Evaluating Profitability of Individual Timber Deliveries in the US South

Abstract

Timber transportation is an essential and often unprofitable segment of the wood supply chain. This study evaluated the profitability of individual timber deliveries for log truck owners in the US South. Origin and destination data were collected from 909 deliveries from 257 harvest sites. Travel time and distance were estimated using ArcGIS and GPS tracking. Monte Carlo Simulation was used to calculate 1000 unique combinations of payload, harvest site turn-time, mill turn-time, and percent-loaded km, yielding a dataset of 909,000 deliveries. Hauling costs and revenues for each delivery were estimated using published estimates. Driver wages were estimated in two ways: an hourly wage of $30.60 (USD) and 30% of the gross revenue from the load being delivered. Logistic regression was used to evaluate the relationship between six dependent variables and profitability. Only 14% of deliveries were profitable when the driver was paid an hourly wage versus 42% when the driver was paid 30% of gross revenue. Deliveries with one-way haul distances between 49 and 113 km (31–70 mi) were least likely to be profitable. Many deliveries could be profitable if logging businesses and mills reduced turn-times to under 20 min at mills and 30 min at harvest sites.