‘-As We See It- October 2015- Trucking
Agricultural products come in many shapes and sizes, in-spite of this variability they have important things in common such as providing livelihoods to many families living in the rural parts of our Country. Whether the crop is soy beans or logs, they have little value without a dependable method to get the product to market. While the production of agricultural products is mostly found in rural areas, the majority of markets are found in the more urban areas. Most agricultural producers rely on truck transportation and there is little to compare to the frustration when a product, especially one with a shelf life, is ready for market and trucks are not available to haul it.
Many industries have been concerned for some time about the loss of trucking infrastructure and the impact it has on their business model. I would like to add my perception to this discussion. Whether we talk about an owner operator or a company running a fleet of trucks, I believe the underlying issue impacting infrastructure and availability is one and the same. There are numerous serious issues impacting trucking operations, such as return on investment, dependability of new trucks, state and federal regulations, price volatility, and for fleets – availability of qualified drivers. In most cases the trucks hauling agricultural products are the image that the general public has of our industry regardless if we are hauling logs or corn. While these trucks say a lot about our industry they also represent the greatest potential liability for any company.
It is relatively easy to get into the trucking business with a rather small monetary investment and a willingness to work hard. If you enjoy 75 hour work weeks behind the wheel of a truck, have a fair share of patience, and a mechanical aptitude, then it might be just the occupation for you. That being said, you can’t forget about the constant maintenance and the occasional break downs to add to this work week commitment. Owning a business has both good and bad days, one always needs to be aware, regardless of how hard you work or how efficient you are, there is always someone cutting a corner somewhere to do it cheaper. It is imperative to truly understand the cost of running a truck or a business and be willing to say no when the rate doesn’t cover your costs.
When discussing truck costs there are three components that make it up, fixed costs, variable costs and profit (risk). Variable costs are simple to account for, fuel, tires and drivers cost are the lion share of these and they are experienced when the truck is operating. Fixed costs are much different and vary from region as they are directly related to how much the truck can be operated in a given year. If you happen to operate a log truck in the Western United States, you have a truck that is specifically designed to haul logs and is difficult to convert to other uses. Other parts of the country utilize 5th wheel tractors that can be hooked up to any trailer and provides better opportunities to extend the operating season. There are many issues impacting a trucker’s ability to operate a long productive season, especially in the forest products industry: bottom line, the more hours a truck can operate in a given year the lower the fixed costs are.
Profit (risk) is an important part of the cost analysis. A prudent operator will not assume all the risk and hope there is some profit at the end of the job. A prudent operator will know his cost per hour for tires, fuel, insurance, repairs, the impact of loading and unloading delays, etc. A prudent operator will insure his price per hour includes a return on investment, which allows him to operate without putting himself or the public in jeopardy. A prudent operator will put the necessary time into a cost analysis so he knows exactly what his costs are. A prudent operator will not sign a contract when the job does not make economic sense. A wise old logger once told me “if you are loosing money on every load, your not going to make it up with volume”.
The rural portions of this country have been blessed with many honest, ethical, hardworking business people; we all need to be prudent business people as well. The entire forest products industry relies on a healthy trucking infrastructure and the burden to ensure a healthy trucking infrastructure into the future falls on the entire forest products industry as well. We should all be working together for long term solutions rather than short term gains.
Myles Anderson is the current President of the American Loggers Council and he and his father Mike own and operate Anderson Logging, Inc. based out of Fort Bragg, CA.
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.amloggers.com or contact their office at 409-625-0206.