As one of the countries producing pulp, paper and sawn timber products, Sweden exports nearly 80% of its forest products every year and is highly dependent on shipping and other logistics transportation. Since the Red Sea attacks, European countries including Sweden have also experienced supply chain uncertainty and increased transportation costs.
It is reported that one-third of the cargo ships transported by Sweden through the Suez Canal are forest products, but now the transportation cost has unexpectedly increased by 100% to 200%, Christian Nielsen, a wood products market expert at Swedish Forest Industries, said: If the shipment does not go through the Suez Canal but chooses to take a detour through the Cape of Good Hope, it may take an additional 30 days than originally planned.
According to analysis of Sweden's past forestry export data, about 10%-15% is shipped to the Middle East and Asia through the Suez Canal and the Red Sea. Under special circumstances, increased transportation costs are an unavoidable problem for Asian buyers. Many Swedish wood product suppliers are already negotiating with customers to share the increased transportation costs.
Although the local cost price of wood and paper in Sweden has not changed significantly, in an inflationary economic environment, the original profit margins of suppliers planning to export will decline. The current situation is likely to continue for some time, with increased competition among suppliers in other parts of the world amidst rising costs and extended delivery dates.