As We See It... Next Generation? Part 2
In my previous article, I discussed how many of us got into logging and some of the challenges facing today’s loggers with respect to where the next generation of loggers is going to come from. It’s apparent that I’m not the only one concerned with the future of logging because I got a lot of feedback and comments from that first article. Obviously, this is a dialogue that we need to be having now and that we can’t afford to keep pushing it aside. In this article, I would like to explore some possible solutions to the looming shortage of loggers, but I must admit; however, describing the problems is much easier than trying to come up with solutions.
The American logging industry is a highly competitive business with both the producers (loggers) and the purchasers (mills and timber companies) having the same goal; get the highest production for the lowest cost. In order for companies to remain in business, they’ve had to find the most efficient ways to get production, usually a combination of new equipment, innovative techniques and trained crews. Although popular in other countries, government regulations, subsidies and artificial supports are not the path to future success in the American logging industry. We, the entire timber industry, need to come together to continue to be able to profitably compete in a global marketplace. Unfortunately, logging is the weak link in the timber supply chain.
When we start looking for solutions, I think that part of the fault falls upon us loggers. In the past when a forester complained that our bid was “way too high,” we have been far too quick to acquiesce. As a group, we tend not to be complainers. We simply keep on going and do the best we can with the situation we find ourselves in. When we are told that we will have to do more with less, we simply shrug our shoulders and say OK. This is part of our problem. We are way too resourceful for our own good. At some point, we are going to have to learn to stand up for ourselves better, to get what we need to be able to stay in this business.
The people we work for are also part of the problem and they will need to be part of the solution. A recently-retired forester’s comments accurately describe much of the attitude in our industry. He said that, during his career, he was always told to “make sure the loggers don’t go broke but don’t let them make any money either”.
In my opinion, the primary solution is more money. In general, the logging industry is grossly undercapitalized, with insufficient resources to successfully weather the extreme ups-and-downs common to logging. We are running on the tightest margins in the memory of this industry. Equipment and labor are our two major expenses and 2 of the 3 reasons that we remain successful. If loggers made more money, we would be able to acquire and maintain the best, most innovative equipment and to attract and retain the best, most talented labor. With more money flowing through the pipeline to loggers, the entire timber industry would be stronger and more profitable.
Quality equipment is a key requirement for all loggers. Logging has changed over the years and the equipment we need now is much more expensive and complex. The first challenge is to acquire that equipment. Financing is almost always required. Unless a
company already has years of experience under their belt and owns a lot of equipment, financing, particularly at a decent rate, is almost impossible to get. The next challenge is to maintain these fine-tuned, complex machines. The simplest repairs are extremely expensive and a logger may need financing for larger repairs to his equipment because he no longer has the liquidity that he had even 10 years ago. I have heard talk of timber companies helping with financing. For some, that could be a good solution; however, I’m not a big fan of being beholden to someone I am working for. It changes the relationship in a very fundamental (and not good) way because now the timber company “owns” that logging company.
Trained crews have always been a key element of a successful logging operation. Loggers used to be middle to upper middle class people. One of the members of Associated Oregon Loggers analyzed compensation from the late 1980’s through 2012. He discovered that hourly compensation had risen only 1.7% annually over 30 years, significantly below the rate of inflation. If formal data had been available from the early 1980’s (right before the early-80’s recession), it is estimated that current compensation would have actually decreased during that time span. This failure to keep up with the cost of living has resulted in a majority of loggers now no longer making a middle-class wage. Given the state of our industry, it is a wonder that anyone would choose to get into logging. Out here in the west, we compete directly with construction and the oil and gas fields. In those industries, unskilled workers make at least $10 more per hour than many of our highly-skilled operators. That’s for work that, in many cases, requires less skill, is much less physically demanding and is much less dangerous. This makes it really tough to find enough qualified people to work in our industry. At times, we struggle to hire people who can simply pass a drug test, much less actually be qualified. If logging is going to continue to be a viable industry, people coming into the industry need to feel like there is a future for them.
Many of us have heard from timber company representatives that when times are bad, “we’re all in this together and we all have to make sacrifices.” We understand and agree with that. The problem is that when times are good, suddenly we’re not “all in this together” anymore and we don’t get our share of the profits. Going forward, as the economy improves and wood products become more valuable, logging prices will need to rise, to allow loggers to share in the “good times” so that we have the necessary resources to build the infrastructure that will be required to support a healthy timber industry.
The final part of the solution is effective training programs for loggers. Currently, for loggers to stay certified, they must attend ongoing training classes. The subjects covered range from human resource issues to the latest in logging technology and forest practices. One of the biggest training needs is in becoming more competent managers and financially-knowledgeable business people. In this day and age, we must know how to accurately bid jobs which calls for a thorough understanding of and the ability to project expenses. A surprising number of loggers don’t have a good handle on what their costs are. Often times, they don’t know if they are on track to make any money until the job is more than half way done. An additional opportunity is in developing computer software customized to the logging industry. With improved financial training, we can learn to stand up for ourselves when that forester tells us we “need to sharpen our pencil” and confidently defend our numbers, justifying the costs of what it takes to run a highly-efficient logging operation.
For the time being, logging operations continue to limp along. The best operators are still in business and will continue to be until they retire. As more and more operators retire, those of us who remain should reap incredible rewards because there will be fewer loggers available for so much work. After we retire, then what? Logging is not something easily taught in a classroom. There is no real substitute for putting your time in, on the job. Virtually all of us learned the business of logging at our father’s knee, going up to the job on weekends and logging during summer vacations. It has taken decades through the school of hard knocks to teach the current generation of operators how to be successful loggers. Regrettably, that path doesn’t exist anymore in the 21st century.
In the end, the solution is money. If we continue to push viable solutions down the road, it amounts to slow suicide for the logging industry with a huge loss of infrastructure and a crisis for the entire timber industry and our consumers. The big question is, do they pay us now or pay us later? I believe that the former would be the wisest choice. If young people are able to see that there is “real money” in logging, then the question of where the next generation of loggers will come from may simply disappear.
Mark Turner owns and operates Turner Logging located in Buxton, Oregon. Mark serves on the ALC Board of Directors and is the Western Regional Delegate on the American Loggers Council Executive Committee.
The American Loggers Council is a non-profit 501(c) (6) corporation representing professional timber harvesters in 30 states across the US. For more information, visit their web site at www.americanloggers.org or contact their office at 409-625-0206.