Industry News Roundup

By Scott Dane

With pandemic illnesses and hospitalizations falling, and restrictions being lifted, it appeared that the worst might just be behind us. The timber industry was deemed essential and worked through the COVID crisis providing the resources to support the production of forest-based products. Most survived, both literally, and businesswise.

However, after over two years of pandemic economic impacts to the U.S. economy, studies concluded that over $1 billion in negative economic impact occurred within the timber industry, due to some mills closing and others taking downtime. Now hyperinflation has reared its ugly head.

The Bureau of Labor Statistics reported that inflation was 7.5% compared to a year ago, the highest in 40 years. I do not know what type of “new math” or formula they are using, but it doesn’t take a con-

INDUSTRY NEWS ROUNDUP

As We See It: Inflation Threatens Industry voluted calculation to feel the “real” inflationary impacts. Just fill up the tank of your logging truck, buy consumables or parts— they’ve all in creased by at least 3-4 times the 7.5% rate being reported (this as sumes the products are even available due to the breakdown in the supply chain). Additionally, labor costs are increasing as the logging industry competes to attract and Dane retain workers. The Department of Energy (DOE) documents fuel prices. These are the average diesel prices reported by the DOE across the country: February 2020—$2.95; February 2021—$2.71; February 2022—$3.95 (with California reporting $4.94). “The cost of fuel has now risen to $4.30/gallon in northern Wisconsin,” according to a Wisconsin logger. “I have been in the trucking business for over 40 years. The availability of parts, tires, filters are at a level not seen in the past,” a Minnesota trucker says. “A set of four tires for a F-350 pickup cost $2,012 two weeks ago, $400 more than at this time last year,” adds an Idaho trucker. “A pallet of bar and chain oil last year was $1,300, today it is $2,000,” a Missouri logger laments. “Slasher saw blade was $1,888, now it’s $2,958. Tracks and chains for six-wheel skidder were $20,300, now they are $27,300. Diesel Ex haust Fluid (DEF) was 95 cents per gallon, now it is $2.64 per gallon,” according to a Maine logger. “The prices being paid to loggers and truckers are not keeping up to the increased cost of doing business,” emphasizes a Minnesota trucker. The numbers don’t add up. At this point, the timber industry would embrace a 7.5% inflationary increase compared to what we are really paying! Unlike other industries that can pass on the additional costs to the consumers, the timber industry does not have that option in most cases. In an industry where half operate at a breakeven or loss and the largest percentage of profitable companies (24%) operate on a 1%-3% profit margin, absorbing these additional costs is not sustainable. The Professional Logging Contractors of Maine has conducted a survey comparing the cost of specific industry items between 2020 and 2022. That data will be available on their web site. American Loggers Council is going to utilize that survey, with a couple of additions, and distribute it nationwide

through our databases and state associations. It is imperative that the real inflationary numbers be documented and verifiable to provide credibility when demonstrating the impact to operational and production costs. When the survey is released, please take a moment to complete and submit it. Your participation will assist in developing quantifiable proof of the level and impact that inflation and supply chain interruptions are having on the U.S. timber industry.

Scott Dane is Executive Director of the American Loggers Council. ALC is a 501(c)(6) trade association representing the interests of timber harvesting and timber hauling businesses across the United States. For more information visit www.amloggers.com.

Chunk Of Timberland Sold In U.S. South

Ontario Teachers’ Pension Plan Board’s Tamarack Timberlands LLC, an investment vehicle owned by Ontario Teachers, has assumed ownership of 870,000 acres of timberland in the U.S. South from Resource Management Service (RMS).

The large-scale timberland portfolio of high-quality loblolly pine is spread throughout the U.S. South and is third-party certified to the Sustainable Forestry Initiative standards. The timberland portfolio provides significant diversification benefits to Ontario Teachers, in cluding diversity of locations, customers and tree age classes.

The transaction gives Tamarack Timberlands LLC full control and governance of the assets. RMS, one of the world’s largest providers of timberland investment services, will continue to act as the timberland investment manager for the asset.

The timberland will continue to be operated using best-in-class management practices to ensure the sustainability of the forest over a long-term horizon, and to preserve the ecosystems and biodiversity of the forest.

It’s Pellets Galore For Enviva Inc.

Enviva, already the world’s larg est producer of industrial wood pellets, is accelerating its plans to double its production capacity over the next five years, from 6.2 million metric tons per year (MMTY) to 13 million. To capitalize on this mo men tum, Enviva is broadening and deepening its development capabilities and leveraging relationships with key equipment suppliers and construction partners to enable it to build and commission two plants per year, up from its historical rate of one plant per year. Enviva plans to continue utilizing its “build and copy” approach to plant design while increasing the nameplate production capacity of its new plants to 1.1 million, up 45% from the previous standard of 750,000.

Meanwhile Enviva expects its plant in Lucedale, Miss. to ramp up production throughout 2022, exiting the year at its designed run-rate of 750,000. Additionally, in the first half of 2022, Enviva plans to commence construction of the fully contracted plant in Epes, Ala., the second plant in the company’s “Pascagoula Cluster.”

Enviva plans to accelerate the construction of a third wood pellet production plant in its Pascagoula cluster in 2023, along with other proposed plants in the Savannah and mid-Atlantic regions. Additionally, Enviva plans to commence and complete a 300,000 MTPY expansion of its Lucedale plant during 2023.

In 2024, Enviva plans to place both the proposed third and fourth Pascagoula cluster plants in service and begin construction on two additional plants expected to be located near Savannah, Ga. and Wilmington, NC.

In 2025, Enviva expects all of its Pascagoula cluster plants will be operating at their full run-rate, in addition to having the new Savannah cluster plant in service.

In 2026, Enviva expects to have both proposed Wilmington and

Texas Log Theft Suspects Indicted

Three suspects were indicted in Liberty County, Texas for Engaging in Organized Criminal Activity, a second degree felony, accused of conspiring together to steal $102,776 of timber revenue through their employer, Alvin Laird Logging.

The indictment follows a twoyear investigation that determined the defendants, all drivers for Alvin Laird Logging, were selling timber, harvested from the Laird’s logging sites, to a mill under a third-party contract then obtaining the revenues in cash without the consent of Laird or the landowners.

There were numerous victims identified in the investigation as the logging contractor was a sub-contract under another company and working for sever landowners. The three suspects could face from two to 20 years of imprisonment and a fine not to exceed $10,000 if convicted.

Meanwhile, Mizrany can’t stress enough the importance of involving Texas A&M Forest Service in any case of suspected timber fraud or timber theft.

Alabama Pursues New Truck Weight Limits

In response to trucking capacity issues that include labor concerns and lack of qualified young drivers, the Alabama Forestry Assn. (AFA) is

promoting legislation to increase weight limits for certain axle configurations and for rigs that are weighed when they’re loaded with either onboard scales or in-woods systems.

The Rural Logging Support Act would increase weight limits for qualified trucks with a gross vehicle weight increase from 80,000 lbs. to 84,000 lbs. for 5-axle trucks and 84,000 lbs. to 90,000 lbs. for 6-axle trucks. The legislation provides single axle weight increase from 20,000 lbs. to 23,000 lbs. and tandem axle weight increase from 36,000 lbs. to 46,000 lbs. A longestablished 10% weight enforcement tolerance applies to increased weight limits.

To qualify for higher limits, trucks must be weighed when loaded using on-board scales or in-woods platform scales. The legislation also sets up a system of grants to non-profit groups that would pay for scale installation.

The AFA notes the legislation would result in as many as 185,000 fewer truckloads of logs on Alabama roads each year.

LOTS Group Acquires SC’s Bellwether FP

Integrated transport company LOTS Group has acquired Bellwether Forest Products based in Cam den, SC. Bellwether is a fullservice timber transport company working throughout the state, with the aim of inspiring a new generation of loggers and building longterm partnerships with wood markets and timberland owners.

The acquisition will enable the company to extend its service offering to new and existing clients, leveraging Bellwether’s extensive experience in the region.

Officials with both companies say the transaction reflects the future of forest products transportation in the Southeast, which has a huge but highly fragmented market served primarily by trucking capacity that lacks technology and professionalization. The LOTS Group is offering a model that improves efficiency, says Max Blatt, CEO.

Georgia-Pacific announced a planned $20 million addition to its oriented strandboard (OSB) facility in Alcolu, SC. The project will add a third strander, which will increase annual output by 150MMSF.

Construction on the project is slated to begin in April, and the new addition is scheduled to come online in the first quarter of 2023.

“The addition of a third strander has always been in the plans for Clarendon,” says Tobey Elgin, Georgia-Pacific’s Director of Operations for OSB. “The site was originally designed for additional capacity, so adding this third strander will maximize the efficiency and output for the operation.”

“The Clarendon facility is a tremendous asset in our OSB portfolio of five facilities,” adds

Andy Konieczka, President,

Georgia-Pacific Structural Panels.

“Seeing it get to its full potential has been a vision that will soon be a reality.”

Purchased from Grant Forest

Products in 2010, Georgia-Pacific completed the construction, and the site began operations in 2013.

“The multi-million dollar improvement project will be a plus for the local economy,”

Konieczka says. “Approximately 100 contractors are expected during the construction phase. Once the new strander is on-line there will be an increase in log trucks arriving and trucks departing with finished goods.”