Fuel crisis hits timber supply

A sharp spike in fuel and freight costs is putting serious pressure on our logging and timber industry – and that squeeze is starting to show up in quotes, lead times, and delivered‑to‑site timber prices for builders and trade contractors.

Diesel prices have surged roughly 80% in recent weeks, with wholesale diesel now around $2.30–$2.35 per litre, while international shipping rates from key sources such as China have jumped more than 30%.

Logging and haulage are deeply tied to fuel: harvesters, forwarders, log trucks, and port operations all rely heavily on diesel, so rising input costs quickly erode margins.

Forestry companies report that some remote or low‑yield forests are already becoming uneconomic to harvest, and many are warning they may need to scale back operations or even shut down parts of their business.

For those on the tools, the impact is threefold. First, there is a risk of tighter supply and longer lead times for seasoned structural timber, especially in regions where export‑driven forestry, such as South Canterbury and parts of the Central North Island, feed local and national supply chains.

Second, higher freight costs are being passed through to delivered‑to‑site pricing, making pallets of radiata, LVL, and engineered products more expensive and more volatile from month to month.

Third, if the fuel‑price environment persists, some mills and distributors may prioritise larger volume buyers or tighten allocations, which can squeeze smaller builders and independent contractors who rely on local merchant yards.

To navigate the current fuel‑linked environment, builders and contractors should treat timber and transport pricing as inherently more volatile than it was a year ago.

That means building in larger fuel and freight allowances when tendering jobs, and, where possible, locking in fixed or capped‑price agreements with preferred timber merchants and structural suppliers.

Early ordering of high‑value items, such as framing packages, trusses, and engineered products, can help avoid last‑minute supply‑chain shocks and keep projects on schedule.

Over the longer term, the fuel crisis is also sharpening the business case for leaner logistics, smarter sequencing, and design‑for‑manufacture approaches that cut unnecessary trips and reduce waste, turning today’s price pressure into a driver of more efficient timber use.