Issues and Trends
- There is a shortage of skilled labor for trucking and logging companies, and those businesses face intense competition for equipment operator labor especially from oil & gas and mining industries.
- The logging and trucking workforce and family business owners are aging, with less frequent business or employee succession to the next generation of family members.
- There is a shortage of logging contractors in the mountainous portions of the central Appalachians. Very high logging workers compensation insurance rates in these same areas (especially in KY, PA, and WV) discourage logging businesses from expanding and adding employees.
- Trucking insurance is expensive, with few insurance carriers, and the carriers are only insuring experienced drivers.
- The Hours-of-Service (HOS) electronic log device (ELD) mandate by the Federal Motor Carrier Safety Administration (FMCSA) has reduced the number of daily and weekly long-haul wood deliveries per truck due to the prospect of upset conditions (such as traffic jams or excess wait times to load or unload) using up HOS limits. Some delivery destinations and backhauls, especially for lumber products and wood fiber from distant woodyards, are no longer economically feasible.
- In order to compete for drivers, some regional trucking companies are offering large bonuses to attract new drivers but are still having trouble “filling all their truck seats.”
Timber Supply and Demand
- The current U.S.-China trade uncertainty and tariff war has impacted the hardwood sawtimber market. The demand from China—a major market for Appalachian region logs and lumber--has been highly volatile for well over a year.
- The recent, permanent closure of Verso’s Luke, Maryland pulp and paper mill has eliminated about one million tons of annual pulpwood demand in portions of the MD-WV-PA-VA area. This closure leaves many wood suppliers without a significant market for their pulpwood production and hinders the ability of forest landowners to accomplish thinning and regeneration harvests.
The Appalachian Region (AR) held its 2018 Fall Meeting in conjunction with the FRA Fall Board Meeting in Lexington, KY on October 10-12. AR guest speakers addressed (1) recent forest resource supply & demand issues and various regulatory and legislative developments in Kentucky, and (2) an Ohio-based insurance and truck sales company perspective on equipment financing, buying and selling of equipment and trucks, and insurance for logging and trucking operations.
The AR Policy Committee most recently met on April 10 in Beckley, WV and concluded its meeting with a tour of nearby pulpwood concentration and log merchandising yards.
What’s on the Horizon
FRA’s Appalachian Region 2019 Fall Meeting will be incorporated into FRA’s National Board Meeting and Legislative Fly-In in Washington, DC, September 17-19.The spring 2020 AR Policy Committee Meeting (date TBA) will be held in Blacksburg, VA; it will include an overview of Virginia Tech’s Forestry programs and current forest operations research.