Page 21 - Georgia Forestry - Issue2 - Spring 2018

king a Hit
Georgia Forestry Foundation study reveals the impact of log truck insurance increases on forestry supply chain
Story by Matt Hestad
The sign outside of Mac 44 Forestry LLC in Offerman, GA, reads “Now Hiring Experienced Timber Relocators.” Recruiting qualified, safe log truck drivers is just one of the many issues that owner Tracy Harris faces. But there is one issue that remains at the top of his list, one that he works on daily, and one that has the highest impact on his busi- ness — trucking insurance.
For Georgia’s forestry industry to remain competitive, the state’s logging sector, which provides vital connectivity from the forest to mills, must remain profitable. So, the Georgia Forestry Foundation’s Center for Forest Competitiveness worked together with the Warnell School of Forestry and Natural Resources at the University of Georgia to research the changes in log truck liability insurance, iden- tify the reasons for rate increases and make recommendations on how companies can combat higher insurance prices.
“Insurance has gone up every year even if there were no losses in the previous year,” said Harris, whose company serves as a con- tract trucking operation with more than 60 trucks. “It takes a lot from my bottom line to pay additional
premiums, which takes revenue away from growing and sustaining the business.”
The Warnell School conducted a survey of logging company owners last year that showed that transpor- tation costs and trucking insurance were the second and third highest concerns for logging businesses across the state.
“Georgia is the number one for- estry state in the nation,” Andres Villegas, president of the Georgia Forestry Association, said. “That is only possible when the entire for- estry supply chain is profitable — we all rely on each other.”
Hauling timber accounts for 25-45 percent of overall timber harvest- ing costs in Georgia. The highest volume of wood is hauled by small to mid-sized operations with three to ten trucks. In recent years, liability insurance premiums have put a large amount of stress on the average-size operation, with some experiencing up to 300 percent increases and others being denied coverage completely.
For companies like Sanders Logging Company, insurance rates can significantly impact the overall success of the business.
“It’s a tough deal,” Vice President Harry Sanders said. “Our business already operates under extremely tight margins due to the rates
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MATT HESTAD