BREAKING OUT
Woodlots can be fraught with dangers for the unwary logging contractor.
It’s hard to make money in woodlots, but one Northland logger seems to have found an answer – or more correctly, a series of answers. And it is working for both Rob Leslie, his crew and the woodlot owners.
I’VE HEARD THEM DESCRIBED VARIOUSLY AS “money pits” and “crew breakers” because of the way they consume resources, effort and finances, but give little back in return.
It takes a special type of contractor to make woodlots work. And it takes a very special contractor to make a proper living from them across 12 months of the year.
Someone like Rob Leslie, from Northland, whose approach to woodlots is quite unusual. Well, in New Zealand it is.
Rather than just being hired by landowners to harvest their wood, Rob takes a more entrepreneurial approach and will often go for stumpage.
That can range from buying the land and the trees that are on it, or just the trees, to opting for an ‘open book’ where he’ll organise everything and take a cut at the end of the job.
Stumpage is quite a common way for logging contractors to obtain work in the United States, but I’ve not come across it much in this country. Most woodlot harvesting is conducted through a third party, usually an independent forestry manager/consultant or an exporter, with the contractor being the ‘hired gun’.
There are good reasons why many contractors steer clear of stumpage. It can be littered with unforeseen problems, especially if the contractor pays too much to the woodlot owner and the market price drops, or demand dries up and there is no outlet for the wood when it’s cut. Or the quality or size of the logs don’t meet expectations when harvested. Talk about a minefield.
Rob Leslie knows the pitfalls, but he’s still prepared to back himself to make a buck at the end of the job, based on his experience in the bush.
He was operating bulldozers at age 13, spending holidays and spare time helping out his father, who was an agricultural contractor in this area. The Leslie family are among the early European pioneers of the north who arrived from the Shetland Islands in the 1800s.
Rob has only been logging since 2004, but he’s been working in forestry for much longer, starting in 1989 doing silviculture.
“I was working for someone else, and within six months I was a silvi contractor in my own right for Carter Holt, doing everything; planting, pruning, thinning, controlled burnoffs in Topuni Forest, just out of Kaiwaka,” says Rob.
At the height of the silviculture game, Rob employed up to 30 people across three crews from Woodhill Forest, west of Auckland, up to Kaikohe and by 1999 they were planting 1.5 million trees per year. But then Carter Holt introduced the key supplier regime and Rob says he “backed the wrong horse” and lost out.
“I still had some private woodlot stuff, so I kept a crew going in pruning for another two to three years,” he adds.
He also took up an opportunity to work for Skywork helicopters between 2000 to 2002 as their Operations Manager, mainly involved with spreading agricultural fertiliser. But there was still a forestry connection, including the removal of wilding pines off the side of Mt Pohataroa at Arapuni.
“I hung on the end of a 300ft chain with a chainsaw – that was a very interesting job,” says Rob. “We also took all the pines off Rangitoto Island. A team of five guys, three on the harness, a live line under the helicopter and he just picked you up and put you under the next bunch of trees.”
Then Rob moved on to manage an avocado orchard near Mangawhai, which inadvertently led him back to forestry.
“They had some shelter belts they wanted to get rid of, so I bought a digger, an old 20,000-hour Hitachi EX200 with a grapple and started doing that,” says Rob.
“And then I got lots more requests. Once people knew I had a machine, they’d ring me up, just little jobs at first. It was all word of mouth.
“The jobs started getting bigger and it became forestry blocks, woodlots. So I got a Hitachi ZX200 and a rope skidder – I’ve still got that skidder – to drag the trees we were cutting down with a chainsaw. A couple of silviculture guys who had worked for me in the past came along and gave me a hand.
“Seven years ago, I bought my first processor, an old Timberjack 950 with a Waratah on it from my cousin who was getting out of logging. With that I decided to build up the business into a fully mechanised operation.”
There were several reasons for going down the fully mechanised path and top of the list was safety. Rob had been involved in safety audits with Carter Holt a few years ago and was one of the original founders of the Top Spot competition. He’s continued to be involved with Top Spot to this day, as an assessor, mainly for silviculture crews and the odd harvesting crew.
“Initially Carter Holt was getting me to go around through ITW (Industry Training Works) and audit all their engineering crews, bulldozers, trucks, silviculture and just ticking and crossing boxes and that wasn’t making any difference – every time you’d go back you’d have the same crosses in the same boxes,” he says.
It was decided that a scheme to incentivise people to behave in a
safe manner would be more likely to succeed, and so Top Spot was born.
Rob says: “The difference from when we were auditing to when we started incentivising and not penalising people as part of a competition, so they could see how they were progressing against other people, was quite something.
“Crews like Otautau in Southland went from being pretty ordinary, with good skills run by a very good contractor, to become the top silvi crew in the country and they have been for the past three years. And Makerikeri Silviculture in Canterbury was the same.
“It was a carrot instead of a big stick and it made a huge difference.” Mechanising a woodlot operation poses a different set of challenges, compared to a crew that is working in a corporate forest. There’s no long-term contracts or security to show the bank manager when you want to buy a new digger. And even if you do manage to purchase machines, the short-term nature of woodlots can play havoc with cash flow, especially in the slower winter months.
For many woodlot contractors, including Rob, the answer is to go for second-hand equipment, which comes with its own set of issues.
A machine with 10,000-to-15,000 hours on the clock is usually well worn and out of its warranty, so break-downs become a fact of life and maintenance costs are inevitably going to be high. The cumulative effect of lost production through break-downs and higher operating costs has a far greater effect on woodlot crews because of their lower turnover and earnings. It doesn’t take much to drive these small operations out of business.
Rob is very conscious of these issues, but he has one advantage over most other contractors in his position; he’s a qualified mechanic, having done his trade certificate training straight out of school. It means he can fix pretty much anything that goes wrong on his own machines, adding: “That’s why it doesn’t bother me about having older gear.”
For a woodlot specialist, he’s got quite a collection of older gear, plus his one star-turn, a Komatsu PC300-8 processing base bought brand new in September 2016. But then, in true Rob Leslie style, he adds that the Waratah 625C on the end of the arm is a second-hand unit that Komatsu got from a machine it brought in from Australia.
“It had done 6,000 hours but it is still a really good head,” says Rob, adding: “I don’t mind bargains, you’ve got to manage your money fairly well in woodlots.”
Indeed, you do. Which brings us to the question of how does a woodlot contractor manage to raise enough funds to be able to buy stumpage, in addition to forking out big money for machines?
Have a very understanding bank manager, is the answer. Not to mention a very understanding wife when it’s the family house that gets offered up as security for upfront payments made to woodlot owners.
Not every stumpage job demands upfront payments, he explains. It depends on what the land/tree owner is most comfortable with, as well as what he is prepared to accept.
Rob says: “Stumpage is what I’ve always done, so I haven’t really known too much different. We’ve got four methods of doing it:
“The Open Book. I put in a price to the landowner for the harvesting, transport, roading, engineering, all that sort of thing, and marketing. The owner doesn’t have to do anything and I pay them the difference between what I get from my exporter – sometimes I pay a small lump sum up front, though not usually in an open book method. I am not taking any risk because I am just getting a logging rate. So Open Book means they see what I get from my exporter and what my costs are, and they get the difference. So they are taking most of the risk. I don’t do that very often.
“Then there’s the Price Per Tonne option. The price per tonne I give them is guaranteed across all grades. So all I have to worry about is tracking how many tonnes have gone off the block. I’m still responsible
for the roading and everything else. I have to build all of those costs into the price per tonne. I’ve developed an Excel spreadsheet that I put in all of my costs, what I think the grades of wood are going to come out. I just walk the block, but I don’t take any measurements as such. I put a few plots in just to see stems per hectare
“Another option is the Lump Sum. You go to the owner and say, right this block has got 15,000 tonnes and I’ll give you, say one million dollars for it. So I am taking even more risk then, as I usually pay ten percent up front. You need to have a good bank manager. For this block I gave the owner $100,000 up front, although I’ve done this one on a per tonne option and I’ve taken a fair bit of risk on the market going up or down.
“The last option is Buy Land and Trees. I have a partnership at the moment in a 17-hectare block that we bought at Ruawai, which is just sitting there ready to harvest. It’s all grass underneath, like a paddock. The farmer planted it and kept it grazed and sprayed and clean, so we will put it back into grass. It’s worth more money as a lifestyle block. Then we sell the land on. We’ve done one block like that so far. We borrow against the land or current assets. We’ve owned that for six months, with the idea of harvesting it this summer.”
Sometimes Rob doesn’t even get to see the site or the trees himself when he puts in a bid for a block, such as the one he’s currently harvesting. Rob assures me this is not the norm and he usually inspects the blocks himself, but didn’t want to miss an opportunity.
“This block here I got when I was on holiday, I was in Singapore and the owner rang up on my cellphone and said I want this block priced in two weeks,” says Rob.
He got long-time friend and crew member Steve Robinson to run his experienced eye over it and when the answer came back that it was “do-able” for the Price Per Tonne Rob had in mind, the bid was sent in from Cape Town, South Africa (where Rob spent the next part of his trip) and he got it.
As anyone who has worked woodlots will know, the biggest risk is in gaining access to the trees and being able to transport them out easily.
Every block is different and needs to be fully appreciated when submitting a price. This particular forest that we are in today is just off State Highway 1, not far from the turn-off to Marsden Point, where the Northland Port is situated – a ten minute trip for logging trucks. The site itself is on a rolling hillside, but still accessible with ground based machines.
The road to the edge of the forest is well formed, and fortunately, there was already a track into the trees since the owner has a bach at the top of the hill. Rob and his crew do most of the roadlining but they usually call on Mark Wilson, of Wilson Contractors, to form the road itself – Mark does the Hancock forests in the north, so comes with a good reputation.
But even with straightforward tracks like this, it can cost around $30,000 to provide proper access for log trucks to be able to get in and out. On more difficult jobs, the price is even higher. And occasionally, it’s not possible to build an access road at all.
“That’s why I’ve got a forwarder, for going over tracks that we can’t make into proper roads,” says Rob.
“For woodlots it’s invaluable. The last job we did was 1,200 tonnes in seven little patches around the farm and you can’t afford to put in a proper road around a job like that, so you just process it and take it out to where the truck can get to.
“I imported it (a Cat 574) out of Canada. Forwarders don’t come onto the market very often here and there was nothing around at the price I wanted to pay and what was around were old Timberjacks that were giving people trouble.”
The forwarder isn’t needed today, so it’s parked up in a nearby paddock. But most of the other machinery in the Leslie stable is hard at work keeping up with the constant flow of trucks from Whangarei cartage company MTS Transport. Rob says they’ll get ten loads out today and on a really good day they can hit 14.
We’re leaving the skid site for the moment to clamber up the hill to see another recent arrival in action at the cut-over, a levelling Tigercat 855 that Rob purchased from AB Equipment, ex-Steve Yeoman, only five weeks earlier “so we’re all still learning on it”.
“It replaced the Timberjack harvester, which had clocked up 19,000 hours when we sold it,” says Rob. “It was well used, but it was a purpose-built machine and a good piece of kit.
“This one has a SATCO fall and delimb, a 424M that can process as well, because it has a measuring system on it.”
Rob makes the point that he can use the Tigercat/SATCO combo for
processing on smaller jobs and keep the big Komatsu/Waratah for the big stuff to save moving machines around.
But that’s not all. On the way up the hill we pass a Hitachi ZX280 with a SATCO 630 fall and bunch head purchased second-hand last year that Rob will often jump into himself to put more trees on the ground when needed, just as he aims to do later today.
“Basically, I’ve got three machines that fall if I want to send the processor out to the cutover as well,” he remarks, then adds. “Even having two dedicated falling machines in a single woodlot crew is quite unusual.
“This one (ZX280) I bought because I needed to rip the trees out by the stump on the sand in the job I was doing on the coast for a development at Mangawhai last year. The trees were too ugly to cut so we just grabbed them and ripped them out of the ground. The stumps went out on the forwarder to a burn pile.”
Rob then points to yet another machine parked up in the trees next to the track, a Komatsu 290-8, fitted with a quick-hitch that can either have a grapple or bucket on the end, which also came in handy for that rip-and-burn job. At other times it will be used for track and skid construction.
“Got a few Komatsu machines, I quite like them,” he says. “That old 200-7 (one of two loaders down on the skid), I bought that second-hand at 11,000 hours and it’s done nearly 16,000 hours now.
“The learner drivers get on that, although we don’t have one on it at the moment. It was pretty rough when I got it and it’s not worth tidying it up, but it does a good job. It can go out into the cut-over and I’ve got those track-grip things that bolt onto the tracks if it is wet. And it can get very wet up here, although we’ve been lucky the last few weeks has been very nice.”
At the top of the hill we finally catch up with Kerry Fishlock, who has shut down the Tigercat briefly for a chat.
Kerry has been with this crew for just over 18 months and was in between jobs when Rob picked him up. Prior to that, he was with a thinnings operation in Topuni and is a seasoned logger, having been in forestry for much of his adult life.
He’s enjoying the camaraderie of the Leslie crew and the challenges that come with woodlots. It’s Kerry’s first experience in a levelling machine, but he’s got the hang of it and appreciates the ability to work on steeper slopes without the cab being on an angle.
“It’s nice – when I remember to hit the buttons to make it level, because it doesn’t do it automatically,” he says.
Kerry is bunching the felled pines for the Tigercat 620D grapple skidder, which is another of Rob’s second-hand purchases. It’s one of three skidders that Rob has on his books – the others are an older 630C grapple skidder that is currently on hire to another logging crew and the original Valmet F67 ropey.
In the driver’s seat is a man who is enjoying his first taste of forestry, having switched from a career in the kitchen. Shel Lloyd was the chef and owner of the Smashed Pipi café and bar at Mangawhai for 13 years, which was Rob’s local for much of that time. When he got tired of the late nights and running his own business, Rob hit him up for a chance to try logging.
He’s been with Rob for 18 months and doesn’t regret the move one bit, although he is still trying to get used to working at the other end of the day, with the early starts.
“It took the body a while to get used to the different sleep patterns, but I’m enjoying the work – it’s different alright and I don’t have the responsibilities of being an employer anymore,” says Shel.
He’s still learning the tricks of the trade, including how to grab all the stems in the grapple and not drop them on the way to the skid, where we are now heading.
Down there it’s all go, with trucks queuing up to grab a load of wood, which pleases Rob: “We’re so close to the port they can squeeze us in between longer trips.”
There’s a pair of Komatsu loaders servicing the trucks, as well as
fleeting and stacking on the skid. The nicest looking of the two is a 220-8LC, which is owned and subbed to Rob by Des Hansen, brother of another logging contractor, Phil.
Des is a veteran of the bush, with more than 32 years’ experience under his belt and he’s been with Rob for three-and-a-half years.
He still enjoys logging and is full of praise for the way Rob runs the crew, adding: “And he pays well, no middle man to siphon off the money – he is the middle man.”
Over on the other Komatsu loader, the well-used 200, is Simon Ripley, who is the newest member of the crew, arriving just a month earlier.
Simon was working with Mark Ewers, brother of Nelson’s Dale Ewers, who moved his crew down to Wellington recently. Simon didn’t want to shift and managed to find a job here through the processor operator, Steve, who he knew from other work.
We’ve met Simon before when we conducted an Iron test up this way on the Tigercat 880 after it was first introduced to the market a few years back. This machine is a bit of a let-down from such a primo piece of equipment but he doesn’t mind.
“I like it here, haven’t done woodlots for a while, but this is good,” he says.
The king of this site is the Komatsu PC300-8, which still looks like a new machine even though it’s more than 18 months old and has done 1,800 hours.
That’s down to long-time friend and employee Steve Robinson, says Rob.
Steve started with Rob in silviculture around 20 years ago and then went farming for a while before getting back into logging.
“He was working for some crews up north and had learned how to drive a processor,” says Rob. “He told me if I ever needed a processor driver to give him a call.
“We didn’t have one at that time, so he started on an old Komatsu 300 that had done 30,000 hours and didn’t complain, kept it nice and then when the chance came I managed to buy a new one. You have a look at that, in 1,800 hours it’s hardly got a scratch on it.”
Steve is just as complimentary about Rob, telling me he’s good to work for and they are more like old mates.
He’s spent most of his life up here after his coal miner father shifted the family north following an accident in the mine.
Steve likes the variety that comes with working woodlots and says every job is different and comes with its own challenges. And being able to churn out the wood with a top-notch processor is the icing on the cake.
Down on the skid is his 18-years-old son Jordan, who joined the crew four months earlier after going through the Gateway programme to give him an idea about what life in logging is really like. Back in March he got experience working in the Leslie crew as part of Gateway and it was enough to decide this is where his future lies.
Jordie is currently doing QC and eventually wants to progress into one of the machines.
“Getting people to work for you can be an issue, but I’m lucky with the guys I’ve got here,” says Rob.
Being fully mechanised helps, but when trees need to be felled by hand they have Colin Aitken, a solo father who has been with Rob for seven years but is working part-time at the moment, who comes in to lay them down – and also drives the forwarder/skidder/loader when needed.
“We have several who are level 4 on the chainsaw, including me, but it’s good to have one guy doing it mostly who is younger and fitter than the rest of us,” adds Rob.
“It’s important to have versatility when you work in woodlots. it’s a different game to corporate forestry. With the corporate stuff they have to pump big numbers every day and while we should do close to 400 tonnes a day in this block, we don’t have the same pressures.”
But then again, working in woodlots demands a completely different approach. One that Rob Leslie seems to have mastered pretty well.
NZL