Resilience: COVID-19 and the forestry and timber value chain

The "Resilience" project examined the coronavirus crisis and its impact on agricultural and forestry value chains in Austria. In particular, initial lessons were learned from the Covid-19 crisis. The Austrian Energy Agency was responsible for the analysis of a sub-project on forestry and wood, in particular for linking wood flows with monetary data from WIFO. In addition, a picture of the mood among forestry companies and logistics companies was created with regard to the effects of the coronavirus crisis.

The project revealed the complex interdependencies of the forestry-timber value chain and the challenges of data homogenization. Overall, it can be stated that the (physical) wood flows and the (monetary) industry data cannot currently be reconciled to a large extent, partly for reasons of confidentiality. The sectoral classification of the industries largely does not coincide with the raw material or product classification of the wood flows, which makes it difficult to intersect the data fragments. A comprehensive harmonization of the data is associated with a correspondingly large effort.

Effects of the corona crisis

The following subject areas were also examined using surveys: effects of the Corona crisis on operations, adaptation measures, digitalization in operations, effectiveness of government aid programs, the company's resilience to crises and assessment of future company development. The results should be understood as a snapshot within the industry. A mood report by the Austrian Wood Industry Association drawn up in October 2020 already found that the effects of the Corona crisis had different effects in the individual sectors. This was confirmed by the survey within the wood logistics sector carried out as part of this project.

Differentiated picture: Negative, no or positive impact

While micro businesses noted little to no impact from the Corona crisis, small businesses, in contrast, reported negative impacts. Above all, declines in orders, loss of workers, price declines and higher costs for operating resources were recorded. In contrast, a large company (>250 employees) reports “strongly positive” effects of the Corona crisis. According to the company, these included increased demand (particularly for regional products and therefore local transport, i.e. short routes with high transport volumes), the increase in orders, increased appreciation from customers, and increased flexibility of supply chains through the creation and use of Alternatives. The government aid measures were consistently rated as “somewhat helpful” to “very helpful” by all survey participants.

Making the business more flexible

All companies cited making their operations more flexible as an adjustment measure. While large companies cited diversification of supply as an adjustment measure, small companies cited concentration on a few operating and logistics branches and regions as a strategic adjustment. The crisis consolidation of companies was generally rated between "moderate" and "very strong".

Digital measures have so far been given little or no consideration by micro-businesses, regardless of the crisis. However, monitoring operational systems via the internet and regular online searches for information have been used for operational purposes for some time, even before the crisis. Small and large companies were already using digital tools before the crisis. Online customer acquisition and increased digital communication were also indicated as a result of the crisis.

Recommendations for action

Recommendations for action on two topics are derived from the current study:

Data collection and monitoring of the forestry and timber industry, as well as the use of by-products

• Unification of the reference basis for primary data
• Increased spatial resolution of primary data
• Targeted classification and recording of wood by-products

Supporting the timber logistics industry to improve operational resilience

• Development of strategies for better digital networking
• Further training programmes for the expansion of internal controlling, the possible development of equity capital and making operations more flexible
• Information campaigns on government aid and measures (e.g. forest fund)

WIFO (Austrian Institute of Economic Research)

BML (Federal Ministry of Agriculture, Forestry, Regions and Water Management)

(Former Federal Ministry of Agriculture, Regions and Tourism - BMLRT)

Client	BMLRT
Project management	DI Bernhard Wlcek
Project partner	WIFO
Project duration	January 2021 to April 2021