across the primary sector,” Ihaka said.
He had been working closely with the Ministry for Social Development to employ more locals, but acknowledged this required a high level of pastoral care to manage people into work situations they may not have experienced before.
He had tried recruiting staff through the “$10,000, 12-week challenge” which kicked off in late June, run through FICA. Applicants are invited to take up a 12-week challenge planting trees for $10,000 in wages.
“But we have had a low hit-rate with it. I wonder if people don’t understand exactly what the job entails, and one of the misunderstandings is that it is a minimum wage job, when in fact people can earn good pay, $300-$600 a day once they are experienced,” he said.
At present, as in the dairy sector, there was a lot of poaching between employers occurring, pushing up pay rates but not increasing the supply of people to work.
“The best strategy we can take now is to ensure we make this sector as attractive as possible to potential employees. The shortage has changed pay rates a fair bit, but we still need more people,” he said.
He believed there was a good opportunity for the sector to be employing more women than it was right now.
