Why We Still Need to Worry about the Logging Sector…
In March of 2022, FRA’s Northeast Region Consultant Eric Kingsley authored a great Woods to Mill article titled “We need to Worry about the Logging Sector”. Eric shared some recent interactions with logging contractors in the Northeast Region and touched on a few driving factors that were stressing the logging sector and the wood supply chain. Inflationary impacts, insurance (coverage and affordability), and an aging trucking workforce were several influential factors he cited in his article. Not surprisingly, most of these compounding factors are still plaguing the logging sector today. And as Eric mentioned back then, “If loggers aren’t healthy, it’s hard for any other sector to be healthy for very long.”
Hatton-Brown Publishers, Inc. periodically surveys logging contractors across the country to get a better idea of the health and status of the logging sector. Their 2024 Timber Harvesting Logger Survey findings were recently featured in the July/August edition of Timber Harvesting & Forest Operations magazine. Yet again, challenging forest products markets and an aging workforce were common themes that surfaced from polling the almost 200 logging businesses that responded to their survey request.
To borrow a common forestry term, the logging sector is most definitely a “mature stand.” Ninety-one percent of the survey respondents are over the age of 40, and even more dire, seventy-one percent are 50 years of age or older. An aging wood supply chain workforce is a well-known issue to most of us, but seeing the results captured in print makes it even more impactful.
Thirty percent of the businesses surveyed rated their company’s financial health as “Poor” or “Very Poor,” a nine percent increase from last year’s survey. This outlook eclipses the number of responders that rated their company’s health as “Very Good” or “Good” (28%). “Fair” was the most common response at 42%. Rapidly increasing operating costs, stagnant compensation, and lower production/quotas were several factors cited for the current business climate.
Most businesses reported operating at 70-90% capacity (38%), with 41% operating at less than 50% capacity. Scaling back operations were also evident among survey respondents, with 38% indicating they had downsized within the last two years. Only 6% reported a business expansion during the same time period.
When asked to identify the most significant challenges confronting business success/profitability, the most frequent topics reported were “Insurance”(68%), “Limited Markets” (62%), “Load Quotas” (57%), “Compensation” (56%), and “Labor” (46%).
Other notable survey findings:
- 89% anticipated a demand decrease for wood fiber in their respective region (pulp, OSB, pellet, etc.)
- 66% anticipated a demand decrease for sawtimber and plylogs in their region
- 57% reported an active attempt to diversify operations away from the industry, up from 33% five years ago. Road building, land clearing, and trucking were the most common categories reported by business owners who recently diversified their operations.
- 85% indicated they would pursue another profession before opting to relocate to stay in the logging business
- 45% indicated they currently have trucks parked due to a driver shortage
- 61% responded they purchase a percentage of the stumpage they cut
- 28% reported employing a forester (or procurement personnel) to facilitate workflow
- 69% reported having employees who routinely operate more than one machine
As for the future of their respective businesses, survey responses were evenly split:
- 35% are still planning to be in the logging business in 5 years and exploring business expansion
- 34% are optimistic about business viability for the next 5 years but have no plans to expand operations
- 31% responded that they were planning to leave the profession within the next 5 years
Some of the comments shared include:
- “I am very concerned about the loggers in our area. We have mills closing down, it is getting harder to find an outlet for wood that you do purchase…”.
- “…rates have remained fairly consistent. Since operating costs have continued to rise especially in the past two years, this has made for extremely challenging times”.
- “Mills are closing and opportunities to negotiate are getting tough”.
As Eric indicated back in 2022, “As with most complex problems, there likely aren’t easy answers here. We’ll need multiple strategies deployed in a variety of ways to make certain the logging workforce remains healthy”. I couldn’t agree more. It’s high time we focused our efforts on developing a more robust and viable logging workforce. And I can attest to the fact that FRA is committed to being part of the solution.
FRA would like to thank Hatton-Brown Publishers, Inc., Timber Harvesting & Forest Operations magazine, and Managing Editor Dan Shell for granting permission to feature their 2024 survey in this Woods to Mill article.
