Depending on Independence – The Forest Industry Supply Chain
I am not aware of another industry with a supply chain as dependent on independent contractors as the Forest Products Industry. Three of our most important links – harvesting, transportation, and reforestation – are predominantly performed by independent contractors.
These individuals put a lot of blood, sweat, and tears into their operations. They are subject to the risk of weather and markets, as well as ever-changing regulations and sustainability requirements. And for many of these contractors, the financial investment is huge. Currently, these independents face tremendous headwinds, and the entire supply chain needs to rally to help where it can.
Tree planting and other silvicultural contractors are facing a lot of uncertainty from a labor perspective. These contractors utilize guest-workers, as history has shown that U.S. citizens have no interest in performing this necessary work. It takes much time and attention to detail to manage the process of getting these workers. And if the uncertainty associated with the recent change to a lottery system for obtaining workers was not bad enough, these workers are now banned from entering the U.S. for the remainder of the year. We have millions of trees in our nurseries today that need to be planted during the next planting season. This allows us to ensure sustainable supply and meet our environmental commitments. Our goal is to educate the administration and our legislative representatives on how critical these workers are in order to get this corrected for both the short and long-term, as soon as we possibly can. Are we going to plant trees this season? Maybe is not an acceptable answer.
Moving on to the critical supply chain links of harvesting and transportation, we are seeing devastating impacts on some markets due to the COVID-19 pandemic, as well as ongoing negative market trends in certain segments. While the results are not universal, many, if not most, of our independent contractors have been impacted to some degree. In some regions, contractors have been with no markets for months. In other regions, there is an imbalance of markets for the different products from harvest sites, which has detrimental impacts on efficiency. The financial impacts for these contractors range from mild to severe to catastrophic. While there are some programs available for financial assistance, I bet that our contractor force just wants to work. As we all fight to get through this pandemic, history has shown us during challenging times that the best practices are to communicate with your suppliers as much as possible and identify opportunities that will help to keep the supply chain strong in your area. The one thing we know for sure is that we will need a viable contractor force on the other side.
Lastly, the staff at FRA wishes everyone a safe and happy Independence Day. Enjoy!