PLC Logger's Voice Winter 2019

elow freezing and remove language
regarding water in the cracks.
Small Business Savings Accounts - one of the
greatest disincentives for small businesses
growth is the inability for them to plan and
save for future investment from year to year.
If a business has a positive year and yields a
profit, that business must either claim the
income and pay corporate income tax on it or
they must immediately reinvest the income
back into the business by purchasing
equipment, material, etc. to ensure they utilize
their profit to its highest and best use without
paying income tax on it. The current system
as it stands does not provide an opportunity
for savings or appropriate long-term planning
and puts small businesses at risk from year to
year. Similar to the theory of retirement
planning for individuals, small businesses
should be afforded this same type of
opportunity so that they can be encouraged to
save and reinvest when the time is right,
rather than when they don’t need to.
As you can see, the PLC has an ambitious
agenda to move forward with initiatives that will
benefit Maine loggers and truckers in the long run.
The new legislative session begins on January 2 nd
here in Augusta and it will be all hands on deck.
Members will begin receiving their weekly legislative
update on Saturday, January 5 th and we hope that all
of you will see the value in what we are doing to
maintain and expand the profitability for loggers and
truckers.
In other thoughts, as we think of change, I
thought it was also an opportune time to start talking
about the change that is happening in the markets that
each of you rely upon, i.e. Nine Dragons, Verso and
Pleasant River Lumber have announced significant
growth opportunities.
However, as good as the news is that there is
growth on the horizon in the marketplace, another
significant issue has come to the forefront as a result –
workforce availability. I hear from members every day
that not only can they not hire the people they need to
do the job now, they have no idea where they are going
to hire additional workers for the predicted capacity that
is expected to come online in the near future. This is
concerning because not only does it impact the capacity
of loggers and truckers, it could have lingering impacts
throughout the value chain.
When the pulp markets vanished a few years
ago, a lot of large contractors downsized significantly;
some with five crews reduced to three or from six crews
to four and a few left the industry altogether. Those
who were laid off or who sold off their businesses are
quick to say that they enjoy pounding nails, driving a
commercial truck, running an excavator and being paid
a fair rate for the work they do. Even if the prices trend
up a little, it is hard to believe that those same
companies that reduced in size or left the business
altogether are going to take the same risk for no reward.
Contractors own and operate businesses with the
intent to earn a return; they are not in business to
subsidize the financial returns of their customers.
During a time of high lumber markets and increasing
pulp demand, far too many contractors in Maine are
running on borrowed time. Despite some price creep
and increased demand for wood, a majority of
contractors are still reporting much lower profit
margins. And when it comes to cost savings in the
supply chain, loggers have nothing left to give. Any
business that does not earn a return, closes down. It’s
that simple. It does not matter if it’s a pulp mill, a saw
mill, a pellet mill or a contractor.
As most in this industry know, logging
contractors are currently unable to offer high enough
wages to attract and retain enough skilled workers to
meet the rising demand for Maine wood fiber as the
markets rebound. Costs in the logging industry have also
risen across the board and logging businesses that have
operated on equity for the last few years with
nonexistent profits cannot increase wages to a point
where they can attract new people to the jobs that are
available. Meanwhile, existing workers are rapidly
“aging out” of the industry or leaving for more lucrative
jobs in other industries such as heavy equipment, over
the road trucking or forest products manufacturing.
I’m raising this issue at this point as it is
something that the PLC is looking at very closely and it
is a very concerning development that needs attention.
We are currently surveying our membership as to their
employment needs and we are also comparing the
occupations in this industry to those that we are
competing against. From preliminary reports, it looks
like over 1,000 people will be needed for logging and
trucking in the not too distant future and change must
happen for this level of labor infusion to occur.
Look for continued information from the PLC
on this in the near future. This issue and the change that
has resulted is not insurmountable, but it is going to be a
tough challenge to overcome and will require a
concerted effort from all of those involved in the
industry to make change a reality.
Have a great winter season, please stay in touch
when you can and don’t hesitate to let us know if there
is anything we can do to help.
Dana
The Logger’s Voice ▪ Winter 2019 23