Transportation shortages still massively challenge lumber traders

Logistical nightmares and truck driver shortages slow lumber and structural wood panel delivery

Originally published by Fastmarkets Random Lengths, February 9, 2022

Operating for the past two years under the Covid-19 pandemic has presented myriad challenges for wood products traders, but transportation problems have vaulted to the forefront of buyers’ and sellers’ lists of frustrations.

Veteran traders, many who have spent 25 years or more in the industry, have commented that they can’t remember a time when they’ve dealt with more transportation-related headaches.

Whether it’s due to the lack of railcar supply or reduced truckers on the road, getting product to market has been an extreme challenge at all levels of the distribution pipeline. “The logistics nightmare we have keeps getting worse,” said a mill salesperson in Eastern Canada.

The logistics nightmare we have keeps getting worse.

“It doesn’t feel like an end is in sight. It’s been compounded with the bad weather we were having the last couple of weeks.”

Numerous lumber and structural panel mills in Canada have complained recently about the limited number of railcars they are receiving from CN Rail. Some OSB mills have canceled or reduced contracts with customers, with railcar shortages noted as a key problem.

CN Rail issued the following statement this week: “CN remains committed to work with customers and supply-chain partners as recent extreme weather in Western Canada, along with North America wide supply-chain challenges have impacted cycle times for railcars used in the wood products industry. We understand the frustration felt by our customers and we continue to do everything in our power to get their goods to market as quickly as possible.”

With demand often running ahead of supply in many lumber and structural panel products, some mills are adding two to four weeks to arrival times on top of their current order files. “Mills are already three to four weeks behind,” said a wholesaler in the West. “I don’t see any way this gets resolved quickly.”

Some traders have hope that as weather improves railcar supplies will pick up. The long-term outlook regarding the shortage of trucks is more troublesome. “I don’t want to be an alarmist, but trucking is a problem we’ll have to deal with for years,” said a mill salesperson in Eastern Canada.

I don’t want to be an alarmist, but trucking is a problem we’ll have to deal with for years.

The American Trucking Associations (ATA) estimated last year that the truck driver shortage would hit a historic high of over 80,000 drivers. That trend worsened when electronic log requirements went into effect, and it’s shown few signs of abating.

Truck shipments across the U.S.-Canada border have worsened recently with the requirement that truckers show proof of vaccination. Protests have grown regarding those regulations, with blockades snarling traffic in Ottawa and on the bridge connecting Windsor, Ont., to Detroit.

While those are short-term impacts on trucking, the longer-term prognosis is gloomy. ATA projects that if current trends persist, the shortage of truck drivers could surpass 160,000 in 2030.

What to read next
Africa’s first transcontinental rail network, known as the Lobito Corridor, which aims to eventually connect almost the entire regional copper-cobalt belt with additional links across sub-Saharan Africa, is on track to break ground early in 2026, a senior official at the US Department of State told Fastmarkets.
Reducing reliance on China’s hugely successful critical minerals supply chain dominance was never going to be easy, as some western mining companies are finding out the hard way.
Access our expert analysis on the key factors impacting the softwood lumber market in the first quarter of 2025.
Read everything you need to know about US containerboard price increases in January and how they will impact the market.
European imports of pipeline natural gas from Russia via Ukraine have ended, putting the region’s metals smelters and refineries on alert for potential hikes in operational costs.
Read the December edition of our pallet newsletter, exploring how the holiday rush and looming port strikes impacted pallet prices.