Article from UK news paper

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DavidF

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David
Gardeners warned off fixing the fence


By Paul Stokes

Last Updated: 3:15am BST 31/05/2007





People are being warned to delay mending their garden fences as the price of timber soars because of a supply shortage.
The cost of a standard 6ft by 6ft panel is reported to have quadrupled in some cases to up to £80 and could climb even higher.
Supply problems are so severe that many DIY chains and hardware stores have little or no traditional lap fencing panels left in stock.
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Many gardeners had been planning to repair damage caused by gale-force winds which battered the UK in January and February.
But smaller stores are increasingly advising customers to forget the idea for the next few months, according to the current issue of Amateur Gardening magazine.
Poor timber-harvesting conditions in Russia, Scandinavia and the Baltic countries last winter are also impacting on furniture makers and builders. Already sawmills are having to pay an extra 30 per cent for their timber and another hike of 18 per cent is likely by the end of June.
The position became so critical that they had to negotiate a price and pay for it before the timber had left its country of origin otherwise it was simply sold to the highest bidder once on a boat.
Adding to the headache for the UK industry is a new export levy imposed in Russia and stock being diverted for building projects in fast-developing states such as China and Dubai.
Wendy Baker, chief executive of the Fencing Contractors Association, which represents 260 of the UK's largest fencing companies, said the UK had to import 80 per cent of its timber.
She said the supply problem had been caused in part because of adverse conditions in eastern Europe with the wet summer not being followed by a crisp winter for harvesting. Mrs Baker said further price increases were still expected, but believes there may be "light at the end of the tunnel".
Offers of alternative sources have been made from Germany, South America and Latvia, which could make up some of the shortfall.
But she explained that UK contractors had to be satisfied that the timber met standards on sustainability.
She said: "The FCA is working closely with its members and the industry to assist with this prolonged crisis but urges customers to be understanding of the problems and not to 'panic the prices up'.
"The industry is already experiencing 30 per cent increases - and rising - on timber costs. UK timber suppliers are unable to confirm delivery dates to fence contractors, whose customers, quite understandably, are expecting installation deadlines to be met.
"We as fencing contactors have very important clients such as the Highways Agency and have to prove that timber and other components come down a specific route."
Decking and other common garden products such as sheds are also affected by the increase in prices, while the mild spring has led to a rise in demand from the construction sector.
Dealers say the cost at which they buy sawn softwood rose by 30 per cent in six months, and according to the Office for National Statistics, the inflation rate for wood products was 13 per cent last month, its highest level for more than a decade.
Recent figures from the United Nations have also shown that after being a comparatively small consumer, China is now "the number one importer of softwood and hardwood logs".
A spokesman for the Scottish Timber Trade Association said: "China seems to be consuming mind-boggling amounts of wood right now."





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PeteM

Pete
Corporate Member
>>Recent figures from the United Nations have also shown that after being a comparatively small consumer, China is now "the number one importer of softwood and hardwood logs".
A spokesman for the Scottish Timber Trade Association said: "China seems to be consuming mind-boggling amounts of wood right now."<<

The effect China is having on the world is "mind-boggling" (and a bit scary) in many areas.

pete
 

DavidF

New User
David
They should go back to wattle fences made from coppice wood. Totally sustainable and a lift to the local economy rather than shipping boatloads of money offshore.

http://www.coppice.org.uk/

I plan to get started in green woodworking and coppice woodland management.

I agree Mike, Many a time I have watched wattles being made at country fairs in the New Forest. I got a big interest in making traditional tools etc, but never managed to do it yet. On my list are: Wheels, rakes, brooms and barrels - one day..
 
J

jeff...

Kyle wrote a thread about rising lumber prices some time back, this article just reinforces his thread. I guess what I don't understand is why? How can it be cheaper to harvest a tree, put it on a boat, ship it to china, have it processed in chine, made into a piece of furniture in china, put back on a boat, send back to the US and be sold to a consumer, cheaper than we could do it all here at home, something just ain't making sense, is it?
 

DavidF

New User
David
Kyle wrote a thread about rising lumber prices some time back, this article just reinforces his thread. I guess what I don't understand is why? How can it be cheaper to harvest a tree, put it on a boat, ship it to china, have it processed in chine, made into a piece of furniture in china, put back on a boat, send back to the US and be sold to a consumer, cheaper than we could do it all here at home, something just ain't making sense, is it?

Scale and low wages....
 

DavidF

New User
David
Very, very low wages.....:slap:

We sold a pick and place system to a Chinese customer, they wanted an engineer on site full time for two years! We hired one, trained him and pay him a "good" wage of $300 / month, yes PER MONTH! $7,200 on a $200,000 sale - no problem. We are paying our engineers in the US $5,000 a month; the difference and consequence is easy to see.
 

Kyle

New User
Kyle Edwards
We sold a pick and place system to a Chinese customer, they wanted an engineer on site full time for two years! We hired one, trained him and pay him a "good" wage of $300 / month, yes PER MONTH! $7,200 on a $200,000 sale - no problem. We are paying our engineers in the US $5,000 a month; the difference and consequence is easy to see.

That is ALL people are looking at "the wage savings" I have done numerous cost analysis on the total cost of the supply chain and find this argument extremely flawed. Many companies that have offshored entire manufacturing facilities to china or the PAC rim are in for a rude awakening and it is already happening.

Labor cost are rising in China, raw material inputs are rising, transport costs are going sky high, tariffs WILL cause significant uplift. The cost of labor in the US as a component of MSCC (Material Supply Chain Costs) is minimal.

Most manufactured goods labor is about 15% of the total cost of the goods for a high volume operation. The material inputs and transport account for a majority.

Many of the contract manufacturers are moving their manufacturing to a low cost regional solution to offset transport and material costs. Mexico is becoming a cheaper solution than China for most high volume manufacturers due to the lower wage structure AND overall transport costs and the NAFTA regulation which favor trade in this hemisphere.Repatriation to some degree is already occuring and will bring some of this back to the US.


I would also contend that Chinese products are of a lower quality than products from Central and south America or Malaysia and Japan..

rework costs are another "hidden" cost.

Back on topic..

Wood prices ARE going higher due to fuel costs and weather conditions..I fully expect costs to go through the roof in the US in the future due to offshore demand of our natural resources.
 
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