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5. Conclusions and recommendations

Efficiency analyses in most cases yielded marginal results for operational and energy efficiency in transport as well as for organisational indicators, thus generating low values for financial efficiency. Only one company, ARCA, achieved a favourable overall result, since the company’s logging area was structured spatially for efficiency and the cost of second loading and transport were externalised. Table 5.1 provides an overview of the efficiency results for the companies studied.

Table 5.1 Configuration of critical properties for efficiency in the analysed companies.







Roads and spatial structure



Extraction intensity



PT in logging






PT in transport


Production volume



Effective unit costs


Profit margin/deficit


+ / –   Analysis suggested that the quality or value of the property was relatively favourable / unfavourable.

Results suggest that commercial timber harvesting as it was practised under the observed conditions in these five companies generates no or little benefit and hardly justifies employment of the capital, workforce, and energy required for extraction and processing.

5.1 Main outcomes

In logging, the overall levels of operational efficiency achieved were sufficient, or nearly so, to maintain a consistent flow of raw materials in most of the companies. However, lack of spatial structuring and low recovery rates kept production levels well below the break-even points in most cases. The work studies documented improper working techniques and poor maintenance of felling and crosscutting equipment, problems associated with extraction of scattered and sometimes inaccessible logs, and first landings that were poorly prepared for loading. Technological productivity in transport constituted the main bottleneck, where poor road conditions, low load capacities of vehicles used in first transport, and long hauling distances in second transport impeded raw-material flows and restrained annual production volumes.

Two different strategies were observed relative to organisational efficiency. ÁLVARO de CASTRO and SOMANOL used obsolete equipment with low technological capacities in an effort to minimise capital inputs. This resulted in low production volumes and low labour productivity. The other three companies used more productive equipment in an effort to maximise production. ECOSEMA and MITI were unable to achieve this goal at a level that would make them profitable. At ECOSEMA, low stocking of commercially valuable trees in the repeatedly logged-over forest restricted extraction potential and resulted in low log prices. At MITI, a poor road network in the logging area hampered truck utilisation. Only ARCA was able to achieve good results in all organisational indicators.

Energy efficiency in logging and first transport was, except for SOMANOL, achieved at indicator levels greater than 1.0, indicating that the estimated energy value of logs recovered exceeded the energy value of fuel consumed during the operation. However, high fuel consumption and low productivity in second transport and processing reduced the energy balance for the complete operation in all cases below 1.0 (in most cases far below), indicating inefficient energy use overall.

Financial efficiency varied as a function of production volume, the degree of final-product conversion, and the distance between the logging area and the processing plant or point of sale. In four of five cases, total effective unit costs were exorbitant. While only 18 to 33% of these costs were incurred in logging and first transport, second transport and processing were extremely high-cost operations in nearly all cases. Most companies generated pronounced deficits at low annual production levels which prevented them from covering their fixed costs, and with low levels of technological productivity in transport and processing that made it impossible for them to cover high variable costs. Only ARCA managed to limit unit costs and attain a profit by efficiently employing equipment and personnel, thus producing on a relatively high level. ARCA also was able to externalise costs for second loading and transport to the sawmill that bought the logs (but at the cost of a low price for its logs). The break-even point, varying as a function of sales revenue and cost structure, was far beyond the actual production volume for four of the five companies although within the limit of technological capacity for three of those four. Results suggest that companies producing processed timber close to the logging area would have attained their break-even point with lower production volumes than those selling logs far from their origin.

5.2 Impediments

Being subject to operational, organisational, and institutional constraints, logging efficiency was limited by low production levels and high unit costs. The main shortcomings found in the study were low extraction intensity, lack of harvest planning and preparation, and low productivity in transport and processing.

5.2.1 Low extraction intensity

In the logging areas visited for this study, commercial species of the sizes required for harvest occurred in a scattered distribution. Demand was concentrated on a small number of species and maximum diameters. The working techniques employed in felling and crosscutting converted only a small fraction of the available tree volume into logs prepared for extraction. All this contributed to low extraction volumes per hectare. In addition, government inspection practices, requiring not the trees harvested but rather the logs passing road checkpoints to comply with minimum diameter limits, had the effect of encouraging the poor recovery rate. Moreover, buyers’ scaling practices excluded sapwood entirely, thus reducing log volumes significantly at the point of sale.

5.2.2 Lack of harvest planning and preparation

Scattered timber resources call for systematic harvest planning and preparation. Establishing and maintaining a road network and spatially structuring the logging blocks facilitates access, survey, felling, and extraction and thus helps to organise operations so that raw material flows can be maintained at the required level. Most of the companies in this study were unable to cope with these requirements. The practice of granting cutting licenses based on the volume extracted provided little in the way of incentives to invest in infrastructure, spatial organisation of logging, or sustainable resource management in order to optimise extraction intensity. Instead, logging was carried out in an ad-hoc, largely unplanned way.

5.2.3 Low productivity in transport and processing

Transport operations, already hampered by the scattered distribution of first landings, also suffered from insufficient road networks and poor road conditions. Hauling equipment often travelled with small loads at low speed. Long hauling distances, particularly in second transport, increased operating time and restricted technological productivity to an extremely low level. This in turn impaired raw-material flows, thus affecting log supply and machine utilisation in subsequent processing. The detrimental influence of poor road conditions and long hauling distances suggests that beyond 15 km in first transport and 120 km in second transport, log hauling under the conditions observed in this study is unlikely to achieve a satisfactory level of efficiency and maintain a consistent flow of raw materials.

5.2.4 Impacts of impediments to production

A typical small-scale logging enterprise starts production on the basis of a cutting license granted for 500-2,000 m3 without investing in a management plan, road network, or spatial structuring. Scattered timber resources strangle raw-material flows right from the beginning. Extraction and transport bring high unit costs for fuel, lubricants, tyres, and wages, which internal accounting perceives as production costs. Sales revenues hardly cover the expenses of current production. In order to save the apparent profit (according to internal accounting, sales revenues minus the cost of consumables and wages), the company reduces expenses for fuel and spare parts by slowing down current production rather than taking positive action. ECOSEMA, ÁLVARO de CASTRO, and SOMANOL were all entangled in this spiral of declining efficiency that finally forced them to suspend their activities.

5.3 Proposals for improving efficiency

In order to improve efficiency, annual production should be raised to a level that will cover both fixed and variable costs, and efforts should be made to increase technological productivity in critical phases, particularly in transport. A set of guidelines that might help to achieve this goal are summarised in Table 5.2.

Of paramount importance for improving efficiency in commercial logging is the need to increase productivity by harvesting a larger number of commercial species and by recovering a greater volume per tree felled. In addition, it is essential to increase the volume per load and speed of extraction and transport, and to reduce hauling distances by locating processing units as close as possible to logging areas. Improving the efficiency of logging practices will require minimum annual production levels of around 2,000 m3 in order to cover costs. Whether industrial enterprises are willing to invest in decentralised, integrated production under these conditions depends on the logging area’s long-term potential for commercial timber. It must be sufficient to avoid short-supply situations with negative impacts on production costs as well as resource degradation caused by over-exploiting certain species. These aspects have to be clarified by applying appropriate planning instruments. Regarding the constraints imposed by dispersion and low increment of commercial species, efficient and sustainable logging should be confined to areas rich in diversity and abundant in commercial tree species.

The practices suggested in Table 5.2 must be implemented in the context of sustainable forest management, which implies that the area under management must be well delimited and demarcated, with land-use rights clearly defined and granted on long term. Without legal security, companies are unlikely to invest in the necessary road networks, to establish permanent processing and maintenance facilities, or to make the considerable effort needed to optimise extraction intensity.

Table 5.2 Recommended practices for improving efficiency.



Better use of timber resource potential

Harvest planning and preparation

·    Improved conditions for access, survey, and systematic forest management. Controlled achievement of required production volume.

·    Elaborate a stock map of the logging area and divide it into marked and numbered management blocks; install and maintain a network of main and secondary roads.

·    Reduced distances and increased speed of extraction; optimised pre-accumulation of logs; reduced damage to residual stand.

·    Establish crews for surveying and spatial structuring of blocks to be logged: select, measure, and register trees to be felled and mark the direction of fall; mark skidtrails; determine landing sites; and elaborate detailed sketches of planned extraction.

·    Increased extraction volume per hectare.

·    Extract logs of all commercial species within the limits of sustainability.

More efficient and safer logging

Applying better equipment, working techniques and procedures

·    Increased recovery rate and extraction intensity; reduced damage to residual stand.

·    Introduce directional felling, cutting as close as possible to the ground, and crosscutting the maximum volume per tree prepared for extraction.

·    Improved efficiency and safety in felling and crosscutting.

·    Use crosscut saws or chainsaws with all safety devices, and wedges for directional felling; provide maintenance tools for crews to use.

·    Fewer delays in hooking and increased loads per extraction cycle; reduced soil disturbance.

·    Introduce chains with tip plate for hooking and hydraulic notch beam fixed to three-point linkage of tractor for hauling multiple logs partially suspended.

·    Fewer interruptions during loading.

·    Improve organisation of first landings and position the logs according to loading sequence.

More efficient 1st transport

Investing in machinery and road network

·    Increased load capacity and speed of vehicles used in 1st transport.

·    Employ trucks with capacities of at least 6 t.

·    Increased average speed in 1st transport.

·    Invest in grading and drainage of roads used for 1st transport.

More consistent raw-material flows

Configuring logging area, landing and processing facility or point of sale

·    Improved efficiency in transport.

·    Limit hauling distances to 15 km in 1st transport and to 120 km in 2nd transport.

·    Optimised log supply and utilisation rate in processing.

·    Decentralise processing by locating sawmills as close as possible to the logging areas.

Better logistics and equipment

Investing in permanent maintenance facilities

·    Increased technical availability of vehicles. Improved performance of crosscut saws and chainsaws.

·    Develop a well-equipped maintenance workshop with fuel and oil tanks at the main landing in the logging area.

Better workforce performance

Developing training program and task descriptions

·    Improved efficiency and safety in all operations.

·    Implement training programs in recommended practices and in occupational safety.

·    Improved synchronicity of operations.

·    Establish task descriptions for each crew, including quantitative and qualitative production targets.

·    Improved working and living conditions for workers.

·    Provide adequate remuneration, nutrition, camp facilities, transport, and health assistance.

The efficient and sustainable use of timber resources must render benefits for the local population, establish a nucleus of skilled professional workers, and invest in appropriate equipment, occupational safety, health, and housing (JOHANSSON & STREHLKE 1996). Enterprises committed to efficiency and sustainability must make sure that workers are properly remunerated and live in adequate conditions. In addition, it is essential to conduct training courses in working techniques and occupational safety on a regular basis, and to optimise the ergonomic features of applied technologies and operations.

Whether these recommended practices improve efficiency in commercial timber harvesting and the degree to which more efficient practices would conform to standards on reduced environmental impacts and socio-economic sustainability deserves further attention through field research.


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