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Don’t Put Your Logs in One Basket
Schmitz Logging gleans valuable lessons from the recession
After a couple of really slow years (and we know which ones those were) things have once again picked up for Schmitz Logging out of Silverton, Ore. So much so that they recently went out and purchased a brand new John Deere 2954 log loader.
Schmitz Logging is a third-generation family operation. Currently, 76-year-old Norb Schmitz is only partly and not-really retired — he’s either out in the brush building roads or he’s down at the local coffee shop talking to log buyers and keeping up with all his long-time connections in the industry. He is also the one who takes the lead on working with smaller private landowners when they need some logging done.
Norb’s son Greg runs the commercial contract logging. Like his dad, he’s out in the brush as often as possible, working alongside his cable logging crews and practicing what you’d call management by example.
According to Greg, even though his new log loader had a pretty steep price tag, it was a necessary and strategically beneficial choice.
“We haven’t replaced any equipment for a long time, since fall of 2008,” he says. “When you’ve got 14 pieces of equipment out there, you’ve got to be replacing something every year or else you end up with a bunch of 14-year-old equipment.”
Looking for a Loader
When Greg was shopping around for new loader, he says one of his main criteria was durability. “The components on this John Deere versus other machines we looked at were just heavier – heavier undercarriage components. The cab has good visibility, and the guarding package is well built.”
Not only is it big and beefy, it’s also strong. “It has good swing torque and good travel torque,” he says. “Those are big benefits. You’re able to move so much more per swing, which means more loads per day and less trips in and out.”
Other factors in his buying decision were that he already has a lot of John Deere iron, he has dealt with the Pape folks before, and Deere was offering some pretty sweet financing.
“We deal with Deere Credit and have for a long time,” he says. “They had a great interest rate and that was definitely a factor. Plus we’ve dealt almost exclusively with Pape Machinery for quite a while now, and we always get good service from their people.”
Although he tried out some other machines, Greg says he is very happy with his decision. “The first job we were on with it, it increased production, and it’s made us more competitive in the ground-based logging. That’s what ground-based logging has become, kind of an arm race to see who can buy the biggest and baddest to send out into the woods.”
Three Competitive Sides
The primary focus of Schmitz Logging’s business is cable logging. They have two cable sides and one shovel side.
“Eighty-five to ninety percent of our business is clearcut contract logging for Longview Timber,” he says. “We primarily work the Santiam River drainage, the Abiqua drainage, Mollala drainage, and the Clackamas drainage, on the Longview Silver Falls and Clackamas tree farms.”
In fact, Schmitz has been working those areas for Longview longer than just about any other logger. “Dad started out at the Silver Falls tree farm in 1967, and in 1989 when Longview bought their Clackamas tree farm, we were one of the original loggers out there as well.”
Greg notes that when Longview was sold to a Canadian asset management company back in 2007, one of the big changes was that the new owners started awarding projects based on competitive bidding. That caused Schmitz to more closely examine their costs and procedures, but Greg points out that was not a bad thing.
“The bid process forced us to get a little more competitive,” he says, “but I think they also began to realize that there’s not a big line of new loggers coming down the road – especially cable loggers.”
Staying competitive requires the right iron, and the Schmitz equipment list reflects this desire to stay profitable. In addition to the new Deere 2954 log loader, there is a Thunderbird 6170 yarder, two John Deere 2554 log loaders, a John Deere 270 log loader with a Waratah 622B head, a Linkbelt 98 yarder, a John Deere 230 loader with a Waratah 622B processor, a Kobelco 250 road builder, a Hitachi 200 log loader, and a Kobelco 330 with a 620 Waratah head.
Staying Productive in 2009 and Beyond
On the plus side, it also helped them when the market really fell apart a couple years later. “2009 and 2010 were the worst years for us in terms of making a profit,” he says. “For those two years, it was mostly all about just keeping the men busy.”
“May 2009 was when everything came to a screeching halt. Longview curtailed their cut considerably and for the first time ever for this company, we didn’t have a job to go to. So I went out and bid jobs with other mills. I just started calling everybody I knew.”
Fortunately he won some bids with Interfor and was able to keep most of his guys working. He also realized the importance of not getting too comfortable with a single opportunity.
“We’ve got a good crew, and we are competitive on the outside world as well,” Greg says. “We still try to keep on the lookout for other opportunities. Last year we took a job with Olympic Resource Management. They had bought some ground up the Mollala River and needed some contractors. There was a small gap in Longview’s plans so we jumped on it, and I think we did a good job for them.”
Being known for doing a good job is one of the keys to finding work in tough markets, says Greg. “I call the tree farm managers monthly and check in to see what they’ve got. They want the best price for their product so they are always looking too.”
“I think having a good reputation is the key to getting work in cable logging because there’s just not that many of us out there,” he says. “The main thing is to not promise more than you can deliver. Treat the land like it’s your own, that’s what it really boils down to. Don’t make a mess, don’t break timber. Log clean.”
Like most loggers, Greg also places high value on his crew. “Finding and keeping good people is always a big concern,” he says. “We try to keep them working steady by not taking on a bunch of work and then having it fall off. For example, right now there’s work out there, and I could go after some of it, but that would mean hiring more guys and then probably laying them off down the line.”
“We just try to treat our guys with respect. I’ve spent a lot of time out in the brush myself so I’ve got a lot of first-hand knowledge of the challenges of working in the brush. I can point out to them why doing it one way is going to work versus another. And I learn from them too, it’s not a one-way street. They are smart young men — I respect their opinions and they respect mine.”
He also does his best to take care of his guys and increase job satisfaction by stressing safety and providing as safe a work environment as possible. “With cable logging, safety’s got to be Number One all the time. There’s so much exposure. We stick to a 40-hour week; we don’t push the crack-of-dawn starting time unless it’s fire season.”
They also provide the crews with boots and raingear to make sure that every man is properly equipped out in the brush. “We subsidize the boots. We charge them a day’s wages for a pair of boots – I think a pair of Wesco’s are right around $400 so we subsidize them pretty heavily so they all have good boots.”
In the end, there’s no one thing that’s kept Schmitz Logging productive, even through the tough years. It was a balance of skill, experience, looking ahead, good equipment, and a first rate crew.
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