When Louisiana-Pacific shut down its Baileyville mill earlier this month, everyone asked the same question: How could a mill in a state thick with harvestable timber claim to be starved for logs?
Even seasoned pros in an industry ruled by vast equations of demand, weather, labor, tariffs, real estate deals and rates of harvest say there is no easy answer.
But a starting point is the explosion of new housing starts this year that whipped up demand and competition for timber among Maine’s surviving mills. When those mills called for more raw material, they found a depleted logging force and hard-pressed contractors unwilling to bulk up for a surge. The end result was simply too few strong backs available to harvest Maine’s trees.
“We’re all competing out there for all the wood,” a wood buyer for one large Maine mill operator said. “And we’ve got 80 percent of the necessary contractors to cut 100 percent of the wood we need, so we’re already at a 20 percent shortfall.”
A labor shortage is hard to grasp in areas so notoriously underemployed. But Labor Department figures show logging industry jobs, including truckers, held steady at around 2,600 from 1993 through 2001. In 2002, the numbers dropped to 2,400.
Those in the industry also say a long-standing reserve of part-time loggers, traditionally willing to shore up supply when markets got tight, were no longer answering the call.
“The guy that is working one man and a skidder, a lot of those have parked the skidder and gone to work in construction and other things,” said Carl Henderson, a land management forester with James W. Sewall Co. “There is enough logging capacity out there to keep the big land owners going at the level that they want to cut, but there is no surge capacity for when these mills need extra wood.”
Mills tend to call on that surge force prior to the fall and spring mud seasons that put much of the logging trade on hold. Those pre-mud season build-ups have become more intense over the past several years as, in many cases, mills have switched to just-in-time inventory management. A supply chain model meant to limit the amount of capital stalled in stored inventories, “just-in-time” became a textbook strategy among high tech and manufacturing management during the 1990s.
But the attempt to drive down costs slipped in Maine this year, when almost three months of logging were curtailed by rain.
“Sometimes the people who actually make these decisions are far away and have no clue when their decision proves to be a poor one,” Henderson said. “They are not the ones who take the heat.”
The first ranks of those taking the real heat were the 99 workers sent home in Baileyville. The Louisiana-Pacific mill had restarted in June, after 10 months of downtime and after the wet spring stalled loggers and left mills hungry for pulp and sawlogs.
A thin-spread logging force was already strapped, committed to contracts with other mills, including the 600-plus-employee Fraser Paper mill in Berlin, N.H., that reopened last year. A deficit-weakened dollar helped ship 38 percent of saw logs cut in Maine in 2002 to Canada for processing, compared to 28 percent in 1999.
Louisiana-Pacific is now trying to work its way into the mix, and establish enough relationships to allow it to reopen in April.
Industry officials also said they were working to help interested contractors expand operations. But loggers like Randall Madden, who employs about 20 loggers at Randall Madden Trucking in Milford, said he has little interest in being spread more thin.
“I’m doing the best I can to try to maintain and keep what I have strong,” Madden said. “And I am still using some equity in my equipment.”
The root cause of the lumberjack exodus is an industry pinched between price pressure from global competition, increasing insurance, equipment and fuel costs and the disproportionate expense of competing with companies operating in less regulated countries. The pressure shut down 119 U.S. mills between 1996 and 2002 – 56 in 2001 and 2002 alone.
“It’s just poor returns,” said Daniel Dructor, executive vice president with the Texas-based American Loggers Council. “The average guy has a million and a half dollars invested, and why invest in a logging business that is only going to make you 10 grand when you can invest in a mutual fund, without all the headaches, and make $90,000?”
Wages are an issue, contractors say, in attracting qualified workers. The average logger in Maine earned $27,574 in 2002, versus $24,646 in 1997. Scott Hannington’s Hannington Timber Lands & Lumber employs 50 to 60 loggers out of Wytopitlock. He said the dearth of labor and disputes such as the ongoing struggle between loggers and J.D. Irving Ltd. underscores the deepest weaknesses in Maine’s forest products industry: a once romanticized and profitable profession has become a largely frowned upon job.
“I’m proud of what I do, but I’m getting to the point now where I don’t tell people I’m a logger. I say I’m a businessman in the forest products industry,” he said. “I’m tired of telling everybody I’m a logger and they look at me like I have two heads.”