New Zealand’s timber supply chain is under pressure from two directions simultaneously. Diesel prices have surged to around $2.30 to $2.35 per litre at wholesale, representing approximately 80% growth, while international shipping rates from sources including China have risen by more than 30%. The combined effect is being felt across harvesting, transport, and port operations in the forestry sector, with direct consequences for builders and contractors who depend on reliable timber supply.
How the Cost Pressures Flow Through
Timber harvesting and transport are among the most fuel-intensive operations in the supply chain. Log trucks, harvesting machinery, and the diesel required to operate processing facilities all feed into the delivered cost of timber products. When fuel prices move as sharply as they have in recent periods, remote and low-yield forests become economically marginal or unviable to harvest, and some regional operations in South Canterbury and the Central North Island have already felt this effect.
Higher transport costs from offshore sources, particularly for engineered wood products and laminated veneer lumber (LVL) manufactured from offshore feedstock, compound the domestic supply pressure and can flow through to pricing with limited warning.
Three Practical Risks for Builders
For construction businesses, the timber supply situation creates three categories of risk. First, supply constraints: the availability of seasoned structural timber, particularly from export-focused regions, may tighten, leading to extended lead times that affect project scheduling. Second, price increases: higher transport costs are being passed through to delivered pricing across radiata, LVL, and engineered timber products. Third, allocation tightening: larger-volume purchasers, including national frame-and-truss manufacturers, may be prioritised by suppliers, which can squeeze smaller builders and those relying on independent merchant yards.
How to Manage the Risk
Builders and contractors can take practical steps to reduce their exposure. Incorporating increased fuel and freight allowances into tender pricing rather than using historical benchmarks is the starting point. Where suppliers are willing, securing fixed or capped-price supply agreements for key materials reduces exposure to mid-project price movements. Placing orders early for high-value components such as framing packages and engineered timber products, rather than ordering as needed, reduces the risk of supply delays at critical stages of a build.
Communicating openly with clients about timber pricing and supply conditions, and building appropriate allowances and escalation mechanisms into contracts, protects both parties from the worst outcomes of a volatile supply environment.
Explore more supply chain and materials guidance from New Zealand’s construction sector, or connect with timber merchants and suppliers in your region.
