TRUCK, RAIL AND WATER TRANSPORT OF RAW WOOD IN
THE BRITISH COLUMBIA FOREST INDUSTRY
by
William Parchomchuk
B.S.F., University of British Columbia, 1968
A THESIS SUBMITTED IN PARTIAL FULFILMENT OF
THE REQUIREMENTS FOR THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
in the Department
of
COMMERCE AND BUSINESS ADMINISTRATION
We accept this thesis as conforming to the
required .standard
THE UNIVERSITY OF BRITISH COLUMBIA
July, 1968 In presenting this thesis in partial fulfilment of the requirements for an advanced degree at the University of British Columbia, I agree that the
Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the Head of my Department or by his represen• tatives. It is understood that copying or publication of this thesis.for financial gain shall not be allowed without my written permission.
Department of Commerce and Business Administration.
The University of British Columbia Vancouver 8, Canada
Date SEPTEMBER 2 7} /9f* ABSTRACT
This thesis deals with a comparative economic analysis of the truck, rail and water modes of transporting raw wood in the British Columbia Forest Industry. The thesis is directed toward establishing general guidelines for the determination of the optimal mode or combination of modes for transporting wood from the forest to consuming plants.
Companies holding large tracts of timber find it necessary to do a comparative analysis of each transportation mode for their own specific situation before designing a transportation network. Since the location of wood-using plants has considerable effect upon transportation networks, this topic is also included in the thesis.
The first part of the thesis shows the importance and the variety of transportation methods employed in the
British Columbia Forest Industry. The largest portion of logging costs is directly attributable to transportation.
Improved technology has led to several important changes in forest transportation in recent years. These are mainly the change-over from private logging railways to truck transport, and the complete change from Davis rafts to self-loading and self-dumping barges.
A large portion of the thesis is concerned with a graphical comparison of transfer rates for raw forest i i i products over distance for each of the transportation modes. Break-even distances between modes were calculated graphically. This portion of the study was accomplished by gathering province-wide transfer rates for raw wood from the Canadian National Railways, the Canadian Pacific
Railway, the Pacific Great Eastern Railway, the Motor
Carriers Branch of the Public Utilities Commission, various trucking firms, tugboat companies, forestry firms, and the
British Columbia Forest Service. Rates for various distances were plotted for each mode and forest product.
Curves and intersections were analysed.
In the transfer of logs, it was found that water rates are the lowest even at short distances. This is unlike transfer rates for other commodities where at short distances, water transfer rates are higher than both truck and railway rates. The buoyancy and ruggedness of wood make it naturally suited to low cost forms of water transport, especially by flat raft where investment in vessels is mi nimal .
Average log transfer rates for truck and rail indicate a break-even distance between these modes of about 15 miles.
When considering that most log hauls originate by truck, the cost of transshipping to rail cars causes the actual break-even to occur at about 70 miles.
A similar analysis was carried out for chip and lumber transfer rates. A comparison on a common per i v hundredweight basis is made of transfer rates for logs, chips, and lumber by all modes.
A comparison of average transfer rates indicates an economic line-haul distance for logs of about 90 miles by truck, 270 miles by rail, and 1,000 miles by barge when $12 hauling allowance remains after gathering logs at transportation terminals. Actual hauls throughout the province rarely exceed the above distances.
Many other economic aspects of the above modes besides rates, are of considerable importance and are considered in some detail in three separate chapters.
For example, the construction of private roads or roads of higher standard may favorably affect costs, depending upon the volume of timber to be hauled.
Since timber is heavy and bulky, and experiences a large weight loss upon conversion, mills have tended to be raw-material oriented rather than market oriented.
However, on coastal British Columbia, mills tend to be more centralized, with the resource being gathered over a wide area by using cheap water transportation.
Future technological developments may result in the use of pipelines, helicopters, and conveyor belts in the transfer of raw forest products. V
TABLE OF CONTENTS
CHAPTER PAGE
I. INTRODUCTION 1
Objective and Scope of Study 1
Importance of Study 3
History 8
ThesisOutline 12
II. TRUCK, RAIL AND WATER RATES FOR RAW WOOD ... 13
Truck, Rail and Water Rates for Logs .... 18
Water Rates 21
Truck and Rail Break-even Distance for
Logs 24
Truck, Rail and Water Rates for Chips ... 26
Break-even Distances for Chips ...... 28
Truck and Rail Rates for Lumber 30
Truck and Rail Break-even Distances
for Lumber 33
Effect of Raw Materials Form on Transport
Costs 35
Weight for Weight Comparison of Log, Chip,
and Lumber Rates 38
III.. TRUCK TRANSPORTATION OF RAW WOOD 44
Effect of Seasonality and Topography .... 45 vi
CHAPTER PAGE
Seasonality 45
Topography 46
Capital and Operating Costs 47
Capital Costs 47
Operating Costs 50
Private Roads versus Public Road Systems ... 51
Road Standards . . . . 57
Truck-trailer Trains 60
Economic Haul Distance 62
Truck Flexibility 64
IV. RAIL TRANSPORTATION OF RAW WOOD 67
Capital and Operating Costs 68
Log Handl i ng . . 70
Chip Handling .... 71
Weaknesses of Logging Railroads 72
V. WATER TRANSPORTATION OF RAW WOOD 73
Self-loading, Self-dumping Log Barges 74
Capital Costs 75
Log Handling Required 75
Flat Rafts . 76
Major Coastal Log Flows 77
Chip Scows 79
River Driving 80
Investment in River Improvements . 82
Risk and Seasonality 83 vi i
CHAPTER PAGE.
VI. MILL LOCATION AND SPACING IN RELATION TO
THE TIMBER RESOURCE AND TRANSPORTATION
MODES 86
Influence of Resource Density and
Quality on Transportation 87
Influence of Increased Wood Utilization
on Transportation and Mill Location ... 88
Influence of Transportation on Land
Use and Mill Location 89
Influence of Geography on Transportation
and Mill Location 90
VII. SUMMARY AND CONCLUSIONS 91
Areas Requiring Further Study 94
Future Transportation Systems Under
Development 94
BIBLIOGRAPHY . . 96
INTERVIEWS . . 103 APPENDIX I 105
APPENDIX I - A: Truck and Flat Raft Transport Rates for Logs 106
APPENDIX I - B: Rail and Barge Transport Rates for Logs 107
APPENDIX I - C: Truck, Rail and Scow Transport Rates for Chips 108
APPENDIX I - D: Truck and Rail Transport Rates for Lumber 109 v i i i
LIST OF TABLES
TABLE PAGE
I. Volume of British Columbia Coastal Timber
Handled by Mode, 1 950 1 0
II. Hypothetical Cost per 100 lbs. Incurred by a
Carrier in Moving Goods Various Distances
by Truek 15
III. Railway Commodity Rates for Lumber to
Prince George 34
IV. Residue Upon Conversion of Sound Wood Portion
of Spruce and Balsam Logs to Lumber -
Prince George 3 7
V. Percentage Comparison of Major Trucking Costs . 52
VI. Cost Comparison of Several Different Load
Sizes for a Sixty Mile Off-Highway Haul ... 56
VII. Suggested Specifications of Three Road
Classes 58
VIII. Total Hauling Cost per Thousand Board Feet
for Three Different Road Classes 59
IX. Comparison Between Single Trailer Haul and
Truck-train Haul of Estimated Truck
Operating Costs per Mile of Travel 63
X. Pulpwood Deliveries in Eastern Canada by
Mode for the Periods 1951-52 and 1961-62 . . 81 i x
LIST OF FIGURES
FIGURE PAGE
1. British Columbia Systems of Log Transport
from Stump to Mill 4
2. Truck, Rail and Water Transfer Rates Compared 16
3. Truck, Rail, and Water Transport Rates
for Logs : 19
4. Truck, Rail, and Scow Transport Rates for Chips 27
5. Truck and Rail Transport Rates for Lumber ... 32
6. Comparison of Transport Rates by Weight
for Logs, Chips and Lumber for Different
Modes 40
7. Log Transport Costs on Public and Private Roads 53 CHAPTER I
INTRODUCTION
The major problem of the British Columbia Forest
Industry is one of transportation. It is safe to say there is no major industry in which transportation problems and delivery costs of raw material are of more importance than the forest industry's movement of wood from its initial location in the standing forest to wood-using plants. The transportation problem increases as nearby areas of the resource are depleted. Sloan observed in 1956, that as areas of easy accessibility and relatively cheap logging in
British Columbia became scarcer in the 1940's, and demands grew sharper, loggers found that they were forced to acquire tracts of timber that were less accessible, requiring more costly road construction and heavier, more expensive equipment.1 Technological improvements and constant economic studies of forest transportation systems have helped to minimize costs as transportation difficulties increase.
Objective and Scope of Study
This thesis is directed toward a central objective
'G. McG. Sloan, Report of The Commissioner, The Forest Resources of British Columbia, Don McDiarmid, Victoria, B.C., p. 339. 2 which is to analyse and compare truck, rail and water rates for the movement of logs and chips in British Columbia; establish a rate-distance break-even between these modes; and to evaluate the major economic and technical considerations surrounding each mode, i.e., establish guide• lines for selecting alternate modes of log and chip transport. An analysis of this nature may be considered by a forest products company which owns a large tract of timber, and seeks to establish the best mode or combination of modes to get the timber from the forest to plants.
Discussion will be directed mainly toward log trans• portation, and to a lesser degree ,chip transportation.
Lumber will be mentioned only to the extent that it may be desirable to convert logs to lumber within a short distance of the timber source to take advantage of weight reductions in shipping. This study centers around the British Columbia situation, with few references to outside areas.
Although transportation rates, logging costs and technical considerations mentioned in the thesis are applicable throughout British Columbia, it is emphasized that conditions for log production throughout the province vary according to timber size, volume, species, location, terrain, equipment used, and numerous other factors. For example, trucking rates are expected to be higher on public roads than on private roads. Where rate-distance schedules are mentioned, surrounding information will be given. 3
Comparisons will be made, not only between the different modes of transportation, but also between variations common within each mode.
Importance of Study
The forest transportation problem is intensified by the physical characteristics and distribution of raw wood.
Timber is heavy and bulky and grows over vast areas, under varying conditions of climate, topography, and accessibility to plants. Forests grow from sea-level swamps to high mountain slopes, up to 6,000 or 7,000 feet elevation in
British Columbia. The timber itself may vary in size, species, quality, density and end use. These varying conditions lead to a wide variety of timber extraction methods, and various combinations of methods. Figure 1 shows the major modes and combinations of modes which are used in
British Columbia log transport. A wide variation of equip• ment, type is found in each mode. Each mode is best suited to a particular terrain, volume, distance and geography.
The primary transport function consists of gathering logs where they are felled and skidding them, generally up to 2,000 feet, to a central roadside assembly point or landing. Rugged equipment designed to meet rough off-road operating conditions is used in this primary phase, but is economical only over short distances; consequently, transshipment to a rail car or truck is required for the longer haul to mills, which could be a few miles, to several 1
STU MP
TRACTOR TRACTOR HIGHLEAD Primary Transport (Arch-type skidder)
MILL
LANDING
TRUCK RAIL I I MILL OCEAN RAIL RIVER LAKE MILL OCEAN LAKE
(Raft or (Boom) (Raft or barge) barge)
I MILL MILL MILL MILL
l-M ILL Secon• dary Trans- OR LAKE(Boom)-MILL port
OR L.QCEAN(Raf t)-MILL
-MILL
ORI-OCEAN (Raft)- MILL
FIGURE 1
BRITISH COLUMBIA SYSTEMS OF LOG TRANSPORT FROM STUMP TO MILL 5
hundred miles away. This secondary or long-haul transport
involving truck, rail, and water, will be the main concern of this thesis.
Although each mode is best suited for its own set of
line-haul conditions, it is not always economical to use
the lowest cost mode because transshipment costs may exceed
the economies gained. An example of such a case is found
in a large logging operation on northern Vancouver Island.
Until a few years ago the following transport sequence was
employed: from landing to truck; by truck to railhead; by
rail to lake; lake tow for 20 miles to rail; and then by
rail again, to ocean. The company wished to take advantage
of the very low comparative costs of towing for a 20-mile
stretch of the haul, but the extra handling cost into and out of the lake proved to be inefficient. Up to four trans•
shipments occurred. Consequently, a direct rail connection 2 has been made at a cost of about $5,000,000 for 20 miles.
Occasionally, when the mill is nearby, transshipment
can be avoided entirely by skidding directly to the mill
over distances of up to two or three miles, using modified
skidding equipment (e.g. arch-truck). This method, combined
with portable sawmills, was common in the Caribou and
northern interior regions of the province until several
years ago. Portable mills have largely been eliminated now
K. Thomas, Canadian Forest Products Limited, Interview, Vancouver, March, 1968. 6 in favor of more central locations.
The importance of transportation in forestry is reflected in the large portion of total logging costs which are directly assignable to transportation. The
British Columbia Forest Service has compiled operating costs for 35 large and small companies in the Vancouver
Forest District. The average logging cost, excluding stumpage, was $24 per cunit;* the range was from $20 to
$30 per cunit. About $17 out of $24, or 71 per cent of the cost is directly attributable to transportation. A break• down of costs in one compartment of a large company's logging operations on the northwest coast is as follows:
Cost/cuni t
Stumpage and royalty $3.00 Falling and bucking 2.10 Sort and scale 1.66 $6.76
Transportation:
Yarding 10.23 Loading 1.61 Road 3.63 Truck haul--18 miles 4.24 Water transport 4.53 24.24 $31.00
Source: Confidential, Company Working Plans, 1967.
Over 78 per cent of the above costs are incurred by transportation phases.
*0ne cunit equals 100 cubic feet of wood. 7
Logs are of very little value in their natural state in the standing forest. Stumpage value is quite small compared to the value of the log when delivered to the plant. The largest portion of the price payed at the mill is vested directly in the cost of log delivery. If delivery costs to the nearest mill are exceedingly high, the value of the standing tree (stumpage) may be almost negligible. Government foresters estimate operating costs
(including transportation) to the nearest mill which processes logs of a particular species, and determine the current market price of the logs. Stumpage charged is a fraction of the difference between costs and price.
Transportation cost is the major determinant of stumpage.
In British Columbia, approximately 1.5 billion cubic feet, or roughly, 30 million tons of timber, are cut annually, and transported from distances of two or three miles, up to 600 miles, for processing. Assuming an average cost of $20 per cunit for transportation, the annual cost to move the above timber is $300,000,000.
The above discussion indicates the importance of transportation costs and the variety of transportation systems in the forest industry. Almost every tree is a separate problem. A brief discussion of the history of
log transport follows, in order that a better understanding of the present system may be acquired. 8
History
Probably the first record concerning timber transportation is found in the story of Solomon's Temple, some 3,000 years ago, when the King of Tyre contracted to deliver cedars from the stands of Lebanon via raft on the
Mediterranean to Jerusalem, a distance of about 150 miles.
In Europe, during the medieval period, the Volga, Elbe, and Rhine rivers became important arteries for timber transportation. For more than 200 years in eastern Canada, and in the New England and Lake States, the customary means of transport were streams. Cutting, and horse skidding in the late fall, team hauling with sleighs during the winter, and spring driving, typified logging operations in the nineteenth century. This conventional system is still used
in some operations, but with modern equipment. The unreliability of river transport, and the increasing distance of the timber source from water, brought in the logging railway during the 1880's. Toward the end of the nineteenth century, as timber supplies became depleted in the East, attention was focused on the high quality stands of timber remaining in the Northwest and British Columbia.
The commercial forest industry is relatively new in
British Columbia, having started about 100 years ago. The first loggers looked for timber directly on ocean or coastal river banks. Areas with easy access and close
proximity to civilization were cut first. As timber 9 adjacent to water became scarcer, oxen were employed to skid
to tidal water for distances of up to two or three miles.
As the higher quality coastal stands became depleted by 1900,
it became necessary to penetrate the large coastal valleys
by rail. By 1925, about 1,000 miles of track was built in
Coastal British Columbia by 170 operators.
Probably the two most dramatic changes in British
Columbia log transportation since the turn of the century are the almost complete switch from rail to truck transport, and replacement of the Davis raft with self-loading and
self-dumping log barges. Logging railways reached their
peak in the early 1930's and from then on began to decline with the rapid advancement and improvements in logging
trucks. The miles of logging railway line decreased from
1,000 in 1925, to about 600 in 1949. Presently, there are only about 100 miles of logging railroad active in British
Columbia. Three separate companies, Canadian Forest
Products, Crown Zellerbach Limited, and MacMillan and
Bloedel Limited, own two rail lines which are fed by truck.
Public railways continue to carry a small portion of logs
over part of their journey, especially in the interior.
Data showing how logs were handled on the British Columbia
coast in 1950, indicate the predominance of truck logging,
as presented in Table 1.
Since 1950, the trend to trucking has continued. It
is safe to say that now almost 100 per cent of the annual 10
TABLE I
VOLUME OF BRITISH COLUMBIA COASTAL TIMBER HANDLED BY MODE, 1950
Millions of Transport Mode board feet Percentage
Exclusively by rail 512 15
Combination of truck and rail 314 9
Exclusively by truck 2,362 69
Yarded directly to water 180 5
Source: Trends to Trucks in British Columbia Logging Revo!utionary, The Lumberman, September, 1951, p. 73. 11 cut is moved by truck for at least the initial portion of the haul.
Several other factors have contributed toward the change-over to trucking. As large valleys were depleted of timber, railways could not tolerate the steeper grades required to reach timber along the side slopes. Smaller patches of timber can be reached more economically by truck since fixed capital investment is not as great as in rail lines. Improved road building techniques, better public highways, and improved equipment design have encouraged the use of logging trucks. Trucks are more flexible to meet requirements of speed, volume and distance, and can be used to supplement traditional modes of transport.
The second important change (from Davis raft to self- loading and self-dumping barge) was complete in 1959, when the last Davis raft made its journey. The first Davis raft built in 1911 was designed to withstand the heavy swell of open water, and to facilitate the movement of logs on the west coast of Vancouver Island, and from the Queen Charlotte
Islands to Vancouver. These rafts often were a long time in reaching their destination, due to bad weather and slow towing speeds. Rafts were time consuming to build, and often fell mercy to high seas. The extra economies of speed of loading, speed of towing, speed of discharge, and safety, associated with barge transport, have been major reasons for replacement of the Davis raft in long tows. Flat rafts are still widely used for shorter tows in protected waters.
Although certain rivers have been used and are still being used in British Columbia for delivery of wood by log drive, the extent of this mode is minor compared with eastern Canada where river driving has been of considerable importance, but is now being displaced by trucks.
Thesis Outline
Chapter II deals mainly with a graphical analysis and comparison of rates by mode, on a distance basis.
Rates were gathered from various sources throughout the province. Effects of transshipment, and raw materials form (logs, chips or lumber) are also considered.
Chapter III deals with various considerations of the trucking mode, namely: private versus public roads; truck-trailer trains, flexibility, and economic haul distance. The less important railway mode is discussed in
Chapter IV. The water movement of logs and chips by barge, flat raft, and river drive, forms the content of Chapter V.
Channels of access and available transportation facilities often determine the location and spacing of sawmills and pulpmills. Chapter VI deals with the proximity of plants to the resource and transportation modes. Conclusions in
Chapter VII relate the various conditions to which each mode is best suited. Future modes and suggestions for areas of further study are mentioned. CHAPTER II
TRUCK, RAIL AND WATER RATES FOR RAW WOOD
The contents of this chapter, which is designed to compare the rate structure of each mode, are based almost entirely on the analysis of rates gathered from the
Canadian National Railway (CNR), the Canadian Pacific
Railway (CPR), the Pacific Great Eastern Railway (PGE), the
British Columbia Forest Service, the Public Utilities
Commission (Motor Carriers Branch), the Bureau of Economics and Statistics, towing companies, and various firms in the forest industry. Mileages between points with given rates were computed.
Many company rates are of a confidential nature; consequently, extended detail may be omitted. Rates are often listed for different units of measurement for forest products (e.g. board foot measure, cubic foot measure, units of volume, and weight measure) by various agencies. Rates for lumber may also vary according to whether it is rough or dressed, or green, or dried to a known moisture content.
The confronting problem of converting to a common unit of measure was solved by employing a schedule of conversion factors for British Columbia forest products,1 and by constant
^F. W. Guernsey, Some Conversion Factors for British Columbia Forest Products, Canada Department of Northern Affairs and National Resources, Forestry Branch, Vancouver Laboratory, Ottawa, 1959, 16 pp. cross-checking. The presentation of rates in this chapter is the bare summary of a collection of much detailed raw data. The reader is reminded that many rates represented here, are of a general nature. Variations can be expected when analysing specific situations.
Discussion of rates in this chapter follows theoretical models outlined by Duerr. Table II represents hypothetical costs per 100 pounds incurred by a carrier in moving goods various distances by truck. Costs over a uniform route tend to be perfectly correlated with distance. Terminal costs are about the same amount, whether the haul is long or short.
This is the carrier's fixed cost of transfer. The other part of the cost, which depends directly upon the distance the load is moved, is called line-haul cost, and represents the carrier's variable cost of transfer. Terminal costs per unit of volume are determined by the firm's overhead, total volume of freight, and loading facilities required.
Typical line-haul and terminal costs for truck, rail, and water modes, are graphically illustrated in Figure 2.
Truck transfer, characteristically, has a low terminal cost and a high line-haul cost. Water transfer, on the other hand, typically has a high terminal cost, but a low line-haul cost, so long as the carrier operates at the relatively slow speed at which he is efficient. Railroads often stand in the
*W. A. Duerr, Forestry Economics (New York, Toronto, London: McGraw-Hill Book Company, 1960), pp. 163-167. 1 5
TABLE II
HYPOTHETICAL COST PER 100 LBS. INCURRED BY A CARRIER IN MOVING GOODS VARIOUS DISTANCES BY TRUCK
L i ne-haul Distance Terminal cost cost Total cost (miles) (cents) (cents) (cents)
100 5 5 10
200 5 10 15
300 5 15 20
400 5 20 25
500 5 25 30
SOURCE: W. A. Duerr, Forestry Economics (New York, Toronto, London: McGraw-Hill Book Company, 1 960), p~. r6~4. OtSTANCE FIGURE 2. - TRUCK , RAIL AND WATER TRANSFER RATES COM PARED (HYPOTHETICAL) 1 7 intermediate position with respect to these costs.
Rates are often affected by competition between various carriers. For the shorter distances, competition is between truck and rail carriers. For this distance, the rate is not below truck costs, nor is it above rail carrier costs. The rates will therefore tend to be intermediate, and in general, for any distance, they will tend to be intermediate between the costs of the two most economical modes of transfer. The broken line in Figure 2, represents the effect of competition.
Established transfer rates are often not continuous over distance, as shown in Figure 2, but change in steps or zones. Shipments between 60 or 80 miles from origin, or between two stations, may be charged the same rate.
The three points of intersection in Figure 2 are break-even points. Each point marks the distance at which two of the modes of transfer are equally economical. The break-even points between truck and rail, and between rail and water, are significant since they demarcate the major zones of cheapest transfer. The modes cheapest at longer distances are those with lower line-haul costs. The data used in the above discussion are merely by way of example.
Distances at which break-even points actually occur, depend upon many circumstances and will therefore vary widely.
Some important differences to consider are: type of product, volume, private road versus public road, size and type of 18
•vehicle, road standards, and allowances for reshipment.
The above theoretical considerations will now be applied to the current transportation situation in the
British Columbia Forest Industry.
Truck, Rail and Water Rates for Logs
Figure 3 presents graphically, rates in effect during
1967 for the various modes of log transport. Scatter diagrams showing the derivation of rate curves for logs, chips, and lumber, by all modes are contained in the appendices. Trucking rates presented here, using data gathered from the public utilities commission, represent a province- wide average rate for common and contract carriers delivering logs to mills over public roads. Rates were analysed by type of carrier and by Highway Licence Districts, and no noticeable variation was found. Railway rates represent point-to-point commodity rates for logs, applied by the three railways in the province. It is assumed that minimum volume requirements, usually a full carload (about 9,000 board feet), and sometimes up to 10 cars, are met. Almost all logs shipped by rail qualify for lower rates since logs will be manufactured and reshipped by rail in the form of the finished product. Barge rates shown, apply to larger companies towing substantial volumes in unprotected waters.
Rates are slightly lower in sheltered waters. Flat-raft rates shown here include insurance, and largely represent
20 a series of point-to-point rates, applicable in sheltered water, prepared by the British Columbia Forest Service for
the purposes of stumpage appraisal to medium-sized operators.. These rates could be 20 to 30 per cent lower for
large operators owning their own towing fleets, or
negotiating with towing companies. Direct costs associated with river drive are low, compared with other modes. Each river situation differs, so that the costs shown in Figure 3,
represent merely an estimate derived from calculated costs experienced by various companies. River cost would be about
50 to 100 per cent higher than shown, if inventory charges are added.
It is assumed that the loading portion of terminal costs is the same for all modes, and therefore is excluded.
However, each individual operator working under a specific
set of conditions, using his own specialized type of handling
equipment, may find loading and unloading costs vary between modes, and this may be an important consideration when
choosing modes. Loading costs per cunit incurred by some
companies are as follows: barge loading, $.60 to $1.00;
reloading to rail, $.60 to $1.00; and truck loading, $1.50
to $2.50.3 Assembling logs into flat-rafts for transport
costs from $1.00 to $2.00, and can be regarded as a cost
similar to loading, in that both operations serve the same
3Confidential, Company Records, 1967. 21
basic purpose of positioning logs for the line-haul.
Loading onto barges costs slightly less than for other modes,
while loading onto trucks in the forest operation is
slightly higher, probably due to space restrictions and more
rugged, versatile, and highly mobile equipment required to
load smaller volumes at numerous locations. Costs for
reloading from truck onto rail can be fairly low if the whole
load is lifted at once. However, this requires careful
loading of smaller loads on trucks. Often it is necessary
to break the load and handle the timber almost piece by
piece. Sorting may also be done at this point.
If we assume a loading cost of $1.00/cunit, for all
modes, this merely causes an upward shift of $1.00 of all
points in Figure 3, on each curve, except the curve repre•
senting river drive, which will stay the same since no loading
is required by this mode. Each individual operator may
choose to shift each curve by varying amounts.
The remaining portion of terminal costs indicated in
Figure 3, are attributable to waiting time of rolling stock
and vessels, and to costs of making the equipment available
at points of shipment.
Water Rates. A point of interest revealed in Figure 3,
is the low cost of water-transport of logs, compared to other modes. In the transport of most commodities, the curve
representing water rates, crosses rail and truck rate
curves well above the break-even point of these latter two 2 2 modes, as shown in Figure 2. However, in the transport of logs, the rate for flat-raft falls well below even the terminal cost incurred in truck and rail transport. This can be explained through one simple and unique physical quality of wood, namely, buoyancy. Wood floats in water and therefore the commodity becomes the vessel, as well, when it is shipped via flat-raft. No large amounts of money are spent for port facilities or waiting time of expensive vessels. Loading into a vessel is not required.
However, this is partly counteracted by booming charges.
Tugs need not appear for towing until rafts are completely assembled, thereby allowing for greater utilization of transport motive power. Terminal costs for self-loading and self-dumping barges are higher than for flat-rafts because of the degree of capital involvement. A large barge is valued at between $1,000,000 and $1,750,000,4 and the tug required to tow it, costs about $1,250,000.5 However, speed of unloading, and loading without requiring port facilities, keeps barge costs for logs well below regular shipping costs for other commodities.
Flat-rafts are more economical than barges over short distances in sheltered waters. Substantial fixed costs
D. Stewart, Island Tug and Barge Ltd., Vancouver, B.C., Interview, February, 1 968.
^H. R. Cooper, Captain, Vancouver Tug Boat Co. Ltd., Vancouver, B.C., Interview, March, 1968. have to be met by barge over short distances, and where
long waits are involved. It is impractical to use flat-rafts
in open water as found in the Queen Charlotte Strait and the
west coast of Vancouver Island; consequently, barges are
often used in these areas for tows as short as 50 or 60
miles. Barge rates may show a slight taper when distances
of about 400 miles are reached, as a result of easier
• scheduling and less risk of terminal delays, since terminal
stops will be reduced considerably. Flat-raft rates are
influenced by rougher water on wider straits, by channel
conditions, and by tidal zones. Rates rise rapidly for tows
along the coast immediately north of Howe Sound and across
Georgia Strait. The upward curve in Figure 3, for distances
up to 50 miles indicates these increasing rates. Increases
in rates are proportional to increased distance northward
as far as the major tidal passages. Then, at the rapids,
where tidal currents reach sizable proportions, rates rise
steeply again. Another rapid rise is noted in the Queen
Charlotte Strait. Rates are not available for distances
much over 200 miles; however, an approximation of these rates
shown by the broken line in Figure 3, indicates a sharp
increase as open waters are reached. Barge rates then
become less than flat-raft rates at about 250 miles.
Towing rates were on the increase until 1957. Since
then, log prices have stabilized and tow companies had to
institute new economies. In 1961, log towing rates were
actually lower than four years earlier. New ways were found to get more logs into a tow, and performance of tugboats was improved. Bundle booms helped to increase the volume of logs in a tow, and required less caution with regard to weather and tidal influences.
Truck and Rail Break-even Distance for Logs. The break-even point where rail becomes cheaper than truck, as shown in Figure 3, occurs at a relatively short distance
(15 miles) for logs, compared with other commodities.
Several factors account for this. Rail rates shown apply to logs that will be shipped to mills, manufactured, and the product reshipped again by the same carrier. Most log shipments made in British Columbia are on this basis. This gives the effect of a through rate from the point where the shipment originates, to the final destination of the outbound manufactured products. This privilege is designed to induce firms to ship their entire production by rail and increase the carriers* business; consequently, lower rates are offered in the initial log shipment. A second consideration is that some competition with trucking is still represented in the rail rates as shown here. However, at the time of writing, this factor has no bearing as railways no longer compete with truckers for logs hauled over short distances. This factor alone would cause the rail rate curve shown in
Figure 3, to shift up at shorter distances into a straight line relationship, and cause the break-even to occur at about 30 miles. A third consideration is that logs, when compared with other commodities in British Columbia, are hauled relatively short distances, both by truck and rail, forcing the break-even to occur at closer distances.
Finally, probably the most important consideration is the fact that almost 100 per cent of log transportation in British Columbia starts from the forest by truck.
Consequently, if any movement is done by rail, a transship• ment is required. This causes the actual break-even to occur at a greater distance. If we assume a transshipment cost of $1.00 per cunit, and an initial truck haul of 18 miles, before transshipping to rail, the cost of the entire movement, involving rail, is more expensive than a direct haul by truck alone, up to a distance of about 70 miles. If private roads were used for trucking, the break-even would be even further.
A similar analysis would yield the actual break-even point between truck and barge.
Morrison, upon considering numerous other factors in eastern Canada, felt the break-even distance between truck and rail could be as far as 250 miles.6 In the Lake States, break-even distances have ranged from 65 to 275 miles, when considering the following factors: cost of hauling from woods to railway stations, and rehandling onto cars; railway freight charges, switching, and possible involvement of two
6T. B. Morrison, The Role of Transportation in the Total Cost Concept, A Symposium, Canadian Pulp and Paper Association, March, 1964, p. 7. separate Tines; unloading costs at the mill, especially with unsuitable rail equipment; and less circuitous journeys over improved highways.^
Railway rates for logs and chips are among the lowest commodity rates. Agreed charges are no longer offered for logs by the railways. Only one or two cases of agreed charges still exist in the province. One large firm, regularly shipping a substantial volume of pulp logs, has obtained a rate measured on a carload basis, which is slightly lower than normal, but only on the condition that a large portion of the milled product at various locations will be reshipped byrail. Often it is not certain how much of the end product really is shipped by rail.
Rates for pulp logs, by rail, have been about five per cent lower than for sawlogs; however, the tendency now is to charge the same for both.
Truck, Rail and Mater Rates for Chips
Figure 4 presents a comparison of truck, rail, and water rates for chips. Truck and scow (barge) rates represented here, apply to firms shipping about 100,000 units* or more yearly, on a regular schedule.
?C. R. Silversides, Long Distance Hauling on Private and Public Roads, Pulp and Paper Magazine of Canada, February, 1963, p. ET-46.
*0ne unit equals 200 cubic feet of chips. CM
C £ N T S P I E R
100 LBS.
60 IZO 180 Z+0 300 360 ~ T-20 430 -TfO MIL.ES
FIGURE 4-- TRUCK, RAIL, AND SCOW TRANSPORT RATES FOR CHIPS 28
Trucks usually carry a pup-trailer attachment, and are licenced for 99,000 pounds, highway haul. Special highway regulations applying only to forest products on certain routes in British Columbia permit licencing up to
99,000 pounds, gross vehicle weight, on six-axled trucks.8
Almost all chip truck hauls are over public roads. Rates by truck would be 5 to 10 per cent higher for smaller volumes and irregular shipments. Contracts are usually made over a one to five-year period. If the shipper does not ship the volume, within a certain range specified in the contract, clauses are included to allow for variation in rates per hundredweight for deficient volumes.
Water rates are based upon scows having about 800 units carrying capacity. Turn-round time is usually about ten days. Some towing firms charge about $80 to $90 daily, including waiting time, for use of scows. This comes to about 10 cents per unit of carrying capacity, per day.
Railway rates represent a series of point-to-point rates for manufacture and reship'ment throughout the province.
The minimum volume shipment to qualify for these rates is usually about 120,000 pounds per car.
Break-even Distances for Chips. The break-even between truck and rail chip transport occurs at about 80 miles.
Province of British Columbia, Department of Commercial Transport Act and Regulations, 1966, p. 14. (Figure 4). This confirms the opinions held by truckers.
Truck service is fast and flexible. One truck can easily handle the chip production of several sawmills within the supply area of the pulpmill. However, on long hauls
(over 80 miles) railways handle most of the chip traffic.
The rail-truck break-even for chips occurs at a greater distance than for logs. This is a result of larger loads carried by chip vans, and the eliminated effect of rail competition in short hauls. Also, no transshipments occur with chips. Although railways do not compete directly with truckers for short hauls, they do encourage chip movement toward pulpmills in the interior, knowing that the product will be reshipped by rail rather than by water.
Lower rates may be offered on chip movements, with the anticipation of charging a higher rate on pulp movements out of the mill.
Scow movements again show a relatively low water rate compared with other commodities. This is to a large extent the result of lower cost docking facilities at scattered mills, and the use of a relatively simply built bulk carrying vessel with motive power applied externally by tugs which do not have to wait while the scow is being loaded.
According to Figure 4, it is cheaper to move chips by truck rather than scow, up to a distance of 15 miles. However,
9j. Charles, Sales Manager, Arrow Transfer Co. Ltd., Interview, Vancouver, March, 1968. .crowded city conditions as found in the Vancouver area, would force trucking rates up to a point where they would probably be higher than scow rates over all distances.
A study done by contacting 43 pulpmills located in the Northwest, the Great Lakes States, the Northeast, and the South, indicated a break-even between truck and northern railway chip shipments, at about 50 miles.10 Southern railway rates were lower, and resulted in a break-even below
50 miles. A chip pipeline of 2,000 tons daily capacity is cheaper than truck and rail at distances even less than 20 miles. However, a pipeline with 1,000 tons daily capacity does not become cheaper until about 50 miles. This is not a true comparison of total rates, because pipeline costs include capital investment and installation charges, whereas public truck and rail rates do not include entirely the carrying cost of capital invested in highways and railways.
Rates for truck and rail, mentioned in the above study, are considerably higher than present British Columbia rates.
Rates are often negotiable, and although rates in the
American study were representative, they could vary as much as 20 to 40 per cent.
Truck and Rail Rates for Lumber
At this point of our discussion, the complexity of
10W. A. Hunt, "Economic Analysis of Wood-Chip Pipeline," Forest Products Journal, September, 1967, p. 68. 31 the rate structures is such that an attempt to make general comparisons between the modes would require detailed supporting information. Lumber rates per thousand board feet are affected by species, moisture content, .manufacture and reshipment conditions, existence of backhaul, and load sizes.
Lumber is mentioned in this study only because it is an alternate form of shipping logs. Savings may be experienced by converting logs to lumber close to their origi n.
Various rail and truck rates applying to lumber are shown in Figure 5. Trucking rates are based on loads of about 16,000 board feet (approximately 40,000 pounds) of dressed lumber, moving from interior points to Vancouver.
Most general freight moves from Vancouver to the interior.
Returning trucks load lumber for the backhaul to the Port of
Vancouver; consequently, lumber shippers experience a lower rate from the interior to the coast. If no backhaul is involved, truck rates would be considerably higher, as shown in Figure 5. Commodity rates in British Columbia for lumber transported by truck, are lower on a weight basis than most other commodities. Lumber trucked for export often goes at a lower rate than for the domestic market because of more stable traffic. Large mills may acquire rate reductions on the basis of volume.
Railway rates are based on minimum weights of 120,000
pounds of lumber moving on CNR tracks from various points
to Prince Rupert and Prince George. Rates into Prince Rupert are much higher because reshipment will be by water rather
than by rail. Rates into Prince George, as shown in
Figure 5, are very low, on the condition that lumber will be finished or remanufactured and shipped by rail to points outside of British Columbia. The list of rates shown in
Table III serve as an example of rate reductions applicable
to reshipped lumber. Rates in Column (A) are charged for
lumber moving into Prince George that will be reshipped..
If it is not reshipped within 12 months, inbound charges must be revised to the full tariff rate, which is about 20
per cent higher than listed in Column (A). Upon reship• ment, the rates under Column (A) will be reduced to those
in Column (B), and the difference in charges refunded.
Truck and Rail Break-even Distances for Lumber. If we
consider trucking rates with no backhaul involved, and rail
rates with no reshipment obligations, the break-even
distance is about 200 miles, as shown in Figure 5. The
railways sometimes compete with truckers at distances
surrounding this break-even, in order to attract and hold
this traffic. Railways have been losing much lumber traffic
to truckers, and it is anticipated that future rates will be
predicated on a truck-rail break-even distance of 300 miles.^
ME. Miller, Freight Rate Department, Canadian National Railways, Interview, Vancouver, March, 1 968. 34
TABLE III
RAILWAY COMMODITY RATES FOR LUMBER TO PRINCE GEORGE
Cents per 100 lbs. Reshipment Upon Conditional Reshi pment From To (A) (B) Mi les
Avola Prince George 38 19 324
Burns Lake .. 22 11 150
Crescent Spur 20 9 1/2 112
Eddy 22 11 153
Houston 28 13 201
Isle Pierre 11 7 32
SOURCE: Canadian National Railway Tariffs, 1967.
c If truckers can take a backhaul of lumber, the break• even does not occur until about 515 miles (Figure 5).
However, if we compare the truck backhaul rate with the railway rates offered for lumber that will be reshipped, the break-even is as close as 35 miles. Railways can afford to give lower rates on lumber that will be reshipped, because the initial distances are short, compared to the outbound movement, which could be several thousand miles, to New York from Prince George, for example, at $1.41 per 1 p hundredweight. At the shipping end, two points as far as
100 miles apart, on the same line, could be charged the same rate when shipping over a distance of several thousand miles.
Occasionally, transshipment of lumber from truck to rail results in greater break-even distances. Mills are often encouraged to locate at railhead to avoid transship• ment of both logs and lumber.
Effect of Raw Materials Form on Transport Costs
When transporting wood, shippers are mainly interested only in the fibre content. Bark, moisture, sawdust, and other unusable substance adding to weight and volume, should be extracted at the earliest convenient point in the total haul. Portable sawmills, barkers, and chippers, reflect the
12"Bureau of Economics and Statistics," Freight Rates in Effect January 1, 1967, on Lumber and Forest Products from British Columbia Points to Canadian and American Markets, Victoria, B.C., p. 10. 36 desire of operators to remove waste from the end product at an. early stage.
A few examples of weight losses which can be expected 1 3 on converting logs to various forest products follow.
Table IV, gives an indication of the amount of slabwood, trim, and sawdust residue which can be expected on converting spruce and balsam logs in the Prince George area, to lumber.
Only about half of the wood portion of the log emerges as lumber. In addition to the residue losses, about 10 per cent of the initial log is bark, which is also discarded.
Continuing further, rough, green lumber loses weight upon drying. Green Engelmann spruce, kiln-dried to 8 per cent moisture content, loses 1,000 pounds of water on an initial weight of 3,080 pounds per thousand board feet.14 This is an important consideration, especially when shipping by truck or rail.15 Finally, rough lumber, upon being dressed, has an average of 30.5 per cent of its volume removed as shavings.16
In converting a log to chips, 10 per cent of the weight is removed as bark. A digester of 50 tons of chips, yields about 11 1/2 tons of bleached pulp, and about 18 tons of dissolved wood substance. The remaining 20 1/2 tons weight
13F. W. Guernsey, Some Conversion Factors for British Columbia Forest Products, op. cit., p. 9.
14Ibid., p. 4.
15Ibid., p. 11.
16Ibid. 37
TABLE IV
RESIDUE UPON CONVERSION OF SOUND WOOD PORTION OF SPRUCE AND BALSAM LOGS TO LUMBER - PRINCE GEORGE
Res i due Slabwood Green Log Diameter and Trim Sawdust Lumber
% % %
9" and under 32 20 48
10" to 14" 24 19 57
15" and over 19 18 63
SOURCE: F. W. Guernsey, Some Conversion Factors for British Columbia Forest Products, op. cit., p. 9. i s water.1'
With improved technology, and centralization of large milling complexes, it is becoming more desirable to deliver the entire log intact. Slabs edgings and trimmings are chipped and utilized in adjacent pulpmills. Even sawdust and shavings have an increasing value in the pulp and paper industry. Increased utilization of slabs and edgings by newly constructed interior pulpmills, has had considerable influence on the abandonment of portable sawmills.
Weight for Weight Comparison of Log, Chip and Lumber
Rates. All rates for logs, chips, and lumber transported by truck, rail, and water, were converted to a common weight measure for purposes of comparing shipping costs. A summary of all the rates on a per hundredweight basis is contained in Figure 6.
Various interesting relationships are contained in this figure. Focusing our attention, first of all, on the trucking rates, we find that logs are charged higher rates than chips. Several factors in our analysis account for this. The diverging nature of the two curves suggests a difference in load size. Chip vans having six axles, including those on the pup-trailer, can be licenced for
''J. P. Tessier, The Manufacture of Chips from Sawmill Was te (Tacoma, Washington: Weyerhaeuser Company, June, 1 967), p. 6. weights up to 99,000 pounds, on certain routes, at an extra cost of only $10 per month; logging trucks, on the other hand, usually only have five axles, thereby qualifying for licencing only up to 89,000 pounds, gross weight. Chip loads are about five tons larger than log loads. On private roads, chip and log loads would be about the same size.
Costs would also be similar. A second consideration is that chip vans operate mainly over good standard paved highways, since chip movement is from sawmills to pulpmills, while logging trucks operate over rougher, slow speed roads from the forest to mills. This results in higher speeds and less depreciation on chip moving equipment, compared with logging trucks. Logging trucks may require more powerful engines to tolerate steeper grades and winding roads.
Braking systems on logging trucks will require more attention.
Ease of efficient scheduling, facilities for rapid loading and unloading, and possibility of shift work, allow for greater utilization of chip moving equipment.
In comparing chip and log transport, we must remember that about 10 per cent of the log weight is bark, while chips are free of bark. Since the shipper is interested in sound wood fibre only, he is in effect paying for 100 pounds of logs, while only utilizing about 90 pounds. The rate per hundredweight of usable wood fibre then becomes 10 per cent higher for logs than what is shown in Figure 6. This same consideration applies to all modes, when contemplating
41 shipping wood in the form of logs or chips.
Wood products are characteristically bulky. In comparing logs and chips, it is found that one cubic foot of space is occupied by only 20 pounds of chips in most carriers, while logs weigh about 30 pounds per cubic foot of space if they are evenly piled and the ends of loads are flush. Mechanical compaction may help to increase chip carrying capacity.
Portable barking and chipping machines have been designed to remove bark in the forest, and to reduce wood to chip form, thereby facilitating more flexible handling and direct movement to pulpmills. This procedure is especially advantageous where small odd-sized, unmanageable pulp logs are concerned.
The rates for lumber transported by truck apply if a backhaul is involved; consequently, these rates cannot be directly compared with chip rates. Lumber has more value than chips, and loads are smaller.
Logs destined for lumber production can be expected to yield only 50 per cent of their weight in lumber. The remaining 50 per cent of the log may be waste if a portion is not utilized for chips. Consequently, rates per hundredweight of usable log, may be twice that shown in
Figure 6. This would be considerably higher than lumber rates, even without a backhaul. This may be an important consideration in deciding the proximity of the timber to mill location. Kiln-drying of lumber may add further to the savings. Next, in considering railway rates on logs, chips and
lumber, here again, log rates are higher than chip rates, but for a different reason. The railways are more certain that
the end product of chips will be shipped out by rail to
distant markets; therefore, incoming chips pay lower rates.
The railways have specially built chip cars for mechanical loading and unloading. High utilization of these
cars must be assured before additional cars are brought into
use.
Finally, in looking at water rates, chip rates per
hundredweight are lower than log rates by barge up to about
170 miles. This is due to higher capital costs tied up in more expensive and complex log barges and tugs. Chip barges also carry smaller loads. The largest log barge has a
capacity of about 10,000 tons, while large chip barges only
carry about 1,800 tons. Chips move much shorter distances
than do logs by barge.
It is interesting to compare capital costs per ton of
carrying capacity of equipment used in several modes. A
large log barge with tug capable of carrying 10,000 tons,
costs about $3,000,000, or about $300 per ton of capacity.
I Q
A chip scow, without tug, costs about $1 30,000, 10 or $81 per
ton of carrying capacity. A railway chip car capable of
18H. R. Cooper, Captain, Vancouver Tug Boat Co. Ltd., op. cit. 43 carrying about 30 tons, costs about $12,500, or $208 per ton carried.
Terminal charges are often reflected by loading time and the cost per ton of carrying capacity waiting. In relating the above mentioned costs, consideration should also be given to the cost of rail lines and switching diesels.
The full cost of a tug may not have to be considered in the waiting portion of a log haul, if it can be scheduled for other work during the barge-loading period.
In the following chapters considerations other than rates, will be discussed for each mode. CHAPTER III
TRUCK TRANSPORTATION OF RAW WOOD
Trucks are by far the most common and widely used mode of log transport in British Columbia. Almost 100 per cent of the timber produced in British Columbia is transported from the forest at least initially by truck, mainly over private haul roads, using truck fleets owned by companies and logging contractors. As most of the hauling is done by private firms over private roads, statistical and cost information is not readily available.
Even in eastern Canada where water has been the traditional means of log transport, trucking has been increasing rapidly in importance. Over 80 per cent of pulpwood produced in the east is moved by truck for some part of its distance. About 25 per cent of the production is moved directly to the mill by truck. Capital invest• ment in trucking equipment and roads is increasing along with the inevitable increase in distance between the secondary and final landing.
The first logging truck was tried in British Columbia in 1922. Since then the increased use of trucks has been dramatic, along with greatly improved equipment, roads, and road building techniques. A wide range of truck tractors and trailers is available, making it possible to select equipment most suitable for a particular job.
Variations in equipment types, road standards, timber and terrain conditions, and the use of private roads versus public roads, create different economic and technical considerations within the trucking mode. Each major variation will be discussed.
Before starting a point by point discussion of the trucking mode, a few major considerations in the analysis of each hauling situation are worthy of mention. In selecting a route and determining road capacity and travel time, the important considerations are: volume of timber, location of timber, road classification, allowable gross load, seasonal load reductions, and duration of haul. In selecting a vehicle, weight and dimension, maximum road grades, length of wood, fuel cost, insurance, labour, depreciation, and licence fees, are important consider• ations. Factors considered in terminal operations are cost of loading and unloading equipment, loading and unloading time, and servicing needs.
Effect of Seasonality and Topography
Seasonali ty. The increased use of trucks in eastern
Canada has released forest operations from the effects of seasonality as experienced by river driving operations.
In the American Lake States, from 1850 to 1900, the influence of seasonal log delivery brought about a cycle of scarcity and high lumber prices, followed by overproduction and 46 saturated markets.
All-weather roads are becoming more common. However, in many parts of British Columbia, transport during spring breakup, or often in the late fall, is not feasible for several weeks. Where swampy conditions prevail, as in northern interior forests, hauling during the winter months may be more economical, both from a roadbuilding and truck- hauling viewpoint. Cold temperature and snow conditions often result in smooth surfaces even on roads of minimum standard and poor drainage. Plans are designed so that logging operations occur on particular types of ground conditions during the most favorable season for manoeuver- ability of transportation equipment.
Ability to log all year around by land transport encourages employment of woods' crews on a permanent basis.
The interval between the initial investments in extraction operations, and the final delivery to the mill, is reduced by direct trucking; consequently, inventory charges are
1ower.
Topography. Much of British Columbia's timber is removed from steep and rugged slopes that could not be reached by logging railroads. Because of lower allowable grades on rail lines, more miles of track have to be built to reach the same elevations possible with truck in short distances. Maximum grades for logging railroads are usually about seven per cent, and the maximum adverse is only two per cent. With trucks, grades frequently exceed 15 per cent, and adverse grades of five or six per cent are common. Greater tolerance of steep grades and sharper curves on logging roads gives the location engineer more freedom to avoid swamps, bridge construction, and expensive rock work.
Even logging roads are often limited to the valley between two ridges. Sometimes it is cheaper to use existing water channels (rivers, lakes and ocean channels), where terrain is steep and road construction is costly.
It is possible to build a road almost anywhere, at a cost.
The supply of timber at the end of a proposed road should be of sufficient volume and quality to justify development.
Capital and Operating Costs
Capital Costs. The main capital investments associated with truck logging are roads, hauling equipment, and loading and unloading facilities. These capital costs can be almost entirely avoided if contract carriers are employed to haul timber over public roads. However, road development will still be required within timber stands.
Most companies develop their own private roads and haul over them with their own trucking fleets or else employ logging contractors.
Costs of building forest roads vary greatly according to topography, ground condition, required standard, and climate. The cost and type of equipment, in turn, may be influenced by road standards. 48
Road costs climb steeply where excessive rock work, bridge construction, and swampy terrain are encountered.
Costs of main logging roads in British Columbia vary from only $5,000 or $10,000 per mile in some dry, less rugged interior regions, up to $50,000 per mile in coastal regions. Side roads on some interior plateaus may cost as low as $2,000 a mile, depending on the amount of gravelling required. Where excessive rock work and bridges are necessary, certain stretches of road may cost well above
$50,000 per mile.
It is unwise to invest large amounts of capital in high standard roads unless the volume of timber to be carried over the road is sufficient to justify the cost. On the other hand, inadequate roads with steep grades, narrow widths, and poor drainage, may over a period of time, increase total operating costs to a point where extra capital would have been justified. Capital costs, operating costs, and volume of timber should all be considered together to calculate the optimum amount of investment. Other uses of the road should be considered as well.
Side roads generally service only small volumes of timber; consequently, investment is limited. Decisions as to the amount of investment put into a forest road are not as difficult as public transport investment decisions since the volume of traffic (timber) is quite predictable for the former, while the benefits and traffic volume in the latter are often only good guesses. Forest road investment is matched with the volume of timber developed to yield road building cost per cunit. Timber stands with large volumes per acre and gentle topography will have greatly reduced per cunit road costs.
Investments in logging roads should be coordinated with the logging plan so that excessive capital is not tied up for long periods before road use. Similarly, investment should be restricted to confined areas, where possible, to avoid excessive mileages of main road that requires maintenance, and to speed liquidation of developed timber over a short time period, relieving the investment and road.
Shorter main roads could be active for periods of only five to ten years. However, where one main road provides access to a vast tract of timber, which is managed on a sustained yield basis, the road may be maintained indefinitely to service a forest growing in perpetuity.
Investment in hauling equipment may also vary, depending upon road standards and load size. Maximum loads on public roads are much smaller than on private roads; therefore, lighter and less costly equipment is used on the former.
Large diesel trucks of about 450 horsepower required to haul heavy loads, and load combinations in truck-trailer trains may cost up to $80,000.^ Lighter highway equipment could be as low as $40,000.
Operating Costs. Log hauling costs can be divided into fixed and variable costs. However, we must consider that all costs become variable if the time period allowed is long enough. Some truck logging costs such as insurance, licences, and taxes, may be fixed for only one year. Road construction costs may be fixed over an indefinite time period, while certain road maintenance costs such as grading, may vary somewhat with the number of loads hauled.
Road damage resulting from water erosion is a fixed cost.
Truck logging costs commonly classified as fixed costs are: depreciation, interest, insurance, licences, taxes, supervision, certain camp and shop overhead costs, and road costs. Depreciation could just as easily be a variable cost, since it is often based on mileage hauled. If straight- line depreciation is used, logging equipment is usually assigned a five to eight-year life, depending on the maintenance care given. Tires wear out quickly in proportion to load weight and distance travelled; consequently, they are regarded as a variable cost.
Variable hauling costs generally include: drivers' wages and payroll assessments, fuel and lubricants, repairs,
20H, Cliff, Crown Zellerbach Canada Limited, Vancouver, B.C., Interview, February, 1 968. 51 and maintenance. Drivers' wages are fixed for a single load. This has important bearing on load size, to be mentioned later.
Table V gives an indication of the relative importance of various trucking costs.
Private Roads versus Public Road Systems
Although most timber hauls originate on private roads in many instances, portions of the haul are on public roads as trucks approach settled valleys and conversion plants.
If a private road is used for the entire length of haul, licencing and certain fuel taxes can be avoided, and most important of all, absence of legal restrictions permit much larger loads. Licencing up to 76,000 pounds, gross vehicle weight, costs $855 per annum.21 Savings on gas tax are about 13 cents per gallon on private roads.
The above considerations have encouraged companies to build their own main roads. In some cases, private roads even parallel public roads for a few miles.
Figure 7 shows two separate schedules of allowances
^'Province of British Columbia, Department of Commercial Transport, Schedule of Licence Fees for Commercial Motor Vehicles, 1968. 52
TABLE V
PERCENTAGE COMPARISON OF MAJOR TRUCKING COSTS
Per cent
Drivers' wages, including payroll taxes 34
Depreciation of equipment, including interest 29
Repairs, including parts 8
Tires 8
L i cences 8
Insurance 3
Fuel and grease 10 100
SOURCE: B. Hammock, Log Hauling - Past and Future, Loggers' Handbook, Vol. XXVI, 1966, Pacific Logging Congress, Portland, Oregon, 1966, p. 37. for stumpage appraisal, made by the British Columbia Forest
Service for hauling over private and public roads. Notice how the two lines separate in this figure because of the effect of smaller loads on public roads.
Reading off Figure 7, we see that for a 20-mile haul, it is cheaper by two dollars a cunit to haul over private roads. At $30,000 per mile, 20 miles of main road would cost $600,000 to construct. Therefore, a volume of 300,000 cunits of wood, the annual supply for a large pulpmill, must be hauled over the road in-order for savings by private haul to offset capital costs. Although 300,000 cunits may be an excessive volume to haul over one road in one year, it is not unreasonable to assume this volume over a ten-year period. The cost of capital will then enter the calculation.
It is often necessary to build only a two or three-mile stretch of road in a 20-mile haul, to avoid all public roads.
Although it is often desirable to operate entirely on a private road system, an operator may impose even more
severe restrictions on himself if road standards are low, restricting speed, and increasing equipment costs. Road maintenance costs are borne by the operator on private
roads. Large amounts of capital outlay for roads may be avoided by using public systems. Right-of-way may be
difficult to acquire for private roads in settled areas.
Since Toad size has considerable influence on
hauling costs, it is worthy of further discussion. Mention has already been made of special regulations for forest products on British Columbia highways, allowing for licencing up to 100,000 pounds on six-axled vehicles, following certain routes. Most logging trucks are licenced for up to 89,000 pounds, gross vehicle weight, the maximum allowed for five axles. A further dimensional restriction is imposed on logging trucks. Loads must not exceed eight feet in width, sixty feet in length, and twelve feet, six inches in height, off pavement. Allowing space for the tractor unit, and distance from the load to pavement, the dimensions of the net load reduce to about eight feet by eight feet, by forty feet, or 2,560 cubic feet. Stacked round logs have a density of 30 pounds per cubic foot; therefore, a load with the dimensions given, could have a net weight of 76,800 pounds, if it were built evenly. The truck and trailer unit required for such a load would weigh about 25,000 pounds.
On private roads, load widths could be up to 16 feet, and where truck-trains are used, the overall length could be over 130 feet, and gross vehicle weight about 225,000 pounds.
Table VI shows decreases in cost, with increasing sizes of hauling unit on long off-highway hauls. 56
TABLE VI
COST COMPARISON OF SEVERAL DIFFERENT LOAD SIZES FOR A SIXTY MILE OFF-HIGHWAY HAUL
Type of unit (1) (2) (3) (4) (5)
Load in cords 5.5 7.4 9.0 10.8 12.8
Gross weight (lbs.) 38,850 51 ,150 62,450 74,770 87,220
Gross horsepower 175 175 175 182 212
Loaded speed (m.p.h.) 25.7 25.0 22.2 22.9 22.9
Producti on (cords/unit/hour) 1.17 1 .41 1 .52 1.75 2.14
Hourly rate - hauling unit $6.18 $7.21 $6.95 $8.05 $8.84
Cost per cord $5.30 $5.10 $4.56 $4.57 $4.14
Cost per cord mile $0,088 $0,085 $0,076 $0,076 $0,069
SOURCE: C. R.- S i 1 v e r s i d ,e sLon g Di stance Hauling on Private and Public Roads, Pulp and Paper Magazine of Ca nada, February, 1963, p. WR-44. Load-weight indicators are often installed in some
hauling units to insure maximum payload without risking overload fines. Similarly, the physical capabilities of
the equipment should not be excessively higher than the
pay1oad.
Road Standards
Consideration has already been given to road standards
in relation to amount of capital investment and the use of
private and public roads. Since road standards can affect
hauling costs substantially, this topic deserves further
consideration. If timber volumes are sufficient and the
road is expected to be permanent, savings may be incurred by
even paving logging roads. The following estimates of
savings can be expected on paved, as compared to gravel
roads: decrease in road maintenance, 75 to 85 per cent;
decrease in tire cost, 60 to 70 per cent, and decrease in
other vehicle costs, such as fuel and maintenance, et cetera
30 per cent.22 Other savings arise from driver comfort,
reliability, increased speed, and larger load sizes.
For a comparison of hauling and construction costs of
various road standards, Table VII lists suggested speci•
fications for three different road classes, and Table VIII
22McFarlene, Seheult, and Stevens, Comparing Different Road Qualities, Pulp and Paper Magazi ne of Canada, — January, 1963, p. WR-15. 58
TABLE VII
SUGGESTED SPECIFICATIONS OF THREE ROAD CLASSES
CLASS OF ROAD ITEM A B C
Loaded travel speed 20 mph 10 mph 7 mph
Empty travel speed 3 5 " 18 " 11 "
Width, right of way 60 ft. 50 ft. 40 ft.
Width, ditch to di tch 26 " 22 " 18 "
Width, gravelled 12 " 10 " 8 "
Gravel depth 6 in. 4 in. 0-3 in.
Sight distance on curves 160 ft. 120 ft. 80 ft.
Maximum grade 10% 12% 15%
Culverts Treated Trea ted Wooden wooden wooden
Bridges Squared Squared Round treated treated timber timber timber
Estimated average construction cost per mile $5,000 $3,000 $1,500
SOURCE: W. E. McCraw, Truck Road Standards and Hauling Costs, Canada Department of Forestry, Forest Products Research Branch, Contribution No. P-32, August, 1963, p. 1. 59
TABLE VIII
TOTAL HAULING COST PER THOUSAND BOARD FEET FOR THREE DIFFERENT ROAD CLASSES
Loan Mai nten- Total Trucking repay- Interest ance hauling Year cost ment cost cost cost mfbm
CLASS A ROAD
1st $3.80 $5 .00 $1 .20 $0.40 $10.40
2nd 3.80 5 .00 0.90 0.60 10.30
3rd 3.80 5 .00 0.60 0.60 10.00
4th 3.80 5 .00 0.30 0.20 9.30
Average/- Mf bm $3.80 $5 .00 $0.75 $0.45 $10.00
CLASS B
1st $7.70 $3 .00 $0.72 $0.40 $11.82
2nd 7.70 3 .00 0.54 0.75 11 .99
3rd 7.70 3 .00 0.36 0.60 11 .66
4th 7.70 3 .00 0.18 0.20 11 .08
Average/- Mf bm $7.70 $3 .00 $0.45 $0.49 $11.64
CLASS C
1st $11.20 $1 .50 $0.36 $0.40 $13.46
2nd 11 .20 1 .50 0.27 0.80 13.77
3rd 11 .20 1 .50 0.18 0.80 13.68
4th 11 .20 1 .50 0.09 0.30 13.09
Average/- Mf bm $11 .20 $1 .50 $0.22 $0.57 $13.49
SOURCE: W. E. McCraw, Truck Road Standards and Hauling Costs, Canada Department of Forestry, Forest Products Research Branch, Contribution No. P-32, August, 1963, p. 2. 60 gives the total cost associated with each class. The following assumptions have been made regarding the data: capital for road construction is borrowed; estimated timber volume, 10 million board feet; length of road,
10 miles; truck owning and operating costs, eight dollars per hour; fuel cost, 40 cents per gallon; average truck load, 2,000 board feet; and the service period of the road is four years. Although the assumptions and data do not apply accurately to British Columbia logging conditions where loads are much bigger and road construction costs are much higher, the basic analysis is still the same.
Total hauling costs per thousand board feet are increasing as road standards decrease to Class C; however, if the volume of timber to be removed were reduced, the cost might decrease with decreasing road standards.
Should the reader wish to further study the effect of road standards on hauling costs, he is referred to the
Logging Road Handbook, published by the U.S. Department of
Agriculture.23 A complete and detailed study is made of the effect of many road designs on hauling costs.
Truck-Trailer Trains
A relatively new concept in log hauling is the use of two or three trailers, in tandem, hauled by a single truck.
Logging Road Handbook, The Effect of Road Design on Hauli ng Costs, U.S. Department of Agriculture, Agriculture Handbook No. 183, December, 1960, 65 pp. 61
Certain economies of load size are gained with this method, especially in labour savings and equipment investment.
Load sizes can be increased over three times on private roads. In Maine, one company, using truck-trains, carried loads 138 feet long, containing 60 cords, within a gross vehicle weight of 225,000 pounds. On Vancouver
Island, truck-trains carry loads of 35,000 board feet, compared with only 11,000 board feet, on single loads.
Large tractors of about 465 horsepower are used to pull these loads over main-haul roads. Although up to three trailers in tandem track well, road standards should be high, with few steep adverse grades and good alignment.
Lighter trucks are used to haul single pre-load trailers down steeper side roads to a central make-up station on the main road where the loaded trailer is left and an empty one taken back for loading. Close scheduling is required for smooth operation. At the make-up station, a man with a radio assists drivers to hook up several of the pre-load trailers, in tandem, for the main haul to the water or mill. This method is expected to have advantages over smaller single loads on long hauls.
Only a few log hauling costs rise exactly in proportion to load size; consequently, various economies are realized with larger loads. Driver costs are expected to remain almost the same for truck-trains as for single trailer trucks.
However, larger units cost more, consume more fuel, wear out 62
tires faster, travel at slower speeds, and incur greater
depreciation expense, thereby reducing savings to an amount which is less than proportional to increased load size.
Table IX shows a comparison of some costs for a
single trailer haul, and a truck-train haul, as revealed by a recent engineering study conducted in eastern Canada.
Single trailer units cost 40 cents per mile to operate,
but carry only 15 cunits, to give a per cunit cost of 2.7 cents per mile. On the other hand, truck-trains cost one dollar per mile to operate, but carry 45 cunits for a per cunit cots of 2.2 cents per mile. This represents a saving
of about 19 per cent by truck-train. If drivers' wages and
depreciation are considered as well, the above mentioned
savings may change.
Labour wages paid in the British Columbia forest
industry have been climbing rapidly in recent years. The
use of truck-trains may help to reduce total wage costs.
Economic Haul Distance
In the British Columbia interior, logs are often
hauled distances of up to 70 or 80 miles, while on the
coast, 20 or 30-mile hauls may be the maximum before water
or plants are reached. In eastern Canada, hauls of 100 miles
or more are not uncommon.
Topographic conditions and the quality and value of
standing timber may determine the length of haul. If timber
is poor and the terrain steep, most of the extraction 63
TABLE IX
COMPARISON BETWEEN SINGLE TRAILER HAUL AND TRUCK-TRAIN HAUL OF ESTIMATED TRUCK OPERATING COSTS PER MILE OF TRAVEL
Truck-train haul (45 cunits per Single trailer haul load--three (15 cunits per load) trailers)
Fuel $0.09 $0.28
Oil 0.01 -
Ti res 0.15 0.40
Repair materials 0.07 0.18
Repair labour 0.08 0.12
Total cost/mile .40 1 .00
SOURCE: I. McQueen, Consulting Forester, Forestal Forestry and Engineering Ltd., Vancouver, B.C., Interview, February, 1968. allowance may be used up in logging and road building;
consequently, little allowance is left for hauling, and the
distance will have to be short.
Economic haul distance to the various conversion
centres throughout the province can be calculated by using
logging costs and the selling price of logs. If the logging
costs and road building costs required to extract a large
body of timber, along with an allowance for profit and risk,
are subtracted from the selling price of logs at the nearest
conversion centre or selling market (e.g. Vancouver Log
Market), the difference will be the allowance for hauling.
Assuming this difference to be twelve dollars per cunit, and
reading off the trucking curve in Figure 3, we would find
the maximum haul distance to be 90 miles on public roads.
This distance would be somewhat greater on private roads.
With a twelve-dollar hauling allowance, the maximum haul
distance by rail becomes about 270 miles, and by barge,
over 1,000 miles. (See Figure 3). These latter two
distances would be reduced when considering the cost of
transshipping from trucks.
Haul distances by truck are increasing, in order to
gain advantages of central milling.
Truck Flexibility
One of the main advantages of trucking over other
modes of transport in the forest industry is its flexibility.
This is probably one of the greatest factors influencing 65 the dominance and widespread use of this mode.
Use of trucks and roads allow greater flexibility in the source of timber supply. Roads can be built relatively quickly to small timber patches and to stands of various species and timber quality, as the season and demand at mills change. Logging plans can have more flexibility when trucks are used, rather than rigid rail and water transport modes. Flexibility of road systems has encouraged cutting only those stands which are at a mature economic value, and leaving other stands to improve the general condition of the forest.
Relatively low initial investment in logging roads, especially where public roads are available, compared to rail lines, results in less economic pressure to cut entire areas at once to liquidate invested capital. Capital investment in different road standards and equipment can be varied according to volume of timber to be moved, daily mill requirements, topography, and distance of haul.
Variations and economies in loading and unloading are possible along with the trucking mode.
Forest roads serve many other purposes besides log transport. Roads are necessary for the transport of logging crews, forestry crews, and supervisory personnel.
Where a river system of transport is used, roads are still
often required for river access. A good road system is a
prerequisite for sound forest management. Fire, insect, and disease control are more effective with a widespread road system. Forest roads are often used by recreation seekers and mining firms. CHAPTER IV
RAIL TRANSPORTATION OF RAW WOOD
In discussing trucking, the favorable characteristics mentioned were often reflections of weaknesses in rail transportation. To avoid repetition, this chapter will be brief.
Movement of raw wood by private and public rail in
British Columbia is very minor compared to truck and water movements. Only two separate private logging railroad main lines with a combined trackage of 100 miles are operating in British Columbia.
Public railways are used for log and chip transport where logging operations are close to rail lines and distances to mills are relatively long. In 1964, from
January 1, to June 30, out of total loadings on British
Columbia rail lines, of 6,987,040 tons of all commodities,
3,658,240 tons were products of forests.1
Pulpwood in the southern and Lake States, and throughout eastern Canada, is produced over such wide areas that it would be impossible for each mill to run its own
Nummary of Economic Activity in British Columbia. 1964, Department of Industrial Development, Trade and Commerce, Government of the Province of British Columbia, Parliament Buildings, Victoria, B.C., p. 45. 68 railroad, or have all its wood delivered by truck or barge except in the case of smaller units. Railroads are needed to supply large centrally located mills with sufficient wood. British Columbia mills drawing wood supplies from the interior rely on rail deliveries for longer hauls.
Private logging rail lines are still used in some areas of the American Southern Pine Region where long hauls and high volume concentrations exist and daily deliveries are large.
The two private logging railways in British Columbia are fed by trucking fleets from a sustained source of raw wood. The two lines exist today only because of the heavy initial capital investment. Had development occurred more recently, truck roads would have been used in place of railway lines.
Capital and Operating Costs
Operators using public rail systems avoid large capital investments in equipment and rail lines. However, investment may be required in trucks for delivery to railhead, and in reload facilities. The operators' equipment may be used when private rail lines join public lines.
Although additional investment in private logging railways is not likely to occur in British Columbia, some comparisons with truck investment may be worthwhile.
The cost per mile of constructing railroad grades is approximately the same or even lower than truck roads because of narrower widths; however, due to lower grade tolerances, more miles of rail may have to be built and more 69 bridges and earth fills may be required to reach the final destination. After grading is complete and ballast laid, railways incur costs of steel and ties, which are not required for truck roads.
Logging railroads built in the past acquired used steel for their lines. Second-hand steel of a gauge sufficient for logging rai1 roads .costs about $10,000 per mile, and railroad ties cost $3,500 per mile.2 Logging railroads will therefore incur an extra cost of at least $13,500 per mile, which is not incurred by truck roads.
Some economies can be gained in equipment investment in railroads as compared with trucks, because of advantages gained by operating only one large power unit for many cars, while each truck must be powered separately. Taking the example of one large company operating on Vancouver Island, a large diesel unit valued at about $150,000, pulls 35 rail cars valued at about $5,000 each, for a total investment of
$325,000. The same haul would require about ten trucks with a total value of $500,000.3 Savings in operators' wages would be experienced by train, in addition to the above capi tal .
Operating costs commonly associated with logging
2w. F. Tutschek, Canadian National Railways, Interview, Vancouver, B.C., March, 1968.
3K. Thomas, Canadian Forest Products Limited, Interview, Vancouver, B.C., February, 1968. railways include: fuel, maintenance and repairs to equip• ment and tracks, wages of train crews, supplies, supervision, car distribution, and depreciation. Delivery costs per cunit are estimated to be about the same by both private and public railroads.
Although certain economies are gained by volume hauls on logging railways, trucks and roads are favored because of their flexibility.
Log Handling
In transporting raw wood by public railways, handling and scheduling may create certain inconveniences, especially where small irregular shipments are involved. Specially designed cars to facilitate ease of loading and unloading of chips and logs are now becoming common. However, the railways must be assured of high utilization of specialty equipment before service is expanded. Higher tariffs may result if new cars are not fully utilized.
Practically all logs hauled by railways are trans• shipped from trucks at various reload stations. Reload equipment and adequate storage space must be available at these points. If large volumes pass through one station, heavy investments in loading facilities may be justified.
The more concentration of wood, the more specialized the loading operation can be. If truck loads are built properly, the whole load can be transferred at once by using heavy equipment. However, this may require reduced load sizes on trucks. 71
Continued cooperation is necessary between the forest industry arid the railways in the introduction of new equipment, and standardization of loading and unloading methods. Improved scheduling would insure more uniform deliveries, and reduce inventory requirements. If mills ship an even volume of timber all year around, total investment in rolling stock can be reduced. Companies should try to ship a maximum volume of timber from a minimum number of points to avoid handling of small lots.
Chip Handling
Shipping chips by rail over longer distances is gaining interest in eastern Canada. In recent years, about
35 per cent of the total rail wood movement in the east was chips. Many chips are a by-product of industry, conducive to movement to pulpmills by rail where distances are too far for trucks.
Chips are low density and require a certain amount of compaction to load to maximum capacity. Loading devices for compacting chips are still not common. Most mills load by an overhead oscillating blower spout, or by overhead hoppers.
Unloading is usually done by elevating one end of the car, by car turnover, by vacuum, or by drop-bottom doors. The conversion of roundwood into chips before shipping may depend on rail handling facilities available, and railway policy. A smooth flow of wood from production areas to plants must be planned if the railways are to maintain their share of wood movement.
Weaknesses of Logging Railroads
Although a logging railway may be the cheapest mode of line-haul transport on long hauls in large valleys producing a high annual volume of timber, the inflexibility associated with this method has caused the trucking mode to be favored.
Initial high investments in rail lines deters move• ment to different stands and small timber patches, on short notice. Transportation of crews* supplies and supervisory personnel is far more convenient with roads. Loading and handling at mills may be inconvenienced by the lack of maneuverability of rail cars.
Although some mills receive logs by rail up to distances of 300 miles, this is likely to be the maximum economic distance. Where logs must be moved longer distances, water transport must be available to make the operation econom ical. CHAPTER V
WATER TRANSPORTATION OF RAW WOOD
Waterways have traditionally been the major avenues of wood transport. Ever since recorded history, man has used water
to transport wood.
In British Columbia, most rivers are not suited to driving wood; however, the natural coastline is probably the best in the world for purposes of log transport by barge and flat raft from
logging sites to conversion centres. Deep inlets penetrate coastal timber stands, and serve as ocean highways, along with many sheltered passages running parallel to the coast. The
British Columbia Forest Industry, from the start, has relied greatly upon coastal waterways for transportation.
In eastern Canada, over 50 per cent of the annual wood production is delivered to mills by rivers and lakes. Water transport is more economical per mile than any form of land transport.
There are several systems of water transport in British
Columbia. Flat rafts and booms are used on the ocean and lakes.
Barges are used over long distances on the coast. River driving
is unique, in that flowing water provides the motive power. The water transportation phase often includes maintenance and operation of storage and sorting grounds.
Some 300 tug boats of all sizes operated on the British
Columbia coast in 1960. In addition, transportation firms own several hundred scows and barges. Large forest companies have formed subsidiary towing companies for log and chip transport by water.
Self-loading, Self-dumping Log Barges
The recent innovation of large log-carrying barges that could both load and unload with their own equipment, has stimulated long distance open water log transport on the British
Columbia coast. The largest self-loading, self-dumping barge built for $1,750,000 was launched on the British Columbia coast in 1965. It is 364 feet long, and has an 80-foot beam. Fully loaded, it carries in excess of 2.75 million board feet of logs at a towing speed of 8 knots. Its loading equipment consists of two 40-ton capacity cranes. A full cargo of logs can be loaded in 18 hours, and dumped in 30 minutes or less, by flooding one side of the barge. Nowhere else in shipping is 10,500 tons of cargo unloaded so quickly and cheaply. Since dumping can occur in open bays, on front of mills, no port facilities are requi red.
By 1965, there were about 20 self-dumping barges in operation on the British Columbia Coast. Since then, there have been no additions. Barges move about 30 per cent of the total annual production on the coast. The present fleet of barges is considered adequate to meet present coastal log transportation demands. The high capital costs involved in barge transport have drawn the major integrated forest firms into the log-towing business. Because of speed of tow, reduced log loss, and reduced toredo damage, the barge has replaced the Davis raft on long, high volume tows from the Queen Charlotte Islands. A round trip by tug and barge from the Queen Charlotte Islands to Vancouver, takes only six days. Rafts were often several months in reaching destination. Barges can be used all year around, whereas Davis rafts could only be used about half the year because of weather difficulties. Log losses from flat rafts on the British Columbia coast are estimated to be about $3,000,000 annually. Barges help to reduce this loss. Savings in toredo damage alone often pay for the cost of a barge.
Capital Costs. Capital investment in a self-loading, self-dumping barge, and in the tug required to tow it, could be as much as $3,000,000. Consequently, only larger towing companies and integrated forest products' firms have invested in this equipment. Continuous utilization of equipment must be assured. This is more easily accomplished by large firms.
Cranes mounted on barges have increased their capital cost, but have made loading out of small camps possible. Extra capital tied up in barges discourages their use over short distances in protected waters where flat rafts can be used advantageously. Specialized equipment does not permit a backhaul of other products.
Log Handling Required. Technical developments in the log barge have nearly reached their maximum level; however, there is still a need for improvements in shore handling facilities to insure a smooth flow of logs, and greater barge utilization.
The handling of wood on water is complicated by the large number of log sorts on the coast. Nineteen-way sorts are not 76 uncommon. Sometimes 32 sorts by grade, species, and end use, are made in the water, and logs stored before mill use.
Most mills lack adequate receiving facilities for large barge loads. Mills located along the banks of the Fraser River cannot handle incoming barge shipments. Apart from lack of facilities on the river, the river is too confined and fast flowing to allow large barges to dump into mill ponds. Dumping at pulp and paper mills with deep-sea facilities does not present a great problem. Where mill ponds are too confined for dumping, or where the wash created by dumping may cause damage, more open areas, away from the mill, may have to be used, and the 'Togs towed to the mill in booms. Medium-sized barges may be preferred to large barges by some operators, because of mill space restric• tions.
One answer to the handling and sorting problem has been to centralize sorting and booming grounds. An example of this is found at Jervis Inlet, near Vancouver, where barges dump their logs en route to mills from the Queen Charlotte Islands. Logs are sorted, boomed, and directed out to the appropriate mill. j
Flat Rafts
Although the self-loading, self-dumping log barge repre• sents the latest and best method of long distance log transport, it has not eliminated the use of the time-testeed flat raft.
Booms containing bundles of whole truckloads, and flat rafts are used to convey parcels containing up to 3,500,000 board feet of logs through sheltered waters. Tows can range in size from 20 to 60 sections. A tow of 60 sections is about 200 feet wide,
1,400 feet long, and covers an area of six acres.
It becomes evident that much friction exists when towing such a structure; consequently, towing speeds are reduced to one or two knots. Long "lay-overs" awaiting calm weather adds to the delivery time by flat raft. Toredo damage may occur if logs remain in the water over extended periods. Logs are susceptible to loss in rough water.
However, the advantages of flat rafts far outweigh their disadvantages. Rafting of logs on inland waterways is the cheapest form of log transportation in the Pacific Northwest.
The cheapness of rafting gives the logging operator the advantage of marketing his logs where he gets the most for them.
Rafts can be built very economically, at any logging camp, into almost any size required to move a given volume of logs. Small rafts can be built as soon as enough logs are amassed. No capital cost, and-only minor labour cost is invested in assembling the raft. Tug boats can be hired when rafts are ready to be moved. Once rafts are delivered to mills, the logs can easily be extracted.
Major Coastal Log Flows
Major log flows by barge originate on the Queen Charlotte
Islands and the northern coast, and terminate on the southern coast, mainly in the Vancouver and New Westminster areas. Large volumes are received at Powell River, as well. Barges cross exposed waters between the Queen Charlotte Islands and the mainland by the shortest possible route and follow protected channels south along the mainland. Tows of about 550 miles from the Queen Charlotte Islands cost about $6 per cunit. When comparing this with truck and rail movements, it becomes evident that tow distances much greater than 600 miles would still be economic by barge. 78 Barges are used extensively on the west coast of Vancouver
Island, as well. Logs may be carried along the exposed coast• line to plants nearby, or they may even be transported around the
Island to Vancouver. Barge loads are usually dumped in Howe
Sound before delivery to mills by flat boom.
About three billion board feet of logs are transported annually on the British Columbia coast. Two billion feet move by flat raft over three major routes, one southbound, one north• bound, and one on the Fraser River. Port Hardy, on northern
Vancouver Island, and Vancouver, are the terminals of main south• bound log flows in sheltered waters. The flow volume is slight in the north, and increases southward to Vancouver. Lumber and peeler-grade logs are usually delivered to Gambier Island, near
Vancouver, where large tows are broken into booms for transfer to
Vancouver mills. Many rafts go directly to sawmills.
Northbound log flows start near Port Renfrew on Vancouver
Island and increase in volume to Victoria, where some logs leave the flow. The flow then increases northward along the coast to
Nanaimo, and then to Vancouver.
A significant volume of logs comes down the Fraser River, particularly from Harrison Lake and Pitt Lake. These logs are boomed and towed by high-powered tugs designed especially for fast river water. Logs are stored in fresh water at Pitt Lake.
Other storage areas are at Howe Sound and on the north arm of the
Fraser River. Logs are often bought and sold at these locations.
Two factors affect the routine movement of logs: the first is the occurrence of rough water and the second is the presence of rapids or tidal currents. Three areas are particu• larly susceptible to rough water. These are Georgia Strait from Campbell River to the American border, central Johnstone Strait, and Queen Charlotte Strait. Towing rates in these areas increase much faster than would be the case if just distance alone were considered. Some narrows have currents ranging from four to six knots. Routes are determined by practical experience. Even though a route taken is often not the shortest, time savings may be greater. Tows stay close to sheltered waters and cross straits in the shortest distance.
Routes are sometimes affected by species and grades common to certain areas, and by the annual requirements of individual specialized mills.
Chip Scows
The existence of many sawmills and pulpmills on west coast waterways has created a unique opportunity for cheap trans• portation and utilization of wood waste. Chipping of sawmill wastes for utilization at pulpmills has brought about an increasing demand for chip scows. New techniques in pulp production now enable utilization of sawdust.
Some 300 pulpwood chip and hog fuel scows are in use in
British Columbia.! About 70 per cent of British Columbia chip production is moved by scows. Scows range in carrying capacity from 350 to 1,500 units. The most common size is about 700 units.
Scow lengths are up to 170 feet. Further increases in size would be dependent upon improvement of present docking facilities at mills. Larger scows are difficult to maneuver in the north
'W. G. Hardwick, Geography of The Forest Industry of Coastal British Columbia, Occasional Papers in Geography, Number 5, Department of Geography, The University of British Columbia, Tantalus Research Limited, 1963, p. 44. arm of the Fraser River. Where deep-sea berthing facilities are available, larger scows are used.
Chip scows serve the duel role as a means of transportation and of storage. They are often tied up at mills for several days or more while chips being produced are loaded. Chips are normally loaded by conveyors or funnels, and unloaded by cranes with a bucket attachment. About 1,000 units can be unloaded in
24 hours. There is a good possibility that chip barges will become more complex. Possible innovations in the future include built-in automatic conveyors for unloading.
Average tow distances by scow are less than 100 miles.
The longest tows are about 300 miles. About 15 per cent of
British Columbia coastal chip production is shipped to pulpmills in Washington.
River Driving
Rivers originate on timbered slopes in British Columbia and discharge on the coast where sawmills and pulpmills are ideally located. Flowing water can provide the motive power for buoyant wood, thereby greatly reducing capital and operating costs associated with other transportation systems. Strangely, what seems to be the best system is used the least in British
Columbia, largely because of unsuitable river channels. In eastern Canada, rivers still play an important role in log deliveries even after volume reductions as a result of increased use of trucks and boats. Table X shows the percentage of pulp- wood deliveries by river and other modes in eastern Canada.
The trend away from river driving in favor of truck and boat transport has continued since 1962. 81
TABLE X
PULPWOOD DELIVERIES IN EASTERN CANADA BY MODE FOR THE PERIODS 1951-52 AND 1961-62
1951-52 1961-62 per cent per cent
Water
River drive 57 50 Boat _5 1_3 Sub-total 63 63
Land
Rail 27 15 Truck 10 22
Sub-total 37 37
Total 100 100
SOURCE: R. A. Lachane, The Secondary Transport Function and Its Major Problems, Pulp and Paper Magazine of Canada, July, 1967, p. WR-318. 82
River driving of wood may be far from obsolete in remote areas where topographic conditions may involve expensive road building, and haul distances to mills may be beyond economic limits. If a suitable river channel exists, this may be the only economic mode.
Many British Columbia rivers are not suitable for log driving, due to the presence of falls, shallow rapids, sharp curves, wide gravel bars, side channels, dams, and other obstructions. In certain rivers, fish migration and spawning may be disturbed. Streams should be wide enough for the longest logs, and an ample reliable supply of water should be available.
Large storage areas, either on lakes or coastal bays, should be available for seasonal inventories.
Investment in River Improvements. Although capital and operating costs may be low on rivers with suitable channels and an abundant supply of water, certain rivers may require a large capital investment in channel improvements, and constant patrol, before driving is successful. The simple rule to follow here, as in road construction, is to invest capital in river improve• ments where timber volume and reduction in operating costs per cunit will be sufficient to offset extra capital invested.
Large river watersheds drain vast tracts of timber in
British Columbia. A sustained perpetual flow of 100,000 cunits of logs annually in a large watershed, is not above reasonable expectations. Assuming a $1,000,000 investment in river improvements, expected to last 10 years, this would come to a cost of only one dollar per cunit on the above mentioned volume, without allowing for interest charges. This cost is low 83 compared to main road construction costs; and savings in operating costs when compared with trucking could be large considering that no motive power is required by river drive.
Savings in fuel, maintenance, depreciation and wages involved with trucking may be partially offset by sweeping expenses and wages of driving crews.
Savings in operating costs by river drive in some cases could even pay for the construction of river access roads to facilitate transportation of equipment, crews, and supervisory personnel.
If as much were spent on river improvements as on road construction, somefairly reliable river channels for log trans• port could be constructed in British Columbia. However, the risk, seasonality, inventory charges, and other unpredictable items distract from the above favorable analysis of river driving, especially where channels are not entirely suitable.
Risk and Seasonality. Since river drives are largely dependent on weather, seasonal water fluctuations and other largely uncontrollable occurrences, a certain amount of risk and inconvenience in log deliveries is experienced. In the Lake
States, during the period 1850 to 1900, when log supplies of many sawmills were almost entirely dependent on river drives, a low water season often disrupted whole communities which thrived on the lumber industry. Capital invested in logs on river banks could not be liquidated until lumber was cut. A cycle of scarcity and high lumber prices followed by over• production and saturated markets was repeated time and time again when log drives failed in dry seasons. 84 In earlier periods, rivers were the only method of long• distance transport; consequently, a greater risk could be taken.
Since then, trucks have replaced many river drives to insure a continuous supply of logs.
Seasonality associated with river drives may result in
inventory and storage costs which are higher than operating costs. Historically, the production-consumption cycle in eastern
Canada averages 18 months. The total inventory period may be 25 months. Companies operating in northwest British Columbia can expect inventory periods up to 21 months long if they depend entirely upon river delivery; however, most companies have several different sources of supply and can schedule cutbacks from other sources in order to use up wood accumulating at river estuaries.
Timber cut starting in September is gradually accumulated on river banks over a nine-month period until peak inventories are reached in May. All the logs are fed into rivers over a four- month period until the following September. If mills are not scheduled to handle this influx of wood, mill inventories of river driven logs may last for 12 months until driving starts again the following May. The total river and mill inventory period then is 21 months, and the average period is about 10 months.
This period could be longer if logs hang up on gravel bars until the following spring. Assuming 10 per cent interest charges annually, and a production value of $20 per cunit for logs delivered to river banks, inventory charges associated with river driving then are about $1.67 per cunit, or almost the same as river-drive operating costs.
In addition to the above costs, insurance and storage areas
have to be expanded. Log losses of one or two per cent require additional allowances of $.25 to $.50 per cunit. Wood may be damaged or excessively sun-bleached if exposed for long periods.
In British Columbia, logs are often river driven for
100 miles or more. In eastern Canada, some river drives are up to 150 miles 1ong.
Rivers and ocean waterways have played important roles in deciding mill locations. Discussion of mill location relative to major transportation systems follows in
Chapter VI. CHAPTER VI
MILL LOCATION AND SPACING IN RELATION TO THE
TIMBER RESOURCE AND TRANSPORTATION MODES
Transfer rates in the forest industry represent important variable costs that can be modified by plant location. The tendency is to locate where total transfer costs, the sum of the wood procurement and product distribution costs, are the least.
Because of the bulkiness of wood, and large weight losses during processing, conversion plants tend to be raw-material oriented rather than market oriented. Mill orientation to raw-material has been modified somewhat on coastal British Columbia, where ease of water transportation has enabled mills to locate in centralized areas, away from timber resources, but near other industries, labour, mill supp1ieshydro power, and fresh water supplies.
Mills may be concentrated in areas which have good production facilities, or they may be separated, as in the case of a pulp- mill, where new timber must be tapped, and fresh water is required.
Many factors have influenced log conversion plant location in British Columbia in recent years. The changing accessi• bility of timber resources has led to a pattern of convergence of log flows on the coast. The largest portion of coastal log produc tion is converted in the Georgia Strait area. Logs of high value
(peeler and lumber-grade logs), travel further to central locations, while pulp-grade logs are marketed at sites closer to the source. Integration of large companies tends to favor conversion at centrally located plants on the coast. Other factors influencing location include: technological innovations, such as the self-loading, self-dumping barge; government policy; energy and water supplies; land costs in major cities; and proximity to markets.
The relationship between conversion sites, the density and quality of the resource at extractive sites, and transportation media offers a framework on which to speculate future mill locations.
Influence of Resource Density and Quality on Transportation
Mills tend to increase in number in areas close to vast
timber stands with high volumes of wood per acre, within easy access to mi 11ing sites. Areas with large volumes of timber within an economic radius can support more mills and larger mills
than can sparsely forested areas where a greater transportation
radius would have to be encompassed to gather the same volume of
timber.
On the British Columbia coast, ease of water transport has
permitted many large mills to cluster on the southern coast and draw log supplies from virtually every distant coastal forest.
In the interior, where transportation of logs is more expensive, mills are smaller and located closer to the resource. In the
period 1 944. to 1 955, the average number of men employed per mill
in the interior was about 10, while 60 men were employed per mill
on the coast.^
The quality of timber also has some bearing on transportati
A. Guthrie and G. R. Armstrong, Western Forest Industry (Baltimore: The John Hopkins Press, 1961), p. 88. and mill location. The transfer cost that a product can econom•
ically bear, tends to vary directly with the specific value of
the product. Products with high value per unit of weight can
bear higher shipping costs. This ability to bear higher costs is
explained by the greater amount of utility yielded by the high
cost product. For example, let us consider two veneer logs;
one of high grade, and the other of low grade, but both the same
weight. The high grade log, upon reaching destination, may yield
twice as much clear veneer as the low grade log; consequently,
it can bear greater transportation costs.
In some cases, it is economical to ship veneer logs from
the interior to the coast by rail, but sawlogs, because of their
lower value, cannot be moved over the same routes. The processing
of lower grade logs tends to be concentrated nearer to principal
extraction areas than that of higher grades, and this tendency
strengthens when transfer rates rise.
Influence of Increased Wood Utilization on Transportation
and Mill Location
In recent years, efforts by both industry and the govern• ment have succeeded in increasing the utilization of wood
previously left on the forest floor, or discarded as sawmill waste.
This has the same effect as increasing the volume of timber available in a fixed area. The same roads which are built to
extract only what was considered commercial wood, can be used for moving small wood, previously considered waste, at no extra fixed
cost.
Before 1945, over half of each log cut in sawmills in
coastal British Columbia had been waste. Through changes in
product demand, pulpwood chips and hog fuel became merchantable, bringing log utilization up to 80 or 90 per cent. This has stimulated the central location of sawmills and pulpmills, with wastes from the former being utilized in the latter. A complex movement of wood chips occurs between many mills in the Georgia
Strait region.
Since most sulphate pulpmills use both pulp-grade logs and waste-wood chips, the most advantageous sites are within economical transportation distance of both the sawmills and logging areas.
Fluctuations in the ratio of logs to pulpwood chips used in pulp• mills are closely related to changes in price and transportation costs of moving chips and logs.
Influence of Transportation on Land Use and Mill Location
Transportation costs hold the key to the wider implementa• tion of intensive forestry practices in British Columbia, because when these costs reach a sufficiently high level as transportation distances increase, intensive management of forest land near the mill will be justified. Areas closer to the mill are subject to less transfer cost. Therefore, the value of the timber in the close area is higher since it is subject to lower transfer cost deduction.
Location is a prime factor in determining the quality and the use of land. A piece of forest land near conversion plants is high quality in a locational sense, in that it enjoys low transportation costs for other agents of production, and for harvested timber. The rent returns to land vary inversely with its distance from product consumption sites.
Since rent yields on forest land are low, only those areas relatively far from industrialized centers are used for forestry 90 purposes, thereby increasing transportation costs. Land closer to the center of activity is reserved for commercial, industrial, and agricultural production. However, the land rent gradient is not uniform. Pockets of land near the center of activity may not be suited for uses other than timber production.
Influence of Geography on Transportation and Mill Location
Much has already been said about the advantages afforded the British Columbia Forest Industry by the existence of sheltered coastal waterways where ease and flexibility of handling chips and logs provide for favorable mill location. Consequently, there is still another advantage of coastal location. Raw wood moving by truck or rail to the coast can avoid an extra trans• shipment point if processed on the coast before changing to a water medium of transport. Once material is unloaded for transshipment, it is often best to process it before reloading, thereby avoiding extra handling. If unloading and reloading costs are sufficiently great, the transshipment point becomes the least-cost location for manufacturing. For this reason, pulp- mills and sawmills are located at barge and sea ports, rail heads, or points of junction with truck roads from the woods.
British Columbia is endowed with extensive coniferous forests, remarkably accessible to central conversion plants through a great coastal waterway. The locational structure of the forest industry, and the complex linkages, are based on this fortunate combination. CHAPTER VII
SUMMARY AND CONCLUSIONS
The analysis and description of each of the major
British Columbia forest transportation modes presented in
this thesis should serve as a guide in developing timber
transportation systems.
In comparing truck, rail, and water systems, water
is considered to be the most economical and convenient mode for raw wood transport in British Columbia. Whenever
suitable channels are available, this mode is selected for
both short and long hauls.
Almost all secondary timber transportation is done by
trucks for at least part of the haul. If transshipment
from truck to water, or rail transportation systems is to
occur, extra handling costs, capital investment, and timber
volume should be considered in a total cost calculation,
before deciding upon the final wood handling system.
The importance of transportation costs in acquiring
raw timber is not to be underestimated. Most of the value
of logs at mill locations is vested in transportation.
Trucking rates for logs on public roads throughout
British Columbia were analysed for various distances, using
data gathered from the Public Utilities Commission. Railway
transfer rates from published tariffs and barge transfer 92 rates from large towing companies were also analysed. A comparison of the above rates, representing an average throughout the province, indicates an economic line-haul distance for logs of about 90 miles by truck, 270 miles by rail, and 1,000 miles by barge when $12 hauling allowance remains after gathering logs at transportation terminals.
Observation of actual maximum haul distances by each mode throughout the province, indicates that the above economic limits are rarely exceeded. Greater economic haul distances by barge enables single mills to tap a vast coastal supply of timber.
Line-haul transfer rates by rail become cheaper than trucking rates after 15 miles; however, since almost all timber hauls originate by truck, the break-even distance between truck and rail becomes about 70 miles because of extra handling costs.
The form in which wood is shipped, has a significant effect upon transfer rates. Weight losses in moisture, bark, and sawdust, provide incentives for processing logs close to extraction points. Automation in handling of chips may encourage conversion of wood into this form before shi ppi ng.
The flexibility in trucking has promoted the widespread use of this mode for log transportation. Flexibility of
equipment and haul roads allows for variation in capital
investment, according to timber volume and grade requirements of plants. If large volumes of timber are moved annually, a private road system may be preferred over a public system, which imposes regulations on large vehicles.
Logging railways do not have the flexibility of.trucks and require larger initial investments for construction of roadways; consequently, this mode has decreased in importance, even though some economies may be experienced in long hauls of large timber volumes. The few logging railways in British Columbia are still operational only because of the high initial investment. Public railway lines passing by mills, can deliver large volumes over longer distances at lower rates than by truck.
Water transportation of wood has always been the most economical method, owing to low capital investment in access routes and carrying equipment. However, this mode is dependent on the existence of navigable waterways. Rivers may not be suitable for transportation because of various obstructions perilous to log-driving operations.
The location of conversion plants relative to timber resources, is an important consideration in balancing
incoming and outgoing transfer costs. Sawmills and pulpmills are generally resource oriented rather than market oriented, due to the large weight reductions upon conversion. Cheaper
transportation on the coast has modified this situation, allowing mills to locate centrally, and to draw timber supplies
by water from distant sources. 94
Areas Requiring Further Study
Since wood fibre can be shipped in many different forms,
detailed studies of the handling of various forms by different modes should indicate which is most economical. Plants for
primary wood conversion may be situated closer to the
resource, to remove unusable waste, and to convert wood into
an easily transportable form. For example, portable wood
barkers and chippers might be placed adjacent to logging
operations.
A firm operating a large central milling complex may
derive timber supplies from many internal and external
sources. An economic evaluation of each source can be carried
out to determine areas from which to draw timber species
and grades currently demanded at plants, at the least present
cost. Variables for each source, such as logging costs,
road building costs, and transportation costs, can be
assembled into a linear program to indicate the optimum amount
of timber to draw from each source annually. The program
should be updated as market and production conditions change.
Future Transportation Systems Under Development
Several other systems for wood transportation have been
under consideration in recent years. These include pipelines,
helicopters, and conveyor belts. Only the first two have
received worthwhile attention. Each system has proven to be
technically feasible. Pipelines will be close to realization,
once a few technical problems are solved. Helicopters may become economically feasible for short hauls, once lower cost operating techniques are developed, along with powerful machines. Original investment in each of these modes is high. Firms may have reservations on their investment until economic feasibility of these modes is proven. BIBLIOGRAPHY BIBLIOGRAPHY
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Williamson, H. H. Tariff Agent, Burnaby, British Columbia March, 1968. APPENDIXES APPENDIX I
Appendix I shows graphically, the various point to point freight rates from which the freight rate distance curves were derived in Chapter II. Individual railway rates were obtained from various railway tariffs and converted to a rate for common units of product measurement. Distances between points to which rates applied were computed from railway station distance tables.
The Motor Carriers Branch of the Public Utilities
Commission keeps records of all motor carriers operating on public highways. These records were searched by highways districts to find all carriers of forest products within each district. Rates charged by individual carriers over a specified distance were plotted by highways districts. Since there was no significant variation between districts, the information was combined for the entire province. Many trucking firms published rates for various distance classes. Some rates were gathered from large logging companies, as well.
The British Columbia Forest Service keeps records of transfer rate schedules by flat-raft and barge between various points on the British Columbia coast for purposes of stumpage appraisal. These records were used to plot rate distance transfer curves for water transport of raw forest products.
Some large towing companies were another source of water transfer rates.
MILES APPENDIX I - B RAIL AND BARGE TRANSPORT RATES FOR LOGS