Benchmarking 2019 data and longer-term productivity and cost analyses

Abstract

The drivers of productivity and cost of logging operations are important as productivity is a major determinant of the logging rate and the cost of logging operations directly affects the bottom line of both forest management companies and independent harvesting contractors. Understanding the drivers of logging cost and productivity is also important in considering alternative harvest systems as forest stand and terrain conditions change. Benchmarking harvesting cost and productivity across different conditions is one way for forest management companies and contractors to understand these drivers. Forest Growers Research Ltd has been operating a benchmarking system, managed by the School of Forestry, University of Canterbury, for 12 years with a total of 1652 unique harvest area entries contributed from 2008 to 2019. The benchmarking database records standardised parameters relating to forest stand details, terrain details, and harvesting crew information on actual and completed logging operations by harvest area. This information includes tree size (tonnes), stand volume (tonnes/ha) and harvest area (ha), extraction distance (m), average slope (%), machine and labour usage, system productivity and actual logging rate. This report is in two parts: the first part reports on results of the 2019 benchmarking data and trends; and part two analyses the whole database. Part one reports the results of 163 harvest area entries harvested in 2019. Part two of this report is a detailed evaluation of the 1600 unique entries received over the past 12 years (2008-2019). It analyses the key factors that influence productivity and logging rates and provides a series of regression equations that help improve our understanding of terrain and stand influences. The overall average logging rate for ground-based operations increased to $28.70/tonne, which is up $0.35 compared to 2018 data. The ground-based logging rates ranged from $18/tonne for a mechanised grapple skidder operation, through to $50/tonne for a manual felling/skidder combination working in a difficult setting. For cable logging the average logging rate was $42.20/tonne, which was a $0.95 increase from the previous year. The lowest rate in the 2019 sample was for a swing yarder in a mechanised felling two-staging operation at $24/tonne, through to a high of $58/tonne for a manual felling tower yarder operation with poor deflection. In cable logging operations the level of mechanised felling has continued to increase, now up to 40% of steep terrain operations. An additional 40 entries were received where the operation was supported by winch-assist, with all but six for yarder operations (the balance was in ground-based operations). While early indications were that winch-assist added a cost that was not recovered through increased productivity, in 2018 data that trend reversed with an average logging rate lower by $1.25/tonne. That change has been confirmed this year with the logging rate lower by $2.00/tonne for the 2019 data while also seeing an increase in productivity of 2 tonnes/hour in productivity. This reflects the industry becoming more confident and experienced with implementation of winch-assist. With logging rates adjusted to 2019 values using the Producer Price Index, the mean harvesting contract rate was NZD $34.24/tonne, but it varied significantly between harvest methods. Harvesting contract rates for cable-based operations, being more labour intensive and lower productivity, were significantly higher than ground-based operations at $40.30/tonne and $27.90/tonne, respectively. The study highlighted differences in rates across the years, forest regions and seasons of harvest.