A study on reducing primary transport costs in the South African timber industry.

Abstract

Harvesting and transport accounts for up to 70% of the total production cost of roundwood in South Africa. This invokes an interest to improve harvesting systems through the introduction of improved equipment, road networks and more refined operating techniques. A literature review was conducted which investigated the various harvesting systems and equipment with a focus on ground based extraction, as it accounts for 96% of the timber being extracted annually in South Africa. A review of forest roads in South Africa was also conducted and it was concluded that at present there has been little focus on the upgrading and maintenance of forest road networks. It was concluded that the most significant reduction in transport costs would be achieved by reducing the distances travelled by expensive extended pnmary transport (R5.83 t-1.km-1) and by allowing less expensive secondary terminal transport (R0.4 t-1.km-1) to move further into the plantations. This could only be achieved by investing large amounts of capital into the upgrading of forest roads to a standard suitable to service secondary transport vehicles. A model was developed which was able to determine the tonnage of timber needed to flow over a particular road that will warrant the upgrading cost. The model was applied to two study areas, the first study yielded no results due to the already dense network of B- class roads, possibly excessive. The second study area identified three possible road upgrades to improve the existing transport system. A full costing of the existing and modified transport system was completed and a significant cost saving was shown, not accounting for the road upgrading cost. Capital budgets were used to account for more complex parameters, such as tax and discount rates, previously excluded from the simple model. These were used to determine the economic viability of the upgrades and to evaluate the suitability of the model. The model proved to be successful and confirmed that forest roads can be optimised accompanied by significant cost savings. The model is generic and simple allowing for easy application to a variety of situations and is also flexible to modifications.