From the Building Blocks column in the May/June issue of Timber Harvesting magazine.
There are a lot of moving parts involved in running any type of business, but this is especially true in logging. You make big investments in equipment and in training and retaining good operators. You carry insurance, incur big fuel bills, fork over a lot for repairs, may be involved in trucking, and sometimes may lose sleep at night trying to keep track of it all.
Given all these moving parts, how can you keep accurate track of everything so you can run a profitable operation?
To succeed you need well-maintained equipment, follow productive harvesting and hauling methods, and rely on competent, dedicated employees. But there is one not-so-obvious asset critical to financial success: a well-designed software system to track core business information such as job type and characteristics, compensation, load tickets and time sheets. A good software system is like a good business partner—you come to rely on it to tell you the unvarnished truth about how your business is doing and where you need to improve.
General accounting package such as QuickBooks or Sage 50 are great for the big picture tracking of revenues and costs, but are not designed to incorporate the detailed information that an astute logger needs to understand business economics. Nor do they provide the checks and balances needed for ensuring that you are paid for all the wood you harvest.
Managers at Hadaller Logging in Kelso, Wash. understand just how valuable it is to have an industry-specific software tool to supplement an accounting package. They adopted Caribou Software’s Logger’s Edge system four years ago, primarily with the objective of tracking weekly production and paying truckers, but they have come to rely on Logger’s Edge for much more.
By: Nick Carter, Agency Manager, Forestry Mutual Insurance Company
Not a day goes by that I do not receive a call about some company’s commercial auto premiums increasing. This cycle starts with the logger or log trucker who is experiencing the pain of his operating cost falling into negative territory. Comments I hear include: “I cannot find acceptable drivers,” “I cannot find reliable contractors,” or “My insurance costs are driving me out of business.”
Timber is not purchased at $20/ton and sold to mills for $15/ton. It is simple math. Losses, lawsuits, medical and underinsured/uninsured motorist costs are pushing premiums out of control. Once a claim occurs these costs escalate very quickly and the insurance company has to pay.
Commercial auto carriers are steering away from writing all types of truck insurance. Companies such as AIG, Zurich and Progressive are just a few examples. Carriers will continue to withdraw until the market is profitable. No business should continue to operate with excessive losses year after year.
What is driving these costs and frequencies upward?
Machine Upkeep articles are taken from the archives of Southern Loggin’ Times.
By: Barry O’Leary, Technical Support Specialist, Caterpillar Forest Products
When a machine fails, the result is downtime and repair costs. Making a repair, without analyzing the cause, can result in further costs. Avoid this by following eight steps to gather the facts, determine a sequence of events and then identify and correct the root cause.
State problem—The problem should be stated in a clear, concise manner in two parts: the failed components and symptoms.
Symptoms observed in the component may include fractures, unusual wear or deformation. Note other symptoms that may be related, such as unusual noise or odor, vibration or loss of power. Take care not to state the problem too broadly or too narrowly. Here’s an example of what can happen with a too narrow approach: An operator detected low power, black exhaust smoke and no turbocharger “whistle.” He concluded the turbo was bad and replaced it, but the symptoms persisted. The problem turned out to be a bird’s nest in the air inlet pipe.
Organize fact gathering—An organized analysis will include a list of conditions that could have led to the observed symptoms and failure. Don’t let preconceptions mislead you. If engine bearings get hot and seize, it is reasonable to suspect low oil. However, the problem could be a failed oil pump, for example. Basic equipment for fact-finding should include a flashlight, camera, magnifying glass and filter cutter.
ForesTree Equipment Trader (FET), the premier online platform for buying and selling quality pre-owned forestry equipment and more, is now partnering with JM Wood Auction Co., the South’s leader in pre-owned forestry equipment auctions and appraisals.
JM Wood is providing auction results data for all forestry equipment it sells to FET, which is posting the data on its web site, ForesTreeTrader.com Auction results are accessible in several ways, including as a database searchable by such criteria as year, make, model and selling price range.
“We are really excited about our partnership with ForesTree Equipment Trader,” says JM Wood President Bryant Wood. “The people at Hatton-Brown have always been committed to promoting our industry and we look forward to working closer with them going forward.”
Hatton-Brown owns FET, along with several trade magazines, including Southern Loggin’ Times and Timber Harvesting.
Machine Upkeep articles are taken from the archives of Southern Loggin’ Times.
By: Cliff Caudill, Product Marketing Manager, John Deere
You probably know that there are a couple of reality shows on TV about logging. If you have seen the shows, then you probably remember chuckling (or sympathizing) during episodes where a trucker—usually a rookie—gets a full load bogged down in a poorly maintained section of logging road. Of course, this is followed by many bleeped-out profanities.
But rookie or not, anyone who has worked in the woods knows how important a properly maintained logging road is, or how life-threatening a poorly maintained one can be. Ignoring road maintenance means you are heading down a path that will require road reconstruction. Here is something to ponder: An estimate of typical costs (not site specific) for road grading is approximately $300 to $2,500 per mile, while clearing an area for a new road can cost upwards of $4,000 to $7,000 per mile. By following a proper road maintenance regime you can conserve cash flow and minimize damage to local water and soil resources.
Your first step is to get a detailed maintenance plan in place. Know your land and road systems. Get out a topographical map of your property or aerial photos, if possible. Ask yourself: How many miles of road do I currently manage? Where are the culverts, bridges, streams and steeper terrain? Have an employee drive around the property to assess trouble areas, i.e., places susceptible to slump, or places where water drainage has obviously had an impact. This type of assessment could be done on a monthly basis to ensure action is taken before the problem becomes an expensive one. If possible, you should inspect roads and culverts around current cutting operations more frequently. Sometimes the maintenance is as simple as getting out a shovel and clearing a blocked culvert and other times the required action may be to bring in a motor grader.
By: DK Knight, Co-Publisher and Executive Editor, Hatton-Brown Publishers, Inc.
Organizers and supporters of TEAM Safe Trucking (TST) will gather in Myrtle Beach, SC February 9 to discuss the initiative’s 2016 progress and to address ways to accelerate additional progress going forward. The meeting, which begins at 1 p.m. is open to anyone interested in helping make log/chip trucking safer, more accountable and professional.
TST recently launched a work-in-progress web site (teamsafetrucking.com) and has streamlined internal communications and committee responsibilities to get more done in a tighter time frame, according to TEAM Leader Jimmie Locklear (910-733-3300).
The meeting will take place at the DoubleTree by Hilton Resort Myrtle Beach Oceanfront. This is the same hotel hosting the annual meeting of the South Carolina Timber Producers Association on February 10-12.
By: Wendy Farrand
T’was the DAY before Christmas, when all through the woods,
Not a creature was stirring, all asleep like they should.
The skidders were parked on the landing with care,
In hopes that their operators soon would be there.
The cutters were nestled all snug in their beds,
While visions of tall timber danced in their heads.
I kissed Ma in her kerchief, and donned my skullcap
Then headed to the jobsite, and not for a nap!
When I arrived on the landing, there arose such a clatter,
I sprang from my cab to see what was the matter!
Away to the hardwood, I flew like a flash.
Then I turned on a dime, and fell onto my Ash.
The sun on the crest of the new-fallen snow,
Made me feel I was dreaming with nowhere to go,
When all of a sudden what should I see,
A right jolly old elf peering out from a tree!
By: Jari Mennala, Director, John Deere Forestry Sales & Marketing, U.S., Canada, and Latin America
As the end of 2016 approaches, let’s reflect on the past 12 months and consider how to prepare for the year ahead. As we have addressed in our columns throughout the year, loggers are facing more challenges than ever, from dealing with increasing market pressure to managing employee recruitment and retention.
The multitude of challenges requires loggers to be smart and to adapt to constant changes in the industry. The modern logger doesn’t ignore the past—it helped shape who they are as a business owner—but combines years of experience with new innovations and business strategies to prepare for a successful future.
Cultivate Employees—It is widely known that one of the biggest challenges loggers face is finding good, reliable operators. As more loggers age out of the profession, there are not enough young employees willing and prepared to take over. It is important for the logging industry to not only acknowledge the problem, but also take steps to recruit and train a new generation of employees.
Loggers need to take action to recruit new employees. Consider getting involved with local organizations and work with trade schools to help educate students who may have not considered a career in logging. When new employees are hired, focus on cultivating those employees. Clearly define your expectations and invest in educational opportunities to ensure your workers are not only prepped for the job but also are growing on a professional level.
By: DK Knight, Co-Publisher and Executive Editor, Hatton-Brown Publishers, Inc.
TEAM Safe Trucking (TST), a broad-based, non-profit volunteer group seeking to elevate the standard and performance of the American forest industry’s transportation sector, is moving ahead with its ambitious agenda, according to organizers, who met in early fall to review the progress of TST and to tweak its priorities.
The group launched a web site (teamsafetrucking.com) in October. The web site is being populated with information and tools designed to help TST reach its objective. Its emerging safety-focused program will embrace awareness and education; driver training, skillset improvement, motivation and recruitment; fleet best management practices; and public image enhancement.
The organization expects to expand its program nationwide as it secures additional funding through donations from stakeholders and through grants. At least 10 companies and associations have contributed funds to TST. As well, Virginia Tech University has committed funds and a graduate student to conduct log/chip truck accident research, which is just beginning. The study will help guide TST’s work going forward.
Organizers consist of logging companies, log trucking entities, wood fiber suppliers, paper/wood products manufacturers, insurance companies, and logging and forestry association representatives.
By: Jari Mennala, Director, John Deere Forestry Sales & Marketing, U.S., Canada, and Latin America
Loggers face difficult challenges at every turn. From mill quotas to fuel costs and other business expenses, it is vital for logging operations to be efficient to ensure that they can meet demands and keep cash flowing. However, one of the toughest obstacles loggers face worldwide is recruiting and retaining quality employees. Due to increases in environmental and productivity demands, it is vital to have a skilled and competent workforce.
As much of the logging population continues to age, it is more important than ever that loggers take the necessary steps to recruit, cultivate and retain high-quality employees, particularly since there is a lack of younger people entering the industry. While human resources may seem simple, this is a complex role. However, loggers can still create a robust program that can help them get a leg up in the battle of finding and retaining the right employees.
Employee recruitment can be a difficult challenge for loggers. Skilled workers are vital to a business’ success, but there is a limited pool of experienced candidates to pull from. It is important for you to cultivate employees, starting in high school. Become an active part of your community, helping to garner interest in logging from young people. Because logging is an “invisible business,” many people do not understand what it is. Education is key to helping recruit new employees.
Once new employees are hired, it is important to set standards from day one. It is vital for your company to have an employee handbook that lists expectations, including drug policies, paid time off, holidays and benefits. This handbook provides employee with a clear guide for how they should act as an employee, and gives the employer a standard that they can hold employees to. As a manager, it is important to go over the handbook with employees on their first day, answering any questions and ensuring that the employee fully understands what is expected from them.
