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