Skidder/Operator hourly value

[miketclew]

I was recently asked to take a job where I stay on the machine. Good professional choppers and a ground crew setting chokers to my instruction.
Thoughts on an hourly rate for a Clark skidder (353) and operator?




 

[logman81]

I did just that with a c5d I got paid 25hr I set chokers.

[chevytaHOE5674]

I dont own a skidder, but for me and any piece of my equipment (skid steer, tractor, backhoe, etc) if I'm not getting a minimum of 100/hour then ill park it and do something else. The cost of fuel, oil, tires, parts, etc is expensive. You need to be making enough for you to live on, insurance to get paid, maintance/fuel is paid for, and saving up for when a motor blows, or axle grenades, etc.

[newoodguy78]

Is it your machine or someone else's that you'll be running for them? If it's your machine like chevy said don't short yourself parts and breakdowns always seem to cost more and last longer than expected. 

[OH logger]

Before this hyper inflation period I was told for rent $100/ hour for every $100,000 the machine cost. So an $80,000 machine should rent for $80/hour PLUS operator. But at todays cost that's not enough. Fuel, filters, tires all
Other parts are through the roof. I have to change ALL fluids and filters in my skidder this spring. Filter sale goin on now at my Deere dealer. Still
Cost $1200 😮. 

[240b]

140/hr plus moving costs both ways. And a minimum of 4hrs.  

[C5C Tree Farmer]

If the skid you pictured is typical of what you will be pulling your 664 is not going to be overloaded. Looks like the major expense will be fuel and maybe a mainline and a few chokers. If fuel was provided I'm thinking you could do well for yourself @ 50.00. I know I could with the C5.

[ehp]

I'm more with OH logger , I use to think if I made a grand a day for me and my skidsteer and skidder  I was ok, not making money but not going in the hole and I work by myself , that will not work today with all cost so high, fuel, parts, tires and cost of machines 

[chevytaHOE5674]

If the skid you pictured is typical of what you will be pulling your 664 is not going to be overloaded. Looks like the major expense will be fuel and maybe a mainline and a few chokers. If fuel was provided I'm thinking you could do well for yourself @ 50.00. I know I could with the C5.

So at 50/hr if you take 25 of that as a wage. The other 25 covers all maintaince, insurance,  and puts money away for major repairs or upgrades down the road?

[Hogdaddy]

If the skid you pictured is typical of what you will be pulling your 664 is not going to be overloaded. Looks like the major expense will be fuel and maybe a mainline and a few chokers. If fuel was provided I'm thinking you could do well for yourself @ 50.00. I know I could with the C5.

That would be cheap, even for here in my neighborhood.  

[230Dforme]

Good afternoon 
$100/ hr plus in and out

[ehp]

my logging insurance cost rose just over 50% for 2023 over 2022 

[OH logger]

my logging insurance cost rose just over 50% for 2023 over 2022

My liability insurance for the loggin bidniss went up
By half about 2 years ago. My insurance guy beat inflation to the punch I guess🤦‍♂️. He got expensive before expensive got cool lol

[stavebuyer]

Without questioning anyone's costs or pointing political fingers, how do we get off this out of control merry-go-round? If $50k is the new minimum wage, then what will it be 2 years from now when all the "new" costs are passed through the system?

Stave log prices doubled circa 2010 but I was actually worse off. Inventory costs doubled but margins did not. I think we end up pricing ourselves out of more export markets.

[Southside]

Simple, we crash to the bottom.  There is always one more rung on a ladder, the issue is being able to actually stand on it.  

[BargeMonkey]

Without questioning anyone's costs or pointing political fingers, how do we get off this out of control merry-go-round? If $50k is the new minimum wage, then what will it be 2 years from now when all the "new" costs are passed through the system?

☝️☝️☝️. Better equipment, less people. I see it everywhere, McDonald's, gas stations, look at all the tech company lay offs. 
 Too many variables with this question, are you putting wood out on production ? How longs the skid ? Pounding a machine ? 80-100hr in bald eagle money, depends how bad they need you. The only guys I know right now still driving it home on rates are dirtwork guys, I'm watching guys starting to starve at home with the ground giving up. 

[stavebuyer]

The increased productivity of better equipment has reduced labor costs. A guy crops thousands of acres when his grandad had a full time job keeping up with 40. That increased productivity kept the price of corn down. Now the other inputs have all gotten so high, its going to take something besides a bigger combine to keep food and lumber affordable All those 40 acre farmers went to work building combines, pickup trucks, and appliances. What are the coming generations going to work at? 

I see us sending money oversees until they wise up and decline our credit card.

[quilbilly]

I'd personally shoot for minimum of $50 per hour after move in, and fuel. That's only for a cake job and if you need the work. Our skidder doesn't use much fuel so we would do $100 per hour plus the move. 

If I can get a job working for someone else and they pay $25/hr wage plus whatever they pay for L&I insurance plus machine fuel and maintenance, and maybe benefits? It's at least $50 per hour. So if you are doing that much or less it's better to work for an ok boss for a wage than yourself for less. 

[ehp]

Problem is what the logger gets paid is no where even close to keeping up with logging cost , well around here thats what is happening , you got to think a ways a head on what its really going to cost you to log . Fuel is just crazy , I just paid $304 for motor oil so I can change it in the skidder tomorrow , that is up alot . If you take what you made say 2 years ago for profit on lets just say $100,000 worth of timber and compare that to today that number now has to be higher and not by just abit cause if you end up with the same number you are going backwards quite fast cause everything you buy went up a big amount . If you keep that going long enough you will be in the poor house bad at the end and sitting with a bunch of worn out equipment and no way you can afford to upgrade or fix what is broke . Now Barge this is nothing for you to read cause you do not deal in these small numbers , yes I know I would have to add a couple zeros to that figure but not all of us can deal in those big numbers . Its going to get pretty bad and its happening now , interest rates are going threw the roof , no houses to speak of and being built. Lumber yards are laying lots of their workers off , Big tech companies are laying off more and more everyday ,  it's not going to be a fun ride I do not think 

[barbender]

To put yourself in Barges's mindset, take all of the numbers you work with, and add 2 or 3 zeros😁😂

[miketclew]

Thanks Guys! A lot of great feedback. The circumstances really do matter.   

Out of curiosity are there any bigger outfits that have put an expense number on a cable skidder + operator employee? I believe the term accountants use is the "Loaded Labor Rate".

It's probably a long-shot, I'm guessing most needs for cable operators are fulfilled through independent contractor relationship - given workers comp costs and a whole slew of other obstacles.

Mike  

[Zewnten]

when I figure out equipment and operator rates I do a couple things. First is this a long term job or do I need to charge for the loading and unloading? Second what would it cost to replace your equipment; take the monthly payment and divide that by hours expected to be used that month. For example skid steers I used to charge $40/hr just for the machine, 3-5 years ago. Now decide what you want your labor rate to be; what would someone expect to make sitting in that seat, and add 30-40% of that back to it to cover taxes, SS, etc. Bet a $100/hr won't even cover expenses. 

I work dealer now and we charge $230/hr plus mileage. A service truck isn't any more expensive to run than heavy equipment.

[230Dforme]

Good afternoon miketclew

Believe you may be overthinking this a bit

If you are offered work, like any other contractor, you decide what you want to charge and offer your services at a price
I assume this is a short term job, so no no great commitment 
Possibly #1, all goes great, you make money, customer is happy and you get more work from him and others
Possibly #2, it doesn't go so well, but you should always finish and not bail out unless real crap show,
you will know first day
You may lose your time, fuel etc, but that is contracting / business 
In my construction business you cannot bail, you must finish 
It's called risk, no risk, no reward
Done it for 35 years now

Go do it, what could possibly go wrong 😳

[Stephen1]

My sawmill and truck are 130k so I charge $130 hr, minimum 4hrs plus travel both ways. Same as what is said above about cost of the machine, I had heard on here years ago that ever $1,000 worth of machine is $1hr and that is how I have always rolled. No sense in working if your not making money. 

[nativewolf]

Interesting thread.  Hope you get a rate figured out.  I guess I am surprised anyone is cable skidding pulpwood.  I don't see the economics on that.  

[chep]

@nativewolf



Yes people can skid pulpwood. Right. Now in our area hardwood pulp is pay 60-65$/ton delivery before trucking. And I know certain guys with contracts for more $$
That's not bad money if you are in a decent pulp cut
I know where you are it's not worth it. But if there was a time to pull it around here it's probably right now

[nativewolf]

 @chep that answered the question! 

[Riwaka]

The Forest Service skidder rates for 2009 based on Blue Book rates.

Class Age (years)
 The two prices are supposedly for a 5 year old and a 15 year old machine (bureaucrat thinking) One might use a lower hour or higher hour machine classes?

Wheel Mounted Log Skidder: Diesel, Powershift
Deere 540G III, Cable, 117 HP,
Maximum Line pull: 35,029 lbs $85.10 $82.90

Franklin 405 S2, Cable, 135 HP,
Maximum Line pull: 40,000 lbs $86.80 $84.70

Franklin 405 S2, Grapple: 100" , 135 HP,
Winch-Maximum Line pull: 34,000 lbs $97.30 $94.90

Caterpillar 525B, Cable, 160 HP,
Maximum Line pull: 40,300 lbs $115.60 $112.80

Caterpillar 525C, Grapple: 120" , 182 HP,
Winch-Maximum Line pull: 39,342 lbs $141.40 $137.70

Not sure how one could lower the rate, maybe using old restaurant cooking oil blend in a skidder that can handle it. 

[newoodguy78]

The rise in operating costs as of late are enough to totally nullify 2009 operating costs. Anyone using those numbers to operate these days won't be able to keep up with the work coming in then be left wondering why they can't afford to put fuel in their pickup let alone pay for a routine service or breakdown. 

[Blue Noser]

My sawmill and truck are 130k so I charge $130 hr, minimum 4hrs plus travel both ways. Same as what is said above about cost of the machine, I had heard on here years ago that ever $1,000 worth of machine is $1hr and that is how I have always rolled. No sense in working if your not making money.

So a new off the lot Scorpion King can fetch CAD$900/hr? (Purchase price of CAD$900,000). If you assume it depreciates 33% of its value when you drive it off the lot that's still CAD$600/hr when it's new. That's 3-4x what it's actually worth per hour.

[miketclew]

Good afternoon miketclew

Believe you may be overthinking this a bit

If you are offered work, like any other contractor, you decide what you want to charge and offer your services at a price
I assume this is a short term job, so no no great commitment
Possibly #1, all goes great, you make money, customer is happy and you get more work from him and others
Possibly #2, it doesn't go so well, but you should always finish and not bail out unless real crap show,
you will know first day
You may lose your time, fuel etc, but that is contracting / business
In my construction business you cannot bail, you must finish
It's called risk, no risk, no reward
Done it for 35 years now

Go do it, what could possibly go wrong 😳

Oh, I don't think so (overthinking it). You probably misunderstand my intent. I already had a rate in mind, given all my fixed expenses and stomach for variable expenses, limits and capabilities. I was more curious what the range of responses would be. Let's face it, there are so many variables involved in contracting in general, let a lone forestry. All markets, soils, acres, machines, operators, ground conditions etc, aren't created equal - and on and on an on. 
Too many times people have bad mouthed a wood harvester because the stumpage he paid was less than some other person got, and the lot looks worse than the other guys. But does anybody know what the goals of each land owner were? Or what the stand condition was to begin with? You've been contracting for 35 years, I'm preaching to the choir - for sure. Anyways, look at this awesome thread and all the responses.  I take every response, including yours, with great respect and value! Cheers.

[Stephen1]

My sawmill and truck are 130k so I charge $130 hr, minimum 4hrs plus travel both ways. Same as what is said above about cost of the machine, I had heard on here years ago that ever $1,000 worth of machine is $1hr and that is how I have always rolled. No sense in working if your not making money.

So a new off the lot Scorpion King can fetch CAD$900/hr? (Purchase price of CAD$900,000). If you assume it depreciates 33% of its value when you drive it off the lot that's still CAD$600/hr when it's new. That's 3-4x what it's actually worth per hour.

Blue Nose , that is how I price and as some others point out it is how they price also. I am not sure  about the $900,000 piece of machinery, but my question...... how you can afford to run a machine like that and make money? If you only charge $200?

[Tom K]

Stephen - I get what your saying, but I don't think purchase price has much to do with what you should charge. If I only paid $15k for my skid steer, does that mean I should only charge $15 an hour for it because that's 1% of value? I'm going to charge the going rate for a machine of the same size and capability. The same machine new may cost $60k, but if mine can do the same work why would I charge any less?

The truck used to pull it to the job also doesn't seem to be relevant in hourly change in my opinion either. If I pull it to the site with a $100k King Ranch, or a $5k beater it shouldn't magically change the value from $20/hr to $115/hr. The value is what I produce, not how I get to the site. If I need a dozer or UNIMOG to access the site that should be a separate mobilization charge, not part of an hourly rate. Should a logger that runs a brand new $150k truck and $75k trailer add $225/hr to his log skidder hourly wage because that's what he hauled it to the job with? That's not going to work.

Now purchase price and replacement cost do absolutely need to be figured into operating cost, but that's not what operating cost should be based on. Basing charges on equipment purchase price only is just a WAG and would have little impact on actual profitability.

[Stephen1]

Stephen - I get what your saying, but I don't think purchase price has much to do with what you should charge. If I only paid $15k for my skid steer, does that mean I should only charge $15 an hour for it because that's 1% of value? I'm going to charge the going rate for a machine of the same size and capability. The same machine new may cost $60k, but if mine can do the same work why would I charge any less?

The truck used to pull it to the job also doesn't seem to be relevant in hourly change in my opinion either. If I pull it to the site with a $100k King Ranch, or a $5k beater it shouldn't magically change the value from $20/hr to $115/hr. The value is what I produce, not how I get to the site. If I need a dozer or UNIMOG to access the site that should be a separate mobilization charge, not part of an hourly rate. Should a logger that runs a brand new $150k truck and $75k trailer add $225/hr to his log skidder hourly wage because that's what he hauled it to the job with? That's not going to work.

Now purchase price and replacement cost do absolutely need to be figured into operating cost, but that's not what operating cost should be based on. Basing charges on equipment purchase price only is just a WAG and would have little impact on actual profitability.

Tom, I understand where your coming from. I never made any money portable until I followed this guideline. Does it work everywhere, maybe not but it sure is a good guideline. I can not be portable without a truck, 5k truck or 100K truck but I still have to have the cost in my business plan. I will tell you this though, if you run your business plan based on the 5k truck or the 5k sawmill of 5k skidded and you have to go buy new machinery, you are going to be loosing money and will quickly go out of business.
So I base my numbers on the new equipment. 
 A lot of sawmills do not depreciate a high rate.
The logger can pay someone to float his equipment into the site and so , does he need a truck and trailer? He does need to price his hourly rate so he can stay in business, IE: buy new equipment. Used or new, does not matter it still needs replacing at some point.
If you are going to loose money running your machines, I would rather Go Fishing or Golfing is my motto.

[Tom K]

if you run your business plan based on the 5k truck or the 5k sawmill of 5k skidded and you have to go buy new machinery, you are going to be loosing money and will quickly go out of business.

This is the main part I'm getting at, hourly rates should never be solely based on purchase cost whether high or low. They should always be based on true operation cost and local market conditions. Equipment cost do factor into operating cost, but are not strictly tied to profitability. Without doing the math to calculate operating costs the correlation to equipment value is more of a coincidence.

Playing this game with either cheap or expensive equipment will skew your calculations drastically one way or another, neither are based on profitability.

[Joe Hillmann]

Stephen - I get what your saying, but I don't think purchase price has much to do with what you should charge. If I only paid $15k for my skid steer, does that mean I should only charge $15 an hour for it because that's 1% of value? I'm going to charge the going rate for a machine of the same size and capability. The same machine new may cost $60k, but if mine can do the same work why would I charge any less?

The truck used to pull it to the job also doesn't seem to be relevant in hourly change in my opinion either. If I pull it to the site with a $100k King Ranch, or a $5k beater it shouldn't magically change the value from $20/hr to $115/hr. The value is what I produce, not how I get to the site. If I need a dozer or UNIMOG to access the site that should be a separate mobilization charge, not part of an hourly rate. Should a logger that runs a brand new $150k truck and $75k trailer add $225/hr to his log skidder hourly wage because that's what he hauled it to the job with? That's not going to work.

Now purchase price and replacement cost do absolutely need to be figured into operating cost, but that's not what operating cost should be based on. Basing charges on equipment purchase price only is just a WAG and would have little impact on actual profitability.

You shouldn't be charging only $15 an hour for it, you should be charging based on its replacement cost.  Because once yours dies it is going to have to be replaced.  If you aren't including replacement cost in your billing, once it is time to replace your machine you will have to downgrade instead of upgrade and it becomes a slow way to run yourself out of business.
It also depends on the service your customers are expecting.  In my experience, old worn out equipment cant work as many hours without maintenance or breakdowns as brand new equipment can.  Often old equipment is just as costly keep running (when you also include time lost) as the payment on brand new equipment.  So if your customer expects equipment that can run 10 hours a day for weeks on end they should expect to pay more for it than for equipment that runs two days, then has a three day break down, then runs a few hours and then a 1 day break down, and so on.