Greg Munden, President of Munden Ventures Ltd, runs the family business with his brother, Chad.

SOLID BUSINESS move into logging

Munden Ventures of Kamloops, B.C. got involved in logging more by accident than by design, but it’s turned out to be a solid business decision.

By Paul MacDonald

For long-established trucking company Munden Ventures Ltd of Kamloops, B.C., their entrance into doing logging happened more by accident than by design, though it has turned out to be a very solid business decision.

“We were hauling logs and lumber for Weyerhaeuser and Tolko mills in the region,” explains Greg Munden, the company’s president, who runs the business with his brother, Chad.

“Weyerhaeuser was closing some of their mill operations in B.C., and they were down to mills in Princeton and Kamloops, and in the end, the company decided to close the Kamloops mill, which put things into turmoil.”

Eventually, Weyerhaeuser’s forest licences were sold to forest companies West Fraser and Interfor, who both have mills in the region. “So the logging contracts that had been with the Weyerhaeuser operations, went to these companies—and our trucking contracts went with them,” says Munden.

The people who owned two of the logging contracts that had been transferred decided to sell out, which could have added some further uncertainty to the situation for the Mundens.

“We had the transportation contracts, so we bought one of the contracts and began the family’s harvesting division, Peak Forestry Ltd, logging for West Fraser, with the idea that we could have a little more control over our destiny as a business, to manage things from stump to mill,” says Munden. “It seemed like the right thing to do at the time.”

In hindsight, it has turned out to be very much the right thing to do, as the two Munden brothers and their wives, Kim and Alea, as well as their parents, Jim and Linda, and a third brother, Ryan, the latter who are mostly silent partners these days, have moved into harvesting very successfully.

“Buying one of the two contracts, we wanted to step in and manage that piece of that business. With the other contract, that was sold to another contractor—but that has worked out well, too, and we continue to do their hauling,” says Greg.

While Munden Ventures may have become involved in logging quickly, it did so in a very well-thought-out manner—with a very experienced logger, Darryl Higgins, as partner. “Darryl knew that part of the business, and Chad and I learned from him, as we went along. Darryl was a great partner to have.”

After a time, the Munden’s wanted to grow the logging side of the business, and Darryl eventually wanted to exit the business, so they bought him out.

And since then, they have continued to grow and purchase more logging equipment.

Greg relates that when they first started logging, the deal to purchase the contract included the existing logging equipment.

“The equipment the contractor was using came with the deal,” he said. “Some of it was a bit long in the tooth. It had sat idle for a couple of years from the time that Weyerhaeuser closed the mill in Kamloops, until they were able to transfer the licences and logging got rolling again.”

In some respects, that was OK, he says.

“We needed to walk before we ran anyways, being new to logging, so starting with old iron was fine. And as we got more comfortable and more experience, we began updating it.”

While logging equipment may have been new to Munden Ventures, they are old hands at owning and servicing equipment, in trucking, going back to Greg and Chad’s grandfather, Craig.

Throughout the now three generations in trucking, there has been an emphasis on safety, customer service—and keeping equipment in good shape, says Greg.

“Our overall philosophy is production equipment needs to be current,” he says. “We’re open to having some older equipment that is not production-based, that is not going to impact the operation on a day-to-day basis. We have a little bit of older roadbuilding equipment, for example.

“But everything on the production side, whether it is bunchers, skidders or loaders, are basically current models.”

Greg noted that there is a very big emphasis on the business being relationship based.

“We are loyal customers to the suppliers we work with, and we need that from the customers we have,” he says.

The equipment that came with the logging operation, and of course the trucks they have worked with over the decades, continue to influence what they have in the fleet today. From the start, and their grandfather’s day, they have worked with Kenworth trucks, so there is a very strong relationship with B.C. dealer, Inland Kenworth.

“They’ve looked after us, and we’ve tried to develop those same type of relationships on the logging equipment side.”

That includes working with the B.C. John Deere dealer, Brandt Tractor, and Woodland Equipment, the Hyundai dealership.

“Woodland Equipment has emerged as a good partner for us, and we are continuing to expand our relationship there. Brandt has done a great job for us on the service side, as well. We’re pretty happy having two core suppliers, and they’re doing a good job of looking after us—the products and service are good.”

On the bunching and skidding sides, they have gone with Deere equipment. “We’re definitely John Deere fans in those areas,” says Greg. “Both of our skidders are John Deere—a 748H and an 848, and we have two John Deere 953Ks look after the bunching.”

From Woodland Equipment, they have Hyundai log loaders. “We just got our second Hyundai 3026 log loader. We’re interested in seeing how that performs, but we already have a 3026 machine doing decking and hoe chucking for us, and we’ve had good experience with it.”

Munden Ventures sub-contacts out the processing to Randy Janzen whom Greg praises for the solid work he does for them.

“Randy’s done a great job for us—he’s really keen on meeting all the standards for the mill side, so we’re viewed by our customers as best in class, which is what we’re trying to achieve.

“Processing is not an easy side of the business—Randy is in tune with what’s going on, on site, and works closely with his operators. He’s a Hyundai/Waratah guy, and he has good relationships with both of those companies.”

Greg said it made sense at the beginning to sub-contract the processing, and that is still the case.

“It was probably a necessity early on for us to do that,” he says. “Taking on the harvesting was a big thing for us when we really had no plans to do that, up until that point—it was a big move for us.

“Sub-contracting the processing was a piece of our plan, to ensure that getting into the harvesting was workable, and that we did not take on more than we should.”

Greg added that there are some very good reasons to having a solid sub-contractor such as Randy Janzen in a key harvesting role. “Randy has a vested interest in making sure the machines have good uptime, that he has good operators, and that they meet our needs—and they have done that. He’s very focused on the processing piece, which is not an easy part of the job to do well. They deliver for us, day-in, day-out.”

While Greg is the company’s president, and oversees overall operations including the trucking side, his brother, Chad, manages the logging operations. “Chad is the guy on the ground,” he says. “Chad worked closely with Darryl, and he acquired some of the equipment as we’ve grown, and ran various pieces himself.” Before they purchased the contract, Chad was very familiar with the woods, having been a trucking contractor.

“The harvesting side was new to him—and to me. But he had been around it all his working life, working with logging contractors.”

That knowledge transfer from Darryl to Chad worked well, says Greg. “Chad is a top notch supervisor, and he and our employees are responsible for the success we have on the harvesting side, keeping things moving, and making sure West Fraser is happy.”

As Greg noted, they wanted to walk before they ran with the logging, so they started doing 135,000 cubic metres a year, and stayed at that volume for four years. As they became more comfortable with the work, there were opportunities to increase their volume. “We were eager to do that,” says Greg.

They have increased their volume, and did 200,000 cubic metres last year.

“We’re not a big contractor, by any means,” he says. “But that is substantially more volume than we’ve done before, with pretty much the same logging equipment. We are focused on utilization, and trying to maximize the equipment that we have.” He cautions, though, that they do not want break through that threshold where you need one more piece of equipment—but getting that piece of equipment might overall be inefficient, because it can’t be fully utilized. It’s kind of a fine balancing act, at points.

“It’s also a balance as you move into different kinds of stands these days,” he explains. “The mountain pine beetle is pretty much done for us at this point—we get maybe 10 or 15 per cent beetle wood now, vs. entire stands of beetle wood we were getting before.

“It could be really problematic at times to figure out the right number of pieces you needed, with beetle wood. You could get into a really poor stand of wood, and production would just fall away. You’d want to add another processor to keep your production up, which really challenged us at times.

The company’s office/shop in Kamloops, B.C. Munden Ventures has very strong supplier relationships, in Kenworth trucks with B.C. dealer, Inland Kenworth, with B.C. John Deere dealer, Brandt Tractor, and Woodland Equipment, the Hyundai dealership.

“Now, as we move into more green wood, we just don’t need the same processing capacity—the wood is generally bigger. It’s been an interesting situation that I think a lot of B.C. Interior contractors are grappling with, in the post-pine beetle era.”

For contractors such as Munden Ventures, getting into green wood means they can really focus on production. Rather than dealing with the demanding, and low production beetle wood, they are now in healthy stands.

“When you are in green wood, you don’t get the massive swings in production,” he explained. “If you are in a really small piece stand, you are still going to get some fluctuations. But generally, you don’t have the blowdown, the wood laying around, that has such a big impact on production. They are better pieces to log—unfortunately, it’s getting steeper.”

Like a lot of B.C. contractors, Munden Ventures is looking ahead—and it often means looking up, as in having to tackle steep slopes in logging.

Greg checked out the wide selection of steep slope harvesting equipment at work at the recent DEMO International logging equipment show, held this past September in Maple Ridge, B.C.

“We wanted to see what is happening on that side—it’s not an area that we’ve had the need to get involved in yet, but we can see it coming,” says Greg. “And we want to be in tune with what’s coming and what’s available, in equipment.

“There’s no doubt the low lying forest has been harvested, so getting into steeper ground, farther up the mountain, is probably a reality for a lot of B.C. logging operations going forward.”

Being a medium-sized logging contractor, Munden Ventures’ plan is to let other, perhaps larger, contractors do the pioneering work with steep slope equipment. “That would take some of the growing pains out of that equipment area—and the various tethered products might sort themselves out, too. Maybe a leading design will emerge over the next couple of years and if we need to get involved in steep slope logging, there will be much more knowledge and experience out there to employ.”

Munden Ventures wanted to walk before they ran with the logging, so they started doing 135,000 cubic metres a year, and stayed at that volume for four years. They’ve since moved up to doing 200,000 cubic metres a year.

Moving into green wood has already had an impact on operations.

“I think the availability of permits for all licencees has been challenging as they move out of the wide open, big beetle blocks to the realities of today, which are smaller blocks in the green stands.

“The notion in the Interior of the 30,000 to 50,000 cubic metre blocks is becoming more rare. It’s more likely that you will have blocks of 10,000 to 20,000 cubic metres. It takes a lot more permits for the licencees to keep all their contractors going.”

A result of this is that logging contractors are moving their equipment around more to get to more blocks—all the while, working hard at keeping their equipment utilization high.

“A focus for us is not to lose any days, and we set that up as best as we can,” says Greg. “We have an excellent low-bed contractor that we use—Craig Dichrow of Upcott Enterprises really looks after us, and keeps us harvesting. At the end of the day, if we’ve finished a block, we move the equipment at night, so we can start on the new permit the next morning.”

Both Greg and Chad learned from their Dad that with equipment, it is very hard to get back days that you lose. “So we focus on uptime on the equipment, and not losing time in moves, and all the little things you can control as a contractor.”

Munden Ventures relies on its suppliers, such as Woodland Equipment, Brandt Tractor and Upcott Enterprises to help in that effort. “They understand the focus we have on uptime, and are very responsive, and juggle things around to address situations we may have, to keep us running,” says Greg.

This past fall, the company took delivery of a Hyundai 3026 log loader. They already had a 3026 machine doing decking and hoe chucking, and had good experience with the machine.

They also have their own service truck and heavy duty mechanics to carry out scheduled routine maintenance. And it may be a subtle thing, but they have their schedule work around servicing the equipment, rather than around the equipment having to work around the mechanics’ work schedule.

Doing all this means having engaged employees, from mechanics to operators, says Greg.

“The single biggest thing for us is our employees,” says Greg.

“On the logging side, we have good, reliable equipment operators who know what they are doing—most of our guys have been logging a lot longer than we have. We rely a lot on them, and we’ve been very fortunate to have them as we’ve started up the logging side of the company.

“You need to have the right equipment—but we have people with a lot of years’ experience operating those machines.”

While Chad oversees the logging operations in the bush, both he and Greg focus strongly on the numbers of the business, tracking closely how the company does, on a block by block basis.

“We have a really strong foundation from our Mom and Dad on tracking what we do, and understanding how our equipment is performing,” explains Greg. “We’ve used the last five years, particularly the last two years, to try to develop a database of how we have performed in various blocks with different and similar characteristics, to build a model on how we can price our work going forward—what worked, what didn’t work, productive time vs. idle time on each piece of equipment each day.”

The technology onboard the machines, such as telematics and GPS tracking, all help with this.

“We really try to build data behind what we have done in the past so we can be confident bidding or quoting jobs, and what the results will be. We don’t want to be shooting from the hip with our bids.”

As much as possible, they want to base the numbers they are presenting to licencees for work on hard data—rather than trying to spitball some numbers, based on a gut feel about logging a block.

“For guys who have spent their lives in the woods, and have been around harvesting equipment forever, they are better at relying on their gut than we are,” says Greg. “We’re still relatively new to this. And there is big money that you could potentially lose in this business if you are wrong.

“The data gives us a baseline to start from—and then we can focus on problem areas on a block, like a rock cut or ridgeline or slopes, and focus on coming up with good numbers around that, rather than starting from square one with the whole job.”

The data-driven approach worked well for them on the trucking side, and it is proving helpful in logging, too.

“We still have a lot to learn in logging—there are people out there who do things better than we do,” Greg quickly adds. But having this data works well for them—and could work well for others, too, he suggests.

“As contractors, we all have this very expensive equipment that we need to work on an efficient basis,” Greg says. “And having a conversation with the mill about rates is not easy, period. There is a lot of pressure to meet licencee rates.”

As the saying goes, sometimes logging contractors can truly feel they are stuck between a rock and a hard place.

“But it helps to have data and comparable numbers to support the case that you are making about why rates should be higher than what a licencee is proposing. They might not have the information or data that you have.”

At the end of the day, Greg says, it can be about developing and maintaining a good relationship with the mills you work for. “The licencees want the best delivered log costs to the mill—but they want us to be in business long term. That’s in their interest, too.”