by Jim Rice, on March 24, 2021
Have you been to your local lumberyard or Big Box store to buy wood products in the last few months? The days of $15 sheets of good old 4’x8’ OSB are a distant memory. The price for the same item at the end of 2020 was $22.85. By March of 2021 the price skyrocketed to $30.65 per sheet. What’s going on here?
According to the weekly-updated Random Lengths Lumber Composite lumber prices are up 180% since the start of the pandemic and continuing to rise.
A few of the causes:
- Covid-related mill shutdowns
- Transportation ‘a nightmare’ with many trucks moving to more lucrative loads
- Busy hurricane season
- Wildfires throughout the West
- Surge in home renovations and DIY projects
- Strong housing market partly fueled by record low interest rates
As you know, consumer and B2B purchasing behavior in 2020 was erratic (to say the least). Your most researched and thoughtful strategies and plans were probably turned upside down a few times last year. That was certainly the case here at Reusability.
We purchase multiple truckloads of lath shelving for our Rental EZRack program and OSB sheets for customers who purchase EZRacks outright. Because we always focus on providing the best value to our customers, price volatility in our supply chain is troublesome. In the past we have offered OSB shelves to our customers as a convenience. In most cases nurseries have been able to source this material locally at lower prices. Not this year.
Wood supply became unreliable in mid-March. Loads that typically take 7 days to fulfill suddenly took 15-30 days. Last summer, when we were unable to procure our standard 7/16” OSB shelves at both our Florida and California facilities, we made the decision to offer the much-higher-priced lath shelving to those who purchased EZRacks at no additional charge.
Ours is just one example of a company making hard decisions in order to maintain operations amidst the chaos created by the lumber markets over the past 13 months. And those markets are expected to grow through 2021. However, some industry analysts predict price corrections will come later in the year, provided successful vaccination campaigns can relieve some of the Covid-created market pressures.
While we at Reusability will continue to leverage our buying power and market focus to provide our products at the best possible prices, we also recognize that the ripples created by these market conditions continue to exacerbate problems across multiple industries. In many cases, there is a newfound opportunity to consider replacing wood transport packaging with reusable alternatives, which is something many customers who rely on us for reverse logistics and returns management have undertaken in the past year.
There is no single solution for managing the continuing lumber crisis. All we know is that the days of cheap lumber are gone for the foreseeable future.
If your company is looking to move from wood to reusable transport packaging, get in touch to see how we can help cut your costs and waste.
