The cost of lumber has increased astronomically in the last year and a half. Here are the facts, costs have gone up over 120% since April 2020 to May 2021 according to the U.S. Bureau of Labor Statistics Lumber Price Index.Unfortunately, this cost increase is spread across the board. This issue runs much deeper and affects all businesses unrelated to the building and remodeling industry.
COMPANIES RAISING COSTS: Why is it necessary?
Simple, because companies can and need to because their overhead has increased.There is a shortage in supply with demand increasing due to economics 101. So, if you need it, you’ll have to pay for it. With the cost of demand also comes the increased cost of transportation and other various labor such as mill workers. Profits are the main goal of the company and consumers are the ones who will have to pay for the increase. Along with the epidemic and other politics, there has also been increases in tariffs which, again, raise the cost for the consumer.Regarding lumber, the plants and mills can only move so fast. Due to COVID-19, many prices have gone up due to demand. During this time, lumber facilities and workers were not able to keep up with supply. Even with added shifts working round the clock, there will always be a max capacity unless there is expansion, which will again increase cost and will take time.
PRODUCT SUPPLY: What products are being affected?
If you just look at the cost of all goods in general, you will notice an increase overall including food and other tangible goods because of demand, shutdown of companies during the pandemic, transportation costs and other various issues related. Specifically with lumber, product storage is included such as wood pallets and containers which is essential for the process to run smoothly.
RAISING PRICES: Who does this impact?
Everyone is impacted, to get straight to the point. However, look at this from a transportation and storage point of view. One of the major shortages right now is due to lack of wooden pallets. Without having anything to move the product or store the product on, there could be further repercussions such as losing product to direct contact to the ground and contamination as well as potential health and safety violations.A great solution is reusing, reselling, and recycling pallets. By utilizing this kind of unique service, it will cut overhead costs from building new ones with fresh lumber.
Hope Timber Pallet can help a company out with all of those options. In addition, they will come to a business and pick up old pallets, which saves time and opens space to utilize for other products or storage. Even if a company needs a special size of pallet, Hope Timber can help with particular and custom specifications to tailor to the product.
IMPACT FROM THE ENVIRONMENT: How is this environment contributing to the situation?
Trees can only grow so fast. While we continue to cut down forests at increasing rates, the products are not produced overnight. In addition, there have been insects that have destroyed almost 15 years of the growth of lumber closer to Canada and the border. Unfortunately, the devastating fires have created another major impact on the shortage of lumber and growth for the future in general in those areas.
THE POSITIVE SIDE: What good can come from this?
Recycling of lumber such as pallets has become more prevalent and helps the environment as well. The more we recycle in general, the faster we can slow down the demand for materials such as lumber. There are also alternatives being created, such as:
- Wood framing — Wood is recycled, such as particle boards from what is already available.
- Concrete — 3D printed homes are becoming popular along with precast panels or even insulated concrete.
- Metal — Steel framing is still uncommonly used and can be challenging but people are starting to make homes out of old shipping containers.
- Environment — Earth-mound homes are becoming more popular in real life and not just what you might see in the movies.
- Combinations — Builders are starting to get creative and combine particle board and insulated foam for creating the ultimate in energy efficiency.
THE FUTURE: What is the bright side?
This unusual situation will help pave the way for recycling more and also tapping into innovation. Right now, there are people and companies coming up with amazing ideas and new technology that will help combat the shortage and cost reductions that will revolutionize the building industry. With the bad, there is also good. As humans, and as a society, we have learned to adapt to the ever-changing world and do the best we can to try to have a better future for all forms of life.
If you are interested in more about how you can find pallets or find out more about paving the way for a different future for utilizing a no-waste solution with wood, please contact us Hope Timber Pallet or call us at (740)344-1788.