Red Rock llc

Last week I found that almost every paper or magazine that I picked up had some type of article about the negative effects the current economy is having on loggers. More and more of them are calling it quits. From 2000 to 2006, (the latest data available), loggers numbers decreased by 20%. That is a scary fact because without someone to fell, skid and load the trees, we're all out of a job.
Another scary number is the average age of the current logger, which is 55, with very few young people entering the profession. I know of 3 loggers within 30 miles of the log yard who have called it quits in the past 2 weeks. Fuel costs have increased 36% over last year, which seems to be the last nail in the coffin for many of them. Yet, while fuel costs have increased, log and pulpwood prices have decreased. This leaves many stuck in the pinch!
The only cost that is not increasing for loggers at the present time is interest expense. The current interest rate environment has allowed many to refinance, but, sadly, the interest savings realized are not enough to cover the increased fuel costs combined with the falling timber prices.
I noted that, when it came to this decline in logger numbers, in some of the articles there was a wide gap in the reactions of the end users of logs and pulpwood. Some companies are very, very concerned and are trying to build and strengthen relationships with their remaining suppliers, offering help with fuel costs and other concessions. They're smart enough to figure out that if their supplier base dissolves, they'll surely face supply problems when things return to normal in the future.
On the other hand, some short-sighted end users are paying no attention to relationships and are, foolishly, going after the cheaper wood being offered by desperate suppliers, viewing this only as an opportunity to increase their bottom line. Their current income statements look good, but it is uncertain how long that cheaper supply of wood will last, because, as loggers decrease, many of those desperate suppliers will vanish, leaving a void that may never be filled.
Last week, some of my suppliers came to me after reading the same articles I was. They're very concerned about what I'm going to do about maintaining a steady flow of wood this summer. I had several discussions with our core suppliers last week, reminding all of them that the word business to me meant more than just turning a profit. While it is important for everyone in the supply chain to make their profit, it is also about relationships and creating situations that are win/win for all partied. I also explained that, while I lived in the "bean counter" world for 22 years, I still approach business in more of the old fashioned way which is:
· I do what I say.
· A handshake can close a deal.
· Relationships are important.
· Always remember it is a small, small world. (I was reminded of this again last week when my path once again crossed with a lumber buyer that I had dealt with several years ago.)
· I help the ones that help me. (I take care of the suppliers in the summer that took care of me in the winter. As I mentioned before, I grew up in this business and am a firm believer in this principal. While it may not make sense from a "bean counter" perspective for 3 months, it sure does the other 9.)
I also shared with my contractors and hired truckers that this was going to be a challenging summer, but I would do everything I could to keep things moving.