December- January 01/02 - Logging and Sawmilling Journal -

BC contractor Balcaen Consolidated's approach to acquiring new and used equipment-along with its solid maintenance program-has paid off.

With tough economic times hitting the BC forest industry in recent years, many logging contractors have had to re-think their equipment approach, with an even stronger focus on cost savings wherever possible.

Contractor Keith Balcaen has seen a few industry cycles in his time. He's been around logging for more than 30 years, having started with a line skidder bought with $1,500 borrowed from his father. That proved to be a solid investment-Balcaen is still logging decades later.

Balcaen Consolidated Contracting of Vernon, BC was established in 1981 and between its work for two mills of Riverside Forest Products-180,000 cubic metres a year-and BC's small business program, it harvests anywhere from 300,000 to 400,000 cubic metres a year.

That's a lot of logging, but lean times in the industry mean that Balcaen, like many other contractors, is now hanging on to their equipment longer. While the equipment fleet is relatively new, this large contractor does not necessarily automatically look to new equipment when it's time for replacements. Often, a two- or three-year-old machine with low hours can be picked up in the used equipment market and that fits the bill.

"We used to turn equipment around on a regular basis, but things have changed," says Trish Balcaen, general manager of the company, who works closely with her father Keith. Keith, Trish and operations manager Jack Fisher form the management group at Balcaen Consolidated. She notes that the company used to turn around its feller bunchers every three or four years. "In ideal circumstances, we would have continued to do that." But ideal circumstances don't exist in the BC industry these days.

These days, the buncher line-up-all Timberjack units-includes a 1991 Timberjack 628, which is still performing well, 1993 and 1994 628 units, as well as a 2000 Timberjack 950.

While Balcaen has always had a good maintenance program, the need for a solid preventative maintenance program has been reinforced in recent years with the average age of the equipment fleet getting slightly older.

"We spend a great deal of time and thought on what we do in terms of maintenance," explains Fisher. "In the last few years, conditions in the industry have changed. Things are a lot more lean now."
In making the decision on whether to purchase a new piece of equipment, Keith reviews their overall business picture, industry conditions, as well as their options in sticking with what they currently have.

Trish points out that her father makes the key decisions for the company, such as equipment purchases, but with important input from herself and Fisher.

In the past, they had some rules of thumb for how often equipment-such as skidders and roadbuilding equipment-should be turned around. "Anything with wheels on it was basically three years, and anything with tracks was pretty much four years," Trish says. But these days, they are looking at extending that, taking skidders to four years, for example. Even when it's clearly time to sell a piece of equipment, they look at what's happening in the used market, as well as considering a new machine.

"We're not necessarily always looking for a brand new piece of equipment," she says. They updated from a 1994 model to a 1997 with the last loader they bought -a Cat 950F.

The last excavator they picked up-a Cat 325RB-was a 1997 unit with only 3,000 hours on it. "We're actively out there in the used equipment looking for the buys, and they are there," says Fisher.
While they are looking to keep their existing equipment going, they want to keep downtime to a minimum at the same time.
Central to Balcaen's preventative maintenance (PM) program is a paper-based-soon to be computerized-system they've developed. The system is simple, but the key is faithfully making sure the maintenance is done.

Each of the 35 pieces of logging equipment, eight logging trucks and everything from pick-up trucks to ATVs, all have a PM sheet. All work performed on a piece of equipment is recorded on the sheet.
Fisher notes that when he joined the company eight years ago, they only had 13 pieces of equipment. "At that time, I could pretty much keep all the repair information in my head." But with the growth in the equipment fleet came a need for a paper-based system.

Predictably, spring is the busy time for maintenance at Balcaen. All the equipment comes into the shop for regular maintenance and reviews are done for anything special, such as engine or transmission work.

"If we don't carry out that kind of preventative maintenance, instead of it being a $5,000 or $10,000 job here in the shop, all of a sudden its $30,000 for a transmission that packs it in out in the bush," says Fisher. "Plus you'll lose a week of production with the machine."

Besides Fisher and heavy duty mechanic Lee Yarish, the foremen and a few of the operators will assist with the repairs. "They're not licenced mechanics, but some of them can take a buncher apart as good as I can," Fisher says. Out in the bush, the operators take care of the greasing and carry out the regular maintenance work. The foremen are qualified to carry out more major jobs in the bush, as well. "Basically, our maintenance program involves the entire staff," says Trish. "It's a real team effort."
Balcaen is logging in some fairly remote and rugged areas of the southern interior of BC and they are not shy about taking on tough jobs. "Dad's motto is we will go anywhere and do anything on the harvesting side," Trish says.

With that in mind, Balcaen maintains a good supply of parts in the shop and out in the bush.

"We have parts like spare cylinders for the bunchers and we have our own hose press," says Fisher. "It's very seldom that we are stuck. If we don't have it, we can usually figure out a way to keep going until we get the part in."

Balcaen matches brand with each phase

Contractor Balcaen Consolidated has tried to stay within one brand in each particular phase of its logging operations. The bunchers are all Timberjack, the skidders are John Deere and the loaders and roadbuilding equipment is mostly Caterpillar.

"More than anything, that's for basic things like filters and hoses," says operations manager Jack Fisher. "If you've got a mix and they're working on the same side, you have to have a separate set of parts for each brand. "And they do break down. It doesn't matter who built it, they all get into trouble from time to time."

Record keeping has allowed Balcaen to build up equipment history, indicating which particular brands are good-rather than just acceptable-for certain phases of logging, at least for them. They try to select the equipment for each phase of work that will deliver the best performance, based on these records and experience.

In terms of equipment performance, it's not necessarily that machines from some companies will do a bad job at certain things. It's more the natural evolution of the equipment market, with some companies, from Balcaen's perspective, being more pro-active than others in terms of incorporating new features. That may be a more powerful engine, an improved transmission or it may just be plain easier to service.

While they have always tried to match the best machine for the job, tighter economic times have recently driven home the point even further.
"More than ever, the value has to be there," says Balcaen general manager Trish Balcaen. "All of the equipment we use has to pay its way."

Uptime is obviously critical to the success of the overall operation. "We have only so many days a year to work," says Fisher. "If we have to work until midnight to keep equipment going, we do it."
There is almost a laser beam focus on maintenance at Balcaen. "We don't let anything go on our equipment, especially when it comes to safety," says Fisher.

The RCMP, along with the province, does regular random spot checks in an effort to make sure heavy duty trucks operating on BC highways are safe. More than a few forestry trucks have been pulled off the road immediately for infractions. "Not one of our trucks stopped in a spot check has ever had to be parked," says Fisher. "These guys will always find something minor, because that's why they are out there. But it's never something that will take our truck off the road, not even close."

Simply because they are on the road so much, the trucks are in to the shop on a fairly regular basis-which is a good thing in Fisher's book. "I don't care what anybody says, logging trucks are high maintenance. They're hard on tires and they're hard on brakes." In addition to hauling logs, Balcaen's trucks are also moving the heavy equipment with two low beds.

While the PM system requires discipline, there is also some flexibility. Rather than adhering strictly to getting a piece of equipment in the shop exactly at a set number of operating hours, they work with the woods foremen. If a piece of equipment is going to be moving soon to another logging show, and it's going right by the shop, the maintenance may be scheduled sooner or later, based on an efficient move.

They are looking at putting their maintenance system on computer, but have yet to find the right system. In one attempt, they spent many hours inputting maintenance data, only to lose it due to a technical glitch. "It was horrible," Trish says.
And even when they do find the right system, there will be still be a paper back-up. "Paper is good," says Fisher, speaking from experience.

They continue to improve their system, however. They are working to factor in sometimes intangible overhead costs, such as parts inventories, into coming up with the overall cost of operating each piece of equipment. "We are trying to become more sophisticated in terms of determining the costs of running each piece of equipment and its productivity," says Trish. "The information is there-we just need to pull it all together."

And coming up with real, hard operating costs is important, Trish says. While she is a woman in what is still predominantly a male business, she has been around logging since she was a kid and she knows iron-and from her last eight years at Balcaen, she knows that logging conditions can vary.

"One thing I've learned about this business is that every situation is different. The ground is different-you could be working on rock, gravel or in a sandy area. You could be working in swampy areas or in heavy snowpack. The timber is different-species, diameter and the condition of the trees impact production to a large extent."
In one recent logging show, Balcaen was working in high elevation, steep ground, deep snow and with old growth cedar and hemlock. They needed almost twice as much equipment to achieve the same production as a conventional logging side.

These situations make it tough for contractors to put together accurate costs for running each piece of equipment. At best, they produce an average cost over the year. "You can quote out a skidder for $100 an hour and you can make money on a straightforward job, but you could lose your shirt on another more complicated job," she notes.

That said, Trish, who is vice-chair of the Interior Logging Association, has been part of a team that has put together a new logging section for the blue book, which quotes operating rates for equipment. Up to now, the book, which is used as a guide, only had quotes for construction applications, such as roadbuilding. But there are now hourly costs for bunchers, skidders and excavators. "We now have hourly costs for logging equipment that we can really use," she says.

Used iron can be a good option

While Balcaen Consolidated continues to buy its share of brand new equipment, it has also had some good experiences in the used equipment market.
"In the last few years we've actually bought a few pieces of good used equipment, with low operating hours," says operations manager Jack Fisher.

The one exception to this are logging trucks, which they buy new, including two new Kenworths last spring. Logging trucks simply take too much wear and tear, says Fisher, so they simply opt for new rather than used.

On the selling end, the detailed service records Balcaen maintains certainly help to move their own used equipment. The other contractors or companies purchasing Balcaen's iron know that it has been taken care of-the full service record on a machine is readily available.

Some of the equipment dealers, such as Cat dealer Finning, offer Internet sites for used iron. It's a nice benefit, says Balcaen general manager Trish Balcaen, but not one that they needed, at least in this particular situation. "It's a small world," she says. "We all know each other in this business in this area. Sometimes, it's a matter of mentioning that you're selling a piece of equipment to a trucker at coffee time and next thing the whole world knows."
The used equipment market seems to be quite active in BC these days. Balcaen says they are getting some good prices for their used equipment, which is a bonus. But at the same time, they are also looking at some pretty firm prices when they go shopping for used equipment themselves, so in some ways it is kind of a wash.

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