Industry Insight

Logistics associated with (waste) wood

Wood shavings, bark beetles and value added along the supply chain

Large numbers of people have become real do-it-yourself fans during the Covid-19 pandemic. Many of them have used the enforced break as an occasion to complete projects that they have postponed for a long time, ranging from work in the kitchen to work on the garden shed. But there is one material in particular that has been the subject of much attention, mainly because people have had to wait so long to get hold of it over the past few months: wood, it seems, has become a really scarce commodity.  

However, there are all sorts of different types of wood. In addition to timber cut to size in the form of planks or sections, there is also what is known as waste wood, which is used to make cellulose, paper or pellets, for example. Freight forwarders and traders fulfil important tasks along its supply chain. This interview with Olaf Mohrmann, the Managing Director of Rhenus Forest Logistics, reveals the benefits that these services create for sawmills and customers, and the role that sustainability and the (alleged) raw materials crisis are playing.

Regardless of whether commerce, logistics, storage or processing is involved: everything in your business revolves around wood – or, to be more precise, waste wood. What exactly does this mean?

Waste wood is the term used for excess wood that results when trees are cut down in a forest or when wood is processed at a sawmill, for example. The bark is removed from so-called round timber at sawmills and the wood is incised. About 60 per cent of it is supplied to do-it-yourself markets or carpenters as planks or timber of particular lengths. The remaining 40 per cent involves wood shavings and sawdust – and these are precisely the products that we transport and use for commercial purposes at Rhenus Forest Logistics, e.g. transporting it to customers that produce paper or wood-based materials, or that generate energy. As a service provider, we make an important contribution here to ensure that the supply chain runs as smoothly as possible.

What makes Rhenus Forest Logistics stand out as a service provider?

On the one hand, we’re the largest and only nationwide freight forwarding company that specialises in waste wood in Germany. Our headquarters are located in Bielefeld; but we have other business sites in Ellwangen, Plaidt, Luxembourg and Switzerland. This means that we cover the Federal States of Hesse, Rhineland-Palatinate, North Rhine-Westphalia and Baden-Württemberg as well as neighbouring countries. On the other hand, our business also involves a trading component, whereby we ourselves act as a buyer and sell waste wood as drop shipments. This may mean that we travel to a sawmill twice on the same day and pick up goods for the same customer – either as a trader or as a freight forwarder.

What benefits does this division of business provide for the sawmill and its customers?

First of all, it’s important to state that waste wood is a mass product. A fairly large sawmill requires about 500,000 tree trunks every year – and the volume of waste generated by the processing work is consequently very high. If it continually accumulates, it can impair production. It is therefore our job to regularly drive to the sawmills. It’s a benefit for the managers to work with a large logistics specialist like Rhenus so that they can be certain of having reliable disposal operations. We have our own fleet of vehicles consisting of one hundred 40-tonne trucks with special equipment and we only use our own employees to drive them. Anybody who phones us knows that we’re absolutely dependable and will turn up the next day. Customers also benefit from the fact that we can replenish any gaps in the supply chain and compensate for any temporary and seasonal fluctuations.

How do you manage to compensate for these fluctuations when there’s also a shortage of raw materials?

Our principal goal is to deliver quantities of raw materials on time – or ‘just in time’, in line with our customers’ specifications. Pellets are a good example of this: wood pellets made from waste wood have become increasingly popular as a fuel over the past several years. This means that the level of demand in autumn and winter increases dramatically. However, this is also the time when sawmills produce somewhat less. By drawing up plans for requirements with the customers at an early stage and clarifying the origin of the material, we can circumvent the discrepancy between supply and demand. But if there aren’t enough supplies available, we may need to use national distribution services, e.g. inland waterway shipping, which we utilise if the need arises. If there are excessive amounts of wood available, we seek to create a national balance. In principle, however, we make it our aim to deliver wood within a radius of no more than 200 km; ‘from the region – for the region’. After all, we focus on regional sawmills and forests – and handling them responsibly; this is all part of sustainable forestry.

You’ve mentioned the key word ‘sustainability’: how do you handle this topic as a logistics services specialist?

If we look at the global timber industry, there are still too many forest areas that are being completely cleared, as in Brazil, for example; this involves tropical timber. Certification programmes such as the Programme for the Endorsement of Forest Certification Scheme (PEFC) and Forest Stewardship Council (FSC) specifically try to prevent this. They conduct a stock-take at the forest owners’ sites – and these may be local authorities, federal states or private forest owners. They are only allowed to remove the amount that has grown during the year and must guarantee that they conduct reforestation. They then receive appropriate certification, which informs end consumers that they’re not purchasing any tropical wood or wood from deforestation sources. There must be an end-to-end chain of custody in place: ranging from sustainable business by the forest owner to the logging company and the sawmill and even the waste wood trader and the end consumer. We have to fulfil this requirement nowadays as a logistics specialist.

We’re repeatedly hearing about a raw materials crisis. Why has wood become a scarce commodity?

We need to make a clear distinction here: it isn’t the wood itself that has become scarce, but the sawn timber. This is naturally partly due to the Covid-19 pandemic, which has led to restrictions caused by short-time working and breakdowns in production. However, the plague of bark beetles in 2020 has affected us to a much greater degree. We’ve had several very dry summers, one after the other. The high temperatures and the low amounts of precipitation have already significantly weakened the trees. They’ve also created favourable conditions for bark beetles to reproduce billions of times over. This infestation has particularly affected fir and spruce trees, which are the types of trees that are most commonly processed in Germany. This has meant that trees have died and then fallen over at some stage.

How has this situation affected your business?

The infested trees have to be cut down. We’re talking about huge areas of forests here with trees that are 50 – 60 years old and nothing more will grow back here for the time being. Fortunately, the wood is still good enough for further processing. This means that there’s a real glut in the marketplace. At the same time, the demand for timber products has grown enormously in China and the USA. That actually sounds like a win-win situation for the sawmills, which can purchase the raw material cheaply and sell the sawn timber at higher prices. However, the demand is so enormous that it cannot be met. Following an increase in demand on the German domestic market, too, we currently have long production and waiting times for end consumers. On the other hand, if the goods are shipped abroad, the shortage of containers and logjams associated with them hinder smooth operations along supply chains.

How do you believe the market will develop in the short and medium term?

We’re noticing at this time that the level of demand is slowly but surely drawing close to the level of actual supply. The economic cycle is recovering in the states; our new German government will also invest heavily in areas such as energy efficiency. At the same time, wood is becoming more and more popular because of its properties as a building material in the home. More modern ways of building, e.g. wood frame constructions, are in demand. We’re therefore optimistic about the market. However, it’s also clear that the bark beetle plague has done enormous damage to the timber resources in Germany. New flows of goods will open up – but we’ll have to evaluate them with our customers to determine which ones they’ll be. But one thing is clear: wood remains a fascinating material.

About Rhenus Forest Logistics:

Rhenus Forest Logistics provides logistics services associated with wood as a raw material. These include commercial activities, logistics, storage and processing by-products from sawmills such as sawdust and wood chips as well as handling recycling, energy and industrial wood directly from forests. The logistics specialist therefore supplies many long-standing customers in the paper, wood-based materials, energy and soil production sectors.

Would you like some more information?

Are you looking for a partner for wood? You will find plenty of interesting information about the services provided by Rhenus Forest Logistics here.

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