The combination of fewer allowable cuts in British Columbia and a recovery in the housing sector in the United States has demand for lumber at an all-time high.
Ed Kulcsar, vice-president of Woodlands with Spray Lakes Sawmill, said that forecasters could have never predicted that numbers would climb this high.
“They sell lumber in what they call 1,000-board foot measure,” he explained. “Right now prices are $1,000 a board foot… Typically this time of year we would see 400/1,000 so we’re easily double that.”
In addition to lumber prices tripling year over year, one lumber distribution company said that customers could see even more of an increase after a program implemented by Canadian Pacific Railway added even more fees to ship lumber.
In December, Centurion was told by CP Rail that it was implementing its equipment guarantee program. CP said it was designed for when demand for intermodal was high.
Intermodal transport involves the transportation of freight in an intermodal container (also known as a shipping container or Seacan) or vehicle, using multiple modes of transportation such as truck and rail, without any handling of the freight itself when changing modes.
In December, Centurion was told it would be an additional $250 per intermodal container. Then on Friday, the company was sent a memo saying, as of Monday, that fee was going to double, to $500.
Manager Tom Casey said that there wasn’t much option for the company if it wanted to ensure its clients received shipments on time.
“Right now we probably have 100 containers to go to Ontario and Quebec,” Casey said. “That’s going to be $50,000.”
Brian Casey, who manages sales, said that because the orders had already been processed, the company had to pay the expense out of pocket, but in the future it will mean an even larger increase to the customer.
“We have to build that cost into our sales and unfortunately that trickles down to the consumer,” Casey explained.
In a statement to Global News, CP said:
“CP’s equipment guarantee program has been in place since 2019. CP is currently experiencing a high demand for intermodal containers across the network.
“CP’s equipment guarantee program only applies to a small amount of CP’s intermodal equipment fleet, is optional, and gives customers an additional avenue to secure intermodal equipment during peak demand. This program is available to all commodities shipping in 53-foot containers.”
Centurion Lumber would like to see more ministerial regulation as it said that there are only two rail options for those that ship lumber across the country.
The company said it had reached out to the minister of transportation in hopes that it would reach out to the federal government.
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