The carbon tax on fuel is an expensive sore point with loggers and truckers alike. Some forest companies allow for it in rates, others do not.
When asked whether his forest company would recognize the carbon tax in logging and trucking rates, a manager said no – that the tax is ‘revenue neutral.’
To the government, yes, but not to the harvest sector.
When it introduced the carbon tax, government said the revenue would go to creating some tax breaks for industry and reduced income taxes for B.C. residents – it would be revenue neutral.
Loggers and truckers pay that tax and have no way of getting it back through rebates, so it’s a cost of doing business that should be covered in the rates they’re paid.
By Roy Nagel
At every level, our industry is in the midst of the biggest overhaul of process, policy and mindset in decades. There is no ‘normal’ any more, the old ways are gone, and keeping up with change and influencing it are crucial to planning for the future.
This blog is my effort to help steer and push change in directions that will help, in particular, members of the harvest sector and related business communities.
Thursday, August 26, 2010
What's Happening to Rates?
Since February/March, the number of logging contractors who have approached the CILA in need of help to resolve rate stand-offs has been staggering – as many in five months as in the previous five years!
Why?
I think these rate stand-offs show more desperation than malicious planning by forest companies. Their managers are quick to point out that they’ve been losing money (or not making as much) for the past two years, and have to cut costs.
In a few situations they’ve tackled the mill worker unions and gained wage rollbacks, but mostly they find it easier to cut logging and trucking rates.
Until this spring, contractors were not in the habit of working together or sharing much information.
But, faced with no opportunity to negotiate, take-it-or-leave-it rate offers, threats of no work unless the contract is signed, and pressure to bid for the work, some contractors banded together to share information and develop strategies for rate and amount-of-work negotiations.
It’s a competitive business with no guarantees. Getting a logging or trucking rate that covers costs and provides some profit is not a slam-dunk; some contractors always willing to accept less money, undermining the effort.
Some risk all and bid too low, undermining their futures.
Supply and demand work against contractors now; there’s more logging capacity than there is work, although that will change.
Meanwhile, how do you cope? What are your rates now, compared with three years ago? Are you staying in the business?
What does the future look like to you?
To respond, hit the “comments” link below – and no, we won’t print your name.
Roy Nagel
Why?
I think these rate stand-offs show more desperation than malicious planning by forest companies. Their managers are quick to point out that they’ve been losing money (or not making as much) for the past two years, and have to cut costs.
In a few situations they’ve tackled the mill worker unions and gained wage rollbacks, but mostly they find it easier to cut logging and trucking rates.
Until this spring, contractors were not in the habit of working together or sharing much information.
But, faced with no opportunity to negotiate, take-it-or-leave-it rate offers, threats of no work unless the contract is signed, and pressure to bid for the work, some contractors banded together to share information and develop strategies for rate and amount-of-work negotiations.
It’s a competitive business with no guarantees. Getting a logging or trucking rate that covers costs and provides some profit is not a slam-dunk; some contractors always willing to accept less money, undermining the effort.
Some risk all and bid too low, undermining their futures.
Supply and demand work against contractors now; there’s more logging capacity than there is work, although that will change.
Meanwhile, how do you cope? What are your rates now, compared with three years ago? Are you staying in the business?
What does the future look like to you?
To respond, hit the “comments” link below – and no, we won’t print your name.
Roy Nagel
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