Making roomfor small contractors

In an era of large logging contractors, Ainsworth Lumber in Alberta is making room for smaller contractors with an Owners/Ops Group that allows a group of individual owner/operators to work cooperatively to harvest and deliver wood to roadside.

By Tony Kryzanowski

Once the backbone of the forest industry, the owner/operator logging contractor with perhaps a couple of pieces of equipment, a small stump-to-dump contract, and perhaps a few dedicated friends and family members involved, has given way to larger contractors with steep employee payrolls, bank payments—and stress.

Yet that independent spirit still burns bright for many individuals who love the forest industry, but would prefer to be their own boss without the stress of a humungous payroll and are satisfied with a tiny slice of the pie.

Dozer owner/operator Jamie Arlint (left) is one of the original group members of owner/operators who joined forces to work in a co-op to harvest some of Ainsworth Lumber’s annual cut in Grande Prairie, Alberta. The co-op approach has proven to work for both its members and the company.

While there are many owner/operators still working in the industry, they now tend to sub-contract their services to bigger contractors, which means that their fate lies in the hands of another contractor who typically takes a percentage of what the sub-contractor might earn by working directly for the forest company. These days, it is indeed rare for individual owner/operators to win a dedicated logging contract directly from a forestry company, but there are exceptions.

About 15 years ago, Ainsworth Lumber Co. in Grande Prairie, Alberta bucked the trend by setting aside about 150,000 cubic metres from its nearly 1 million cubic metre annual harvest to allow a group of individual owner/operators to work cooperatively to harvest and deliver that volume of wood to roadside. Today, that co-op continues to pay many dividends to both the co-op members and Ainsworth. In fact, the Owner/Ops Group has won quality and production awards multiple times from Ainsworth.

Noel Roberts, Ainsworth divisional operations superintendent, who has considerable experience working directly with the owner/operators, says the oriented strandboard plant’s harvesting plan is built around larger, single stump-to-dump or stump-to-roadside contractors because of the many obvious benefits they bring in overall efficiency. However, Ainsworth recognized that there was an opportunity to be more inclusive by making room for the independent owner/operator.

“We saw that there should be an opportunity for the smaller guys to have a piece of the pie, too,” says Roberts. “There were some people in the area that expressed an interest and we just took it from there. It’s probably fair to say that the interest was mutual on both the company’s side and also the individuals that were looking to come and work for us.”

That was the beginning of what has become known as the Ainsworth “Owner/Ops Group.” It consists of three individual companies: M. Boreal Logging, owned by Michel Coulombe; Ritchie Contracting, owned by Andre Ritchie: and Limbo Logging, owned by Jamie Arlint.

M. Boreal Logging harvests and processes the wood. Its fleet consists of a Tigercat 870C feller buncher purchased in 2008 and two Komatsu 270 carriers equipped with Hornet processors. While he operates the equipment some of the time, Coulombe has five employees to help him meet his production targets. Ritchie Contracting is responsible for skidding the wood. Owner Andre Ritchie owns and operates a John Deere 748H skidder and also owns a John Deere 648 GIII skidder. Limbo Logging looks after road construction, road reclamation and debris piling.

“Our day-to-day dealings with the group are a little different for sure,” says Roberts. “With the typical stump-to-dump guys, you generally deal with one individual who is the foreman for the entire operation, whereas with the owner/operators, you are dealing with the individual phases, so you are dealing with more people.”

Roberts adds that annual contract negotiations also require a different approach. All three company owners are involved, sometimes together and sometimes separately, in conversations related to harvesting plans for the coming year and setting the rate. As a result of those conversations, Ainsworth and the owners agree on a rate for the coming year. It is left up to the group to divide up the rate based on what each company does as part of fulfilling the overall contract.

Ainsworth operational forester Lauren Player, who has worked in the field with individuals from the group several times a week over the past season, notes that the co-operative approach continues to work well because Ainsworth is working with very experienced loggers. For example, prior to joining the Owner/Ops Group in 2006, Coulombe worked as an operator and foreman for another logging contractor, has extensive experience operating and maintaining forestry equipment and has also owned and operated logging trucks.

Michel Coulombe and Lauren Player M. Boreal Logging owner Michel Coulombe (left) a member of the co-op, discusses harvesting operations with Lauren Player, Ainsworth Operational Forester. Player says the co-operative continues to work well because Ainsworth is working with very experienced loggers, such as Coulombe.

The argument for hiring larger contractors often revolves around greater efficiency, productivity and consistent product. However, because the responsibility of fulfilling contract requirements is squarely on their shoulders, Player has noticed a great deal of care by each owner/operator to meet their obligations.

“It is in their best interest to maintain productivity because that is how they make their money,” she says. “They know their equipment and they are very efficient.”

When asked what fallback plan he has should one of his pieces of equipment break down, Coulombe answers, “I fix it. I don’t have a spare but I keep the maintenance up. I have regularly scheduled maintenance where I do the service every 250 hours like the oil changes and all the filters. The equipment has lots of hours, so you have to keep them in good shape and keep them running.”

Coulombe understands that the equipment won’t run efficiently forever, so he plans to replace at least one of his processors this year. He also employs very experienced operators who service the equipment every shift, with the youngest operator being 36 years old.

Arlint, who is an original Owner/Ops Group member and recently sold his processing equipment to Coulombe, agrees that there is a direct connection between the group’s productivity and performance, and the fact that they own and operate the equipment.

“I am dependent upon them,” he says of his Cat D7XR and Cat D7G dozers. “And I am also the one expensing the repairs. So, you know over the years what to watch for—usually what’s going to be troublesome. If you keep your maintenance up, it will save you a lot of money in the long run.”

Arlint adds that the opportunity to potentially make more money as an owner rather than collecting a paycheque as an employee or working as a sub-contractor is another attraction to working as an owner/operator. It is also a motivation to want to be on-site and working directly with the equipment. The group members also help each other out, as needed.

“There are no mix-ups or concerns because Michel, Andre or myself are always out here so the operators always have someone to contact,” says Arlint. “We have a lot of experience under our belts, and financially it’s a little easier to buy a couple of pieces of equipment than a full-fledged logging operation.”

Ritchie says among the keys to the group’s success is their good communication. They were all familiar with each other; they had worked together with another contractor before becoming part of the Owner/Ops Group.

“As you are working as three different contractors, communication has to be number one,” says Ritchie. “It is not always easy when you are all working on different phases of the harvesting operation.” It really helps, he adds, that they all have a lot of experience working within the industry, so there is considerable respect for each other.

One of the benefits of being their own boss is that it gives the owner/operators more flexibility. For example, if they need to take some time off, they can plan for it as long as they will be able to meet their production obligations and they communicate with the other members of the co-op, as well as with Ainsworth. Conversely, if they need to work some extra hours to meet production targets, they can decide on their own to do it and not have to worry about paying overtime.

Coulombe says given the example provided by the Ainsworth Owner/Ops Group, other companies may want to consider a similar approach to make room for the smaller businessman.

“We are present and hands-on all the time,” says Coulombe. “We find the best way to manage our operators, our production and our quality. If you have guys that can work together, I think it is a good model. It is quite efficient.” Ritchie and Arlint agree that other companies should consider adopting this model for at least a portion of their overall annual cut.

Ainsworth Lumber’s Noel Roberts says that the results speak for themselves, and despite the extra administration required by company, it has definitely been worthwhile. For any company thinking about making this option available, he says that is important to have a group of owner/operators who can work well together. Ainsworth in Grande Prairie has been fortunate with their group because they cooperate very well. The relationship has been described to him as like a marriage, where good communication is the key to success.

“I can only speak to the results that I have seen in the past years,” says Roberts. “The results have always been good. They take a lot of pride in what they do. They do a very, very good job, and they do things safely and efficiently. Really from our standpoint, that is what we would expect. We hope that they continue with us for a long time."

September 2012

Making roomfor small contractors

In an era of large logging contractors, Ainsworth Lumber in Alberta is making room for smaller contractors with an Owners/Ops Group that allows a group of individual owner/operators to work cooperatively to harvest and deliver wood to roadside.