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Fearless Contracting: Not afraid of diversifying

Vancouver Island’s Fearless Contracting is finding the best business approach is diversification, and as part of that, it is increasingly doing logging work on B.C. Timber Sales for other larger logging contractors, and for log brokers on the Island.

By Paul MacDonald

Though he manages Fearless Contracting, and is always on the move, Ken Fear (on the right, in photo) still gets in the cab and does some hoe chucking, when needed. "If there is a piece of equipment without anyone in the seat, I'll get in there," he says. The crew includes Ken's 22-year-old son, Brendan (far left, in photo), who operates their Tigercat 860 buncher.

You can understand how using the self-loaders on logging trucks for tossing cars at the local speedway could almost be viewed as therapeutic, considering the state of the forest industry over the last half-dozen years.

But for Vancouver Island’s Fearless Contracting, supplying their self-loader equipped logging trucks for the car tossing competition at the Saratoga Speedway is really all about entertaining race fans, supporting a local racing facility—and supporting a customer.

Ken Fear of Fearless Contacting does log hauling for Paul Hargraves, who operates a small sawmilling operation—Speedway Sawmills. Hargraves also owns and operates Saratoga Speedway in Black Creek, B.C., just south of Campbell River, which on a Saturday night will feature everything from drag racing to drift cars to, of course, the Fearless Contracting car tossing competition.

“There’s usually a good turnout for the car tossing,” says Fear, who despite his last name is a friendly guy. There’s a bit to choose from in terms of which trucks do the car tossing—Fearless Contracting has three Kenworths and four Western Star trucks.

Pun intended, but logging contractors had to be fearless going through the downturn—and for many contracting companies, the rebound in the forest industry has yet to be fully shared with an increase in logging rates.

Many contractors diversify, and will get into doing some construction work. Fear has also diversified the business, including purchasing and operating a local mini-storage facility and a contract firewood operation.

“You have to be diversified—you just don’t know what is going to happen tomorrow,” he says.”I’ve seen the market go up and down so many times, and you have equipment payments to meet.” The banks, he says, can offer to defer payments, but that really comes down to just postponing payments. “It’s not really helpful.”

Fearless Contracting’s Tigercat 860 buncher was recently doing some nimble work in a tough spot, which included some rock bluffs, about an hour outside of Campbell River, B.C. With this operation, they were getting 400 cubic metres to roadside, daily.

The association that Fearless belongs to, the Truck Loggers Association, which represents logging contractors on the B.C. coast, says that a lot of the problems in the contractor sector could be eased by increased rates. The major forest companies in B.C. lowered their logging rates during the downturn—and they’ve yet to share the better times the industry is seeing now, the association says. The TLA also says it can be difficult for logging contractors to line up consistent amounts of work, and not enough effort is being put into advance planning to allow for a smooth logging workflow, all of which has an impact on a contractor’s finances.

The coastal contractors who have Bill 13 replaceable wood harvesting rights can contest proposed logging rates from the licencees, but it can lead to extremely costly arbitration, with the end result uncertain.

Considering the situation on the coast, you can understand why contractors such as Ken Fear are involved with other businesses. As part of the diversification effort, Fearless Contracting did some logging road construction, but that kind of spread their equipment a bit too thin, so these days they focus on building road only in areas where they are logging.

Fearless has a Bill 13 logging contract with Western Forest Products, the major licencee on the B.C. coast. Increasingly, it is also doing logging work on B.C. Timber Sales, for other larger logging contractors, and for log brokers. “That’s really our meat and potatoes work these days,” he says.

Fear started out logging for industry icon MacMillan Bloedel on Vancouver Island, doing salvage work with a couple of trucks and a hoe. Things developed from there to loading and hauling work, and these days also includes harvesting work. Fear works hard to keep his logging crew—which peaks at 15, when things are humming—busy.

“In the winter, we take on jobs on some of the islands to keep the crew working—your crew is your most important asset,” he says. They kept operating through much of this past winter.

“As much as possible, you want to keep your crew intact,” he says. “And we seem to be able to do that, for the most part. Between all the different people I work for, there always seems to be something happening.” He notes they work hard to do a solid job, and have a good name in the industry. “You have to do a good job for the calls to come, and the work to come in,” he says.

As much as possible, they try to work with people who understand, and accept, that loggers have a lot of costs to deal with.

“They realize that as a logger, you face certain costs, and they don’t want you to go broke working for them,” he says. “Right now, there are people out there that are trying to take advantage of an overcapacity in the logging sector, trying to get loggers to agree to a rate that is not reasonable.” Among these individuals, there is little acknowledgement of the fixed equipment costs contractors face, and the high costs of labor and parts.

The numbers have to work. And if they don’t, the impact can be quick, and immediate, he noted.

“If you agree to do 50,000 cubic metres, and you are a couple of dollars low per cubic metre, that is $100,000 out of your pocket,” Fear says. “You have to be experienced and know your numbers before you get locked into a contract—with the wrong deal, you can lose more money than you could ever make.”

Fearless Contracting had a Link-Belt 350 carrier with a Waratah 624 processing head (photo below), which they recently sold to operator Jason LaRush (above). “Jason was looking to buy some processing equipment, so we made a deal with him for the Link-Belt/Waratah, and he continues to do processing for us, and for other people,” says Ken Fear.

Fear is truly hands-on with the business, even reviewing invoices before they go out. “We go by the time cards in doing the invoicing, but we don’t want to be charging someone for the time spent on a blown tire.”

Lately, when it comes to purchasing heavy equipment, the focus at Fearless Contracting has been on used equipment and auctions, such as Ritchie Bros., he says. “We’re looking for deals, and there are usually some deals to be found.”

Equipment auctions are held on Vancouver Island, and on the B.C. Mainland. But there could be some deals in the offing a bit further afield, in Alberta, with the drop in oil prices, and the ripple effect that has had on contractors there. In April, Ritchie Bros sold more than $37 million of equipment at an auction in Grande Prairie, in northern Alberta, a record amount for that site. And in late-April and early May, Ritchie Bros held its largest Canadian equipment auction ever, in Edmonton, featuring close to 8,000 pieces of equipment and trucks. But lower equipment prices that a downturn in the oil patch might be expected to bring could be offset by the lower Canadian dollar, and interest from American buyers.

“We might see some equipment deals coming up,” says Fear. “But you really have to know what you’re looking for in any of the auctions or when equipment is being sold.

“I’m always looking for a deal. If I could pick up something up in Alberta for 30 per cent undermarket, use it for a year, and then sell it at market price when the market improves, we essentially get the use of the equipment for free for a year.”

And they shop carefully. With a major dispersal, it’s not just someone getting rid of equipment because it needs some work. It’s best to look for multiple equipment sales vs. a one-off sale of a piece of equipment that has seen better days in the bush, Fear says. “You want to be careful or you can end up with something that could cause you problems.

“You can look at a piece of equipment and sometimes know how much it is going to cost to make it good again—and whether that makes sense to do. We can’t afford to take on equipment that is going to cost us big money to repair.”

On their shopping list recently was a new-er log trailer, and a grader. “We could hire a grader, but they aren’t necessarily available when you need them, and when you look at the numbers, it makes more sense to do it ourselves.”

Through auction houses such as Ritchie Bros, Fear is able to bid online, which can save a lot of time travelling to auctions elsewhere on the Island, or on the Lower Mainland.

When they bought their Tigercat buncher, which was purchased used, they were able to talk with the machine’s operator, who gave them the lowdown on the shape of the buncher.

“He had been operating it two weeks before. Depending on the operator, if you can talk with them about the machine, that might be all you need. It’s actually better than a mechanic going somewhere and doing a bunch of oil tests on a machine. You can spend a day going over a machine, and still not know for sure if there is a problem with it. And there are a lot of costs in doing that.”

With a Madill loader they picked up at auction, the grapple rotation motor was a bit loose, and it was quickly tightened. “If that is the biggest issue on a piece of equipment, I can deal with that,” says Fear. “We sent it out to work the next day, and haven’t had any problems with it.”

Most of the maintenance and repair work at Fearless Contracting is done in the bush. The main support vehicle is an International service truck picked up at an auction in Las Vegas—when the Canadian dollar was a lot higher when it is now. “The service truck has been excellent. It’s was used in the mining industry, and the welder on the truck has more hours on it than the truck itself.”

While Fear works hard to keep things busy, if there is any downtime, the equipment will go into a shop the company has in Campbell River, for preventative maintenance and the big work. “We’ve got a Kobelco 350 log loader, and we put a new engine in and new tracks on the loader when things were a bit slow. The Kobelco was getting a bit tired.”

They are looking to set up a larger shop in Campbell River’s industrial park in the coming years.

Though he manages Fearless Contracting, and is always on the move, Fear still gets in the cab and does hoe chucking, when needed. “If there is a piece of equipment without anyone in the seat, I’ll get in there,” he says.

The crew includes Ken’s 22-year-old son, Brendan, who operates their Tigercat 860 buncher. “Brendan is young, and he’s a really good operator on the buncher and the loader.”

The non-tilting Tigercat 860 buncher was recently doing some nimble work in a tough spot, which included some rock bluffs, about an hour outside of Campbell River. With this operation, they were getting 400 cubic metres to roadside, daily.

Their senior heavy duty mechanic, Art Bowbrick, can often be operating equipment, as well. “It gives Art a break from all the monkey-wrenching. It’s also handy to have a heavy duty mechanic right there. If there is a little maintenance to be done, he’s right there.”

They had a Link-Belt 350 carrier with a Waratah 624 processing head, which they recently sold to operator Jason LaRush.

“Jason was looking to buy some processing equipment, so we made a deal with him for the Link-Belt/Waratah, and he continues to do processing for us, and for other people,” says Fear.

The Link-Belt was originally purchased from dealer Parker Pacific to do roadbuilding, but they added the Waratah head, and switched it over to doing processing work. “It’s been a good machine for us, and it will be a good machine for Jason.”

They also have a Kobelco SK370 excavator, a Link-Belt 210 excavator, a Cat 980B wheel loader and a Volvo rock truck—and, of course, the seven logging trucks equipped with a variety of Profab and Peerless trailers, which once again were tossing cars this past summer at the Saratoga Speedway.