Soft Logging Markets Keep Pressure On, But Opportunities Still Exist
You may or may not realize it, but it’s because of a tire that you’re reading this article.
No, I’m not talking about the tires on the truck that delivered this magazine to the printer. Nor do I mean the tires on the mail truck that brought the finished product to your door. I’m talking about the tires on the forestry equipment that harvested the tree that made the paper you’re currently holding.
Forestry is often overlooked, and for obvious reasons. It’s a small, highly specialized, heavily-regulated business. And most people don’t pay any attention to how many trees are cut each year, or think about how much that industry means to our everyday lives.
But tire dealers shouldn’t overlook the market, especially if they operate near forestry operations and can get in on the business.
State of the Union
Flux is the word to best describe the forestry market right now. The market has gone global, there’s overcapacity in certain areas, and the market is soft.
Sounds eerily like other businesses. Problem is, the true forestry market is small. And in a small market, downturns can have major ramifications.
"The forestry market is undergoing change and it has led to difficult market conditions," said Michael Bogunia, national sales manager for Firestone Agricultural Tire Division. "There’s been overcapacity of timber for paper and wood products. The result has been fewer loggers, with larger operations with bigger machines who are still op-erating under limited production quotas. This trend is likely to continue for the next several years."
But a struggling market can sometimes be the right environment for dealers and manufacturers to grow. It forces companies into trying something new and looking for different ways to improve business.
"We believe that the market has evolved," said Bob Sherkin, president of Dynamic Tire. "It seems that more is being done with less, as in every other industry. This has created the impression of a soft market and perhaps it is. But when the market is ‘tough’ like it is today, it provides opportunities for new products to be tried by the marketplace."
As the forestry market is fluctuating, or evolving, it is also becoming more efficient Ð cutting away some of the underbrush, so to speak.
"New techniques in cutting and harvesting have enabled the forest industry to become more efficient," Sherkin said. "Issues such as forest resource management, recycling, and political intervention with agencies like the EPA, have led to a new level of awareness and concern for issues like re-forestation and enhanced timber growth.
"In order to meet these needs, timber harvesting methods are changing and different machines are being used, which is increasing tire size proliferation. So, while logging is now more complex and challenging, there remain opportunities for those who wants do it right."
Going to Market
For the limited number of manufacturers that operate in the forest industry, going to market can be a bit of a challenge. After all, this isn’t the passenger or performance tire market. You don’t just setup a company-owned store outside of 3,000 acres of timber and wait for the flood of customers.
More than ever, manufacturers and dealers have to be partners and work to accomplish their mission together.
"We want to be part of our dealers’ business," said Sherkin, whose Primex line "does not compete against its dealers. We do our best to support them with quality products, designed, engineered and monitored to be the best-valued tire in the market today.
"We supply a comprehensive line of forestry tires to cover most of the sizes that a dealer will see in his market. And we listen to our dealers."
For Firestone Ag’s Bogunia, going to market with forestry tires means exactly the same as it does to Sherkin. The manufacturer and dealer must work together for the good of both parties.
"The key to marketing these forestry tires is to meet you customers’ needs," Bogunia said. "Continuing education and exchange of ideas with tire dealers is very important to successful marketing of forestry tires.
"Tire dealers that know our products and how to use them provide the best opportunities for success."
Getting In On the Action
A tire dealer has to work hard to either get in, or stay in, the forestry market and survive. Naturally, it helps to be in the right geographic region, but that’s not all that’s involved.
It takes training, it takes quality service, it takes manufacturer support. It takes three key things that customers want: "good value, product availability, and service, service, service," said Dynamic’s Sherkin.
"Part of the evolution in the forestry market has been the advent of smaller independent logging contractors," he said. "Tire dealers have to work diligently for these customers by having the tires available when they need them, and being able to provide mobile mounting services."
Service means just as much, if not more to the forestry market, than say, to the OTR market, for example. Customers are often in very remote places, using machines in harsh conditions. When something goes wrong, they need help in a hurry.
"Know your customers and provide the fast, quality service the customer needs," said Bogunia. "The dealer must stock and supply wheels, as well as tires, to support his forestry tire business.
"As an example, let’s say the weather has turned wet, and logging conditions are difficult. The logger has a new skidder on order from his OE dealer but now the logger wants the machine equipped with wide flotation tires for wet operating conditions. The OE dealer contacts his tire supplier, who converts the machine over to flotation tires and wheels needed by the logger. Fast service is vital or the sale of the equipment and the tires may be lost."
Manufacturers are always more than willing to help dealers in the market. Without the dealers, there’s really no need for the tires.
"Many of the tire manufactures support the dealers with incentives, training and marketing programs," Sherkin said. "Dealers need to align themselves with a manufacturer that can supply a broad range of products, including European sizing, wide flotation and specialized designs. Dealers need support, from simple engineering information to detailed market assessments.
Just as with anything else, new technologies continue to roll out in the forestry tire industry. And apparently, bigger is better. "Systems" are becoming increasing popular, and manufacturers are still working toward reductions in ground disturbance.
Of course, there’s the ever-present emphasis on downtime.
"Current market trends toward larger machines and bigger operations means loggers cannot afford machine downtime and lost opportunities," Bogunia said.
"We have adopted an improved cut-resistant tread compound on our forestry tires. We offer a severe service construction in two popular sizes, with 20% additional tread base and sidewall rubber, stronger body plies and a stronger bead construction.
"Firestone also has new large flotation tires which provide large load-carrying capacity, with huge footprints to help protect the forest soil and environment."
From a machine standpoint, the industry seems to be leaning toward less labor-intensive methods. Costs are still going up, but the leaps in technology seem to be able to justify the equipment price tag.
"Old time skidding of logs is a dying thing. New log harvesting systems, where one machine cuts and delimbs a tree, has made logging easier from the workers’ point of view," Sherkin said.
"While this new ‘cut-to-length’ equipment is expensive, the efficiency and productivity possible with them justify the up-front capital investment cost.
"These new and different machines typically require a different tire solution, so it’s important for the dealer who wants to service the forestry market to be sure to select a tire supplier that can meet the needs of this changing market."
Sometimes, the latest and greatest can come from a dealer’s ideas. You never know what fleeting thought might lead to the newest technological wonder.
"We are constantly developing and introducing new products based on our dealers recommendations, and with a view to the market’s needs," said Sherkin. "We have a passion for forestry tires and if the tire dealers wants to succeed in servicing this market they will need to develop this passion as well. It’s no different than any other market segment."
Like other markets, the forestry industry requires a lot of work Ð by loggers, equipment producers, tiremakers and tire dealers.
If a dealer is of a mind to succeed in the market, it can be done. Find the right manufacturer, build a relationship and service the heck out of customers. Dealers can make it as long as they can see the forest through the trees.