The Green Gold How do transport costs affect the Swedish forestry industry? A quantitative study of Swedish forest exports 1995-2025

Abstract

The forestry industry accounts for around 10–12 percent of total goods exports in Sweden. Because forest products are bulky and low in value per tonne, transport costs make up a large share of their delivered cost. This makes the sector a natural case for studying how shipping costs affect export performance. The thesis examines how transport costs, measured by the Baltic Dry Index (BDI), affect Swedish forest export volumes, measured by HS44 (Wood and Wood products) from 1995 to 2025. The study uses quarterly data and an OLS regression in a log-log form, with controls for EU industrial production, the SEK/USD exchange rate, oil prices and seasonal patterns. The result of the study is that the Baltic Dry Index has a statistically significant positive association with Swedish forest export volumes, with an elasticity of about +0.098. EU industrial production is the strongest single driver with a coefficient of +0.835. Thus the positive BDI coefficient most likely reflects shared global demand conditions rather than a direct cost effect, since shipping rates and forest exports both rise when global activity is high.