Economy of the NC whip saw pandemic of forest industries and sawmills
North Carolina logging and sawmills are struggling to adjust to a destabilized lumber market caused by rapid fluctuations in supply and demand during the COVID-19 pandemic.
Sawmills closed in the first few months of the pandemic, pushing up lumber prices. Sawmill executives expected demand to drop. Instead, home renovations and construction took off quickly, depleting available supplies.
Despite the drastic increases in lumber prices across the country, not everyone in the supply chain has benefited.
Loggers, for example, said they saw very little, if any, financial gain. Instead, many of them face financial hardship caused by a shortage of truck drivers, stagnant sawmill prices, and rising maintenance costs.
Loggers continue to record without increase
“Wood prices are on the rise,” said Jonzi guill, communications director of the Carolina Loggers Association. “The bad thing is that it didn’t affect the loggers in a positive way. You know the price hike has not affected the loggers. “
Some people think that because lumber prices went up, loggers must have seen an increase in earnings, but most lumberjacks saw no increase or even decrease in their income, Guill said. An increase in payment is expected to come from sawmills or lumber buyers who buy lumber, she said.
The relationship between loggers and sawmills can be a bit complicated at times due to the quota system used by sawmills, said Robert bardon, professor of forestry and environmental resources at NC State University.
There is no real market for loggers to sell their lumber to different sawmills or lumber buyers, Bardon said. After the 2008 recession, many of the smaller family sawmills closed or were taken over by larger corporate sawmills. The remaining sawmills also began to specialize in products, reducing the duplication of production.
Instead, loggers harvest timber for a specific sawmill or lumber buyer on a contract basis. Sometimes sawmills place loggers under quota, which means that a logger can only bring in a certain number of tonnes to sell to the mill during a specified period.
The quota system helps ensure that no excess timber is harvested, Guill said. It also helps ensure that loggers will be able to sell lumber across the state.
However, quotas are not set in stone and can change weekly or even daily depending on factors such as weather, demand and supply. According to Guill, loggers complain about how quickly the quota can be increased or decreased based on prices.
“We (the sawmills) only pay this operator a limited amount per tonne so that we can increase their quota and let them deliver more loads,” she said.
“While this lumberjack here… can pay a few cents more, then (the sawmills) are going to lower his quota so as not to make that much. Unfortunately, this sort of thing happens a lot.
Two years ago, Billy Corey, owner of Tim Con Forest Products in Martin County, had about 50 sawmills to sell his lumber to. Today he sells to three or four vendors in the area because he cannot afford to ship the lumber to the more distant sawmills.
“I’m losing money because I can’t keep competing,” Corey said. “I can’t increase my production because of the quotas, and there aren’t enough sawmills to sell to, so I’m at their mercy.
In Robeson County, Kenny cain, owner of Lumber River Timber Co., wonders how to keep the business going. The salary he receives from the sawmills is the same he received 10 years ago, but compared to that time his costs have increased by at least 35%.
“It eats away at us,” Cain said.
Working from a deficit
Yes Chipp Capps shutting down his Warren County-based company, Arcola Logging, he is expected to have between $ 3 million and $ 4 million in spare parts for his logging equipment, and he is expected to lay off the company’s 20 employees. He said he had no choice but to continue working, hoping he could pay off the debt later.
“You still have to be able to say, ‘No I’m not going to do it for this rate, I’m not going to do what you ask,” “he said. “It’s a lot harder to stop and change direction as a small business man. ”
He is not alone. In the past, the company would lose $ 2,000 a few weeks in a row, but a big haul could offset the debt, Corey said. But due to the saturation of the logging market, it is almost impossible to catch up now.
Corey owns 11 trucks but only has nine drivers. He tried to find two more drivers to be able to operate at full capacity, but received no requests.
In the industry, servicing trucks and truck drivers is a waste of money, said Capps, who is also president of the Carolina Loggers Association. He estimates that loggers lose between 10 and 15% of their gross sales on the cost of trucks alone.
Some logging companies have increased wages and added benefits to attract skilled truck drivers with salaries now between $ 50,000 and $ 60,000.
However, these salaries are pale compared to the salaries of $ 80,000 and more offered to truckers by large companies. In February, Walmart offered a sign-up bonus of $ 4,000 to truck drivers, in addition to a salary of $ 87,500 for the second year.
Capps has kept his drivers on a salary of $ 60,000 and a work schedule that allows them to come home every night – a huge draw for those with families. But Capps knows truck drivers have the option of leaving for higher paying jobs at any time.
“As the drivers get scarcer, they’re going to beat us,” Capps said. “Then it’s gonna suck dry people like me because it’s gonna be such a disparity. I can’t compete.
Brad BallThe phone rang in recent weeks as businesses across the country tried to find qualified truck drivers to carry the freight. As president of the Roadmaster Drivers School, a Dunn-based training program for commercial driver’s license truckers, he should have been able to provide help, but he couldn’t.
The shortage of skilled truck drivers is high nationwide, and industries, including lumber and gasoline, are struggling to recruit and retain drivers.
According to a report by the American Trucking Association, 63,000 truck driver jobs were vacant in 2019. If changes are not made quickly, the report estimates that the vacancies will increase to over 160,000 jobs.
The driver shortage was well known in the industry before the pandemic, Ball said. The creation of the Drug and Alcohol Clearinghouse database for commercial driver’s licenses in January 2020, a few months before the first big wave of COVID-19, compounded the problem.
Since no central database for drug testing existed, truck drivers could fail a drug test at one company, wait a few months and find a job at another company, Ball said. Now, companies are required to consult the database created by the Federal Motor Carrier Safety Administration before hiring. Employers must also report failed drug tests.
In May 2021, more than 76,000 drivers became ineligible to drive due to their refusal to submit to a drug test or positive drug tests.
In the early stages of the pandemic, older, experienced truck drivers retired in large numbers, leaving a hole in the workforce. Compared to other occupations, the average age of American truck drivers is 48 years old. The possibility of early retirement is an option for many.
“As long as you get your CDL and keep it, there is always a job for you,” said Julie cook, general manager of Future Truckers of America, an Asheboro-based truck driver training program. “There will always be another trucking company.
In his eyes, the labor shortage is the perfect time for people to step in and make these empty spaces their own.
School enrollment grew 30% more than the school’s usual class size in the years before COVID-19. The most recent class of 500 students came from a variety of backgrounds, from retired law enforcement officers to 21-year-olds eager to reach the age required to become truck drivers.
At the Roadmaster Drivers School in North Carolina, Ball found a similar model. The program has attracted a number of former hospitality and tourism workers laid off during the pandemic, he said.
To meet the demand for more logging truck drivers in the state, Roadmaster has expanded its current facility to increase the size of its graduating class to over 500 students.
Small sawmills are not doing any better than their larger counterparts when it comes to driver and worker shortages.
Like others in the industry, John fletcher, owner of Canton Sawmill in Haywood County, shut down his sawmill at the start of the pandemic. The 15-employee plant staff specialized in manufacturing high-quality Appalachian hardwoods.
While the factory was closed, employees took on higher paying jobs at large companies. After losing most of the management team, Fletcher decided to keep the plant closed for the immediate future and cut its losses.
Even if he wanted to reopen, he wouldn’t be able to find enough qualified employees to work with premium lumber, Fletcher said.
In addition to the sawmill, Fletcher runs an eight-person logging company and a four-person wood chipping plant. Because he is unable to process his own lumber, he sends it to Evergreen Timber Works in Knoxville, Tennessee, he said.
The mill then sells it to him and he uses it in his wood chipping plant. Despite his best efforts, his shredding plant is only operating at 60%.
It will likely be unable to increase production in the near future, he said.