There are many factors that influence the costs of the wood industry and they are mentioned below:
1. The material impact on the total cost
The type of wood depends on the species, sizes and quality of the trees. A tree with slow turnover will need a longer time to get and the unitary cost of the finished product will increase. The length and width specifications are also important. The larger and longer boards are more difficult to get and thus are more costly.
Consider also seasonality. The cost of wood will rise in severe rainy or winter seasons.
The drying of the wood increases the cost but adds value and customer satisfaction. When wood moisture is below twenty per cent it becomes immune to fungal attacks and rot risk. It also has strength, consistency, shape and colour preservation that gives a guarantee of good quality.
2. A suitable factory location lowers the cost
The wood industry faces complex issues in logistics. The production centres are usually far from industrial and consumer centres. The location of the production centres determines the shipping lumber cost. The cost of taking and transporting wood depends on many factors:
- the distance and complexity to the production centres
- the distance and complexity to the markets
- the road conditions
- the geographical complexity
- the slopes
- the soil humidity
- the precipitations
- the type of route: river, sea, waterway, railroad, road, air
3. The regulatory framework
Forests cover more than 30% of the earth's surface of our planet, almost 4,000 million hectares, and are essential for the welfare of human beings, sustainable development and the health of the planet. (Source: United Nations Economic and Social Council https://undocs.org/en/E/2017/10)
Thus, wood is a renewable resource and it cost fluctuates depending on the regulatory framework. There are national and international organizations that guarantee its sustainability. They promote afforestation with the proper settlement of the industrial process, in order to plan and produce trees in the same place. They also prevent deforestation, forest degradation and prevent illegal logging in many parts of the world.
4. Choosing the right transport
If you have your own truck fleet, you will have more control over your operating costs. If you need to outsource, you solve the transport issue, but it increases the loss of control over the quality of customer delivery service.
When shipping wood internationally, review with your carrier what intermodal is available. The most convenient transportation is maritime and rail. Truck transport makes the product more expensive for long distances. In countries with large extensions, road trains can help alleviate this problem (United States, Australia, Brazil, etc.).
Consider also the amount of lumber transportation. The higher the volume demand, the lower the price per unit of lumber. Making Full-Truck-Load (FTL) shipments instead of Less-than-Truck-Load (LTL) will reduce the cost and delivery time. Also, consider that one order per container has a lower cost than many loads per container. Locating small merchandise in one container involves moving other products and leads to an excess movement. Many orders per container imply several destination stops and longer cycle times.
5. Introduce an Energy Management Plan
Energy management is the application of engineering principles to the control of energy. The lumber industry uses a mix of energy resources, such as electricity, diesel, gasoline and heat. Use energy technologies and practices that can save energy. Explore and check saving opportunities at all process stages:
- forest road development
- tree felling
- product transformation
- drying process
6. The usage of adequate machinery
To ensure a low cost of wood, companies require complementary machinery.
The forklifts are not suitable; they present weight restriction and manoeuvrability limitations. In addition, own forklifts are frequently used for other internal services and not having at the time of loading/unloading, the shipments suffer delays. Other equipment, such as cranes, are not specifically designed for loading and unloading heavy and bulky loads.
On the other hand, trucking companies don’t have a forklift to lift the package into the truck. There is also uncertainty about whether their driver will be willing to help to load/unload the wood. Then shipping wood becomes expensive.
SmartTEH offers effective solutions for container loading in the wood industry. Alternative solutions are presented.
Container loading machine - it is the ideal solution to load bulky and heavy goods. It reduces the loading and unloading times to a few minutes without the need to adjust to any platform. The benefits are:
- reduction of product damage
- reduction of labor and transportation costs
- reduction of off-site containerization
- increases the space usage
LOG Loader - it's a machine designed for loading logs effectively into containers. It's suitable for the loading of long products, such as logs or utility poles. It's composed of an articulated front end loader, a loading platform and a tailored sidewall.
The benefits are:
- sidewall openings adaptable to any log dimensions
- quick containerization
- adaptable sidewall openings
- accurate weighting
- low maintenance and operating costs