KUCHING: Wood product manufacturers from several countries are complaining about the skyrocketing ocean freight charges and irregular shipping schedules when exporting their products to the United States (US) and Europe.
The complaints about logistics in exporting timber products are loudest from Vietnam, China, Indonesia, Brazil, and Malaysia, according to the International Tropical Timber Organisation (ITTO) Trade Advisory Group (TAG) in a trade statement issued in December 2024.
The statement was published in the latest issue of the STA (Sarawak Timber Association) Review.
TAG comprises representatives of timber traders, manufacturers, importers, and exporters. Established in the year 2000, it provides input to the International Tropical Timber Council’s (ITTC) policy work and actions regarding the global timber trade.
“Today, wood product manufacturers everywhere are reeling from skyrocketing shipping costs and irregular shipping schedules due to, firstly, the drought in Panama, which has severely curtailed ship passages through the canal, and secondly, the ongoing conflicts in the Red Sea region.
“Exporters in many producer countries are not happy that shipping companies are using the continuing fallout from the COVID-19 pandemic and geopolitical conflicts as reasons to increase marine freight and other logistics costs. Prior to these recent increases, freight charges from Southeast Asia to the US or EU (European Union) were around US$2,000 per 40-foot container.
“In the post-COVID-19 pandemic period, freight charges soared to between US$18,000 and US$20,000, and now, because of the war in Ukraine and the Red Sea chaos, freight charges are fluctuating between US$8,000 and US$10,000 to the US and EU markets.
“Ultimately, these costs will not only depress trade but also be passed along to consumers at a time when price consciousness is becoming an increasing barrier to the use of wood,” said TAG.
According to TAG, the tropical timber markets are very unstable at present, with many uncertainties ahead.
The World Bank’s latest Global Economic Prospects report highlights the struggles and slow recovery of global trade in 2023, marking one of the weakest performances in 50 years outside of global recessions.
“During the Global Legal and Sustainable Timber Forum (GLSTF) 2024 meeting in Macau and subsequent discussions among TAG members worldwide, it was established that buyers of tropical timber in our traditional markets are not receiving information about the progress tropical timber producers have made — and continue to make — towards sustainable forest management (SFM).
“There is a need for a mechanism to communicate, educate, promote, market, and publicise the tremendous progress tropical timber producers have achieved since the Rio Earth Summit in 1992 regarding traceability, legality, and sustainability.
“It now seems natural for ITTO and GLSTF to work together to address negative market perceptions,” said TAG.
The GLSTF was created in 2023 by ITTO and Macao’s Commerce and Investment Promotion Institute. In September 2024, the GLSTF launched the Action Framework for Promoting Legal and Sustainable Timber Supply Chains, which aims to support the development of the timber industry, contribute to sustainable development goals, and combat climate change.
At the GLSTF 2024 meeting, ITTO Executive Director Sheam Satkuru asserted that GLSTF serves as a collaborative platform for timber industry stakeholders, designed to strengthen networking and business exchanges while facilitating SFM and the legal and sustainable trade of timber and wood products.
TAG, therefore, suggests forming a working group of stakeholders to define what and how to communicate with buyers of tropical timber products.
It stated that information on the progress producers have made in SFM could be compiled and used in a campaign to counter consumer misconceptions.
“TAG proposes that resources and funding be allocated to employ a dedicated person to handle this crucial task. There is a desperate need for someone working without distractions to undertake this effort, with support from all ITTO members.
“This 100 per cent focus on rebuilding demand for tropical timber trade is what TAG seeks from ITTC today. Together, we can create a narrative that demonstrates what we all know — that wood is sustainable, that trade benefits forests, and that together, we can protect tropical forests for the future,” the TAG trade statement added.
Regarding the European Union Deforestation Regulation (EUDR), TAG welcomes the European Commission’s recent decision to delay its implementation by 12 months to December 30, 2025, allowing the timber industry more time to comply with the new regulations.
“However, the industry is concerned about the uncertainty surrounding the delay and last-minute amendments, which are problematic for multiple reasons.
“While we acknowledge that ITTO cannot directly influence either the delay or the regulation, we would be remiss not to highlight this issue, given the significant impact the EUDR has — and will continue to have — on global forestry policy and trade.
“We urge the European Commission to work with both consumers and producers to ensure a smooth implementation of the EUDR,” said TAG.
