Evaluating Profitability of Individual Timber Deliveries in the US South

Abstract

Timber transportation is an essential and often unprofitable segment of the wood supply chain. This study evaluated the profitability of individual timber deliveries for log truck owners in the US South. Origin and destination data were collected from 909 deliveries from 257 harvest sites. Travel time and distance were estimated using ArcGIS and GPS tracking. Monte Carlo Simulation was used to calculate 1000 unique combinations of payload, harvest site turn-time, mill turn-time, and percent-loaded km, yielding a dataset of 909,000 deliveries. Hauling costs and revenues for each delivery were estimated using published estimates. Driver wages were estimated in two ways: an hourly wage of $30.60 (USD) and 30% of the gross revenue from the load being delivered. Logistic regression was used to evaluate the relationship between six dependent variables and profitability. Only 14% of deliveries were profitable when the driver was paid an hourly wage versus 42% when the driver was paid 30% of gross revenue. Deliveries with one-way haul distances between 49 and 113 km (31–70 mi) were least likely to be profitable. Many deliveries could be profitable if logging businesses and mills reduced turn-times to under 20 min at mills and 30 min at harvest sites.

Examination of upstream supply chain and logistics issues in the US logging industry

“…They must also contend with hauling reliant on the weather, limiting their possible working hours and income (Geisler et al, 2016). Moreover, log truck drivers are underpaid compared with other trucking industries, which decreases their job satisfaction and retention (Conrad IV, 2021). In the forestry business, these factors reduce the available hauling capacity and generate driver scarcity.…”

“…As a result of poor scheduling, harvest sectors and sawmills experience striking fluctuations in truck arrivals throughout the day, with early mornings and just before noon being the busiest times with longer‐than‐usual queue lengths and, in turn, leading to higher truck waiting and turnaround times (Barrett, 2001; Conrad IV, 2021; Dowling, 2010; Weintraub et al, 1996). Irregular schedules also lead to unbalanced inventory and production levels, decreasing the efficiency of timber operations by pushing the related costs up (Epstein et al, 1999).…”

“…Federal and government regulations on operating hours, travel routes, and gross vehicle weight (GVW) also limit the productivity and profitability of the timber industry (Conrad IV, 2021). In particular, previous research found that slightly increasing GVW increases transportation and energy efficiency (Kogler et al, 2020; Väätäinen et al, 2020).…”

“…Logging/trucking companies lose their drivers to other logistics industries owing to relatively low pay and benefits (Casavant et al, 2009; Conrad IV, 2021; Koirala, Kizha, & De Urioste‐Stone, 2017), limited training opportunities (Conrad IV, 2017; Vaughan et al, 2022), poorer work conditions (Nakata et al, 2022), and poor internal marketing, communication, and driver management strategies (Taylor & Cosenza, 1998). Combined with the above‐mentioned issues, these factors make it challenging to attract young drivers while retaining skilled/experienced drivers, leading to high turnover, an aging workforce, and a log truck driver shortage.…”

Central Control for Optimized Herbaceous Feedstock Delivery to a Biorefinery from Satellite Storage Locations

“…A truckload was defined as 40 round bales, two 20-bale racks on tandem trailers [15]. Assuming 0.4 Mg/bale, the average truckload would be 16 Mg. A truck arrives at the SSL, unhooks the tandem trailers with two empty racks, and hooks the loaded trailers, an operation that emulates the logging industry [22,23].…”