CONTRACTOR PROFILE 1
Passing the torch
Alberta logging contractor Gordon Lewis is passing the torch—and his overall business philosophy of being a low overhead/high degree of control contractor—to the next generation of loggers, his son Barry.
By Tony Kryzanowski
The best advice that young logger Barry Lewis can give to individuals who are thinking of investing in a fleet of logging equipment in today’s business environment is to be very careful. It would be difficult, if not impossible, to become a stump-to-dump contractor in a hurry, says Lewis. “The equipment is too expensive in the first place, and if you have to count on hired equipment, it’s pretty tough.” At 36, Lewis is among the few people in his generation taking over from an older generation of loggers.
He is succeeding because his father, Gordon Lewis, has done an excellent job of mentoring him. Gordon established Lewis Logging and has worked at it for over 50 years. Now he’s ready to pass the torch to son Barry, who has been working at his side since he was old enough for a high chair, according to his mother. “My dad has made the opportunity available to me,” says Barry. “He worked hard all his life, and we never went hungry.” Lewis Logging is based in Rocky Mountain House, Alberta, and until recently was one of Weyerhaeuser’s three contractors designated to supply wood for its Drayton Valley sawmill and oriented strandboard (OSB) plant.
Lewis Logging is now contracted to Weyerhaeuser’s operations in Edson, where it also operates an OSB plant. Lewis Logging’s annual allowable cut is about 250,000 cubic metres, consisting of 30 per cent conifer and 70 per cent aspen. The company logs for 10 months a year, and has 26 employees. Its logging fleet consists of four feller bunchers, three skidders, four roadside processors, a butt ’n top loader, and a backhoe and grader for roadbuilding.
In addition to this full line of logging equipment, Lewis Logging also owns 15 logging trucks. The company’s philosophy is to operate very efficiently and to have as much control over all aspects of the logging operation as possible, complemented by a low overhead. For example, Barry and Gordon manage day-to-day operations, while Barry’s wife and Gordon’s daughter handle the bookkeeping. “We work hard at it ourselves,” says Barry. Working long hours is just part of owning a successful logging business, he adds. There is a definite trend, he says, of logging contractors now operating their own logging trucks. But given the high cost of fuel, insurance, and repairs, he says the only way to make any money in log hauling in today’s business environment is to operate a large fleet.
He understands completely why individuals are reluctant to make an investment in owner/operator logging trucks. “The profit margin is just too low,” he says. “After we get done with those trucks, we gross maybe $200 per day. That’s if you’re lucky enough not to blow some tires that day. Then you’d be running a zero or less than zero profit. With a $250,000 investment, who’s going to do that?” Barry’s father Gordon is one of Weyerhaeuser’s longest-serving logging contractors in Alberta. He built a solid business foundation by sticking with reliable clients, even though at times it seemed like there were greener pastures elsewhere.
The company also derives some of its revenue from logging timber for Commercial Timber Permit (CTP) and Local Timber Permit (LTP) holders, as well as doing a bit of logging for oil companies. “But you have to be where the money comes in every two weeks,” Barry adds. “With a company like Weyerhaeuser, you are pretty much assured that is going to happen.” While the ongoing softwood lumber dispute has had an impact on many logging contractors due to sawmill closures, Lewis Logging has been fortunate to have escaped that situation for two reasons. Most of the lumber manufactured at Drayton Valley and Edson is sold in Canada and, secondly, OSB production has helped to cushion the blow for some companies because of the premium prices OSB had been fetching.
In addition to building its business around financially solid clients, Lewis Logging also has a strong approach towards operating newer equipment, supported by a strong preventative maintenance program. “There’s not enough money in this industry to run old equipment,” Barry says. “There’s really not enough to run new equipment either, but at least your up-time is higher with your new stuff.” The company’s equipment typically has high trade-in value because of Lewis Logging’s strong oil sampling program. Regular oil sampling is one method that many equipment operators now use to determine whether their equipment is operating within manufacturers’ specifications, and to tackle minor equipment problems before they become major expenses.
Sampling records also work to the owner’s advantage when equipment is traded in because it offers documented evidence of how well the equipment has performed—and that maintenance has been conducted according to manufacturers’ specifications. Caterpillar equipment dealer Finning is Lewis Logging’s oil sampling provider. Finning also helps to keep oil sampling documentation current. Lewis says the company has forged an excellent working relationship with Finning, and that Finning representative Brent McDowell has been conscientious about providing accurate equipment specifications and keeping a well-stocked parts inventory so Lewis Logging can maintain maximum uptime. The operation’s most recent equipment purchase was a Cat TK1051 feller buncher with an HF221 head. Barry says they opted to stay with Cat products on both the carrier and head to qualify for Caterpillar’s full warranty protection program. “Caterpillar has the best warranty in the business,” he says, “and in order to get that warranty from tip to tail you have to have all Cat merchandise.
Plus, the Cat head has performed really well.” Gordon Lewis is taking more and more time away from the business these days, knowing that he has left the company he founded in very capable hands. For his part, Barry has learned from one of the best on what it takes to survive owning a big equipment fleet where the profit margins are thin.
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Tuesday, September 28, 2004