Price changes due to increased import and shipping costs

Dear valued customer
Price changes due to increased import and shipping costs

You have no doubt seen very high increases on a variety of products in the building industry over the last 3 months.

Ply boards and OSB, glues for our manufacturing process and some hardware items have been severely affected.

The very strong recovery in the North American economy has resulted in high demand for building materials and other goods. This has put great strain on the shipping industry to supply enough containers and ships to move all these products to the US.

Container costs have risen by 400% over the last 3 months as the shipping industry struggles to restart after the slowdown caused by Covid lockdowns in 2020. This has also resulted in large delays in shipping aided by the inefficiencies and costs experienced at Cape Town harbour.

Combined with this, we have had very high increases on ex-mill prices for boards and timber imported from Brazil, Malaysia and Russia. One of our recent import orders has had 3 increases totalling 95% over 2 months on an already confirmed order. This is unprecedented in our 27 years of business!

These large price increases have also resulted in many suppliers purchasing as much stock as possible, further compounding the shortage problem.

Somerset Timbers have always been stockists of large volumes of timber, and we avoid a just in time purchase policy to make sure our customers get what they need. Did you know that we stock on average 2500 cubic metres of timber? This equates to 46 full interlink trucks, giving us a large buffer stock and allowing us to minimize price increases. Our independence also allows us buying the right quality product at the right price.

We are hoping for the shipping and supply economy to normalise over the next 6 months which will then allow a reduction in prices.

We wish everyone to be safe and healthy during these difficult times.

Yours faithfully
Malcolm Wetmore
Director