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Machine Rate Logging Cost Spreadsheet (6-18-02 beta version)
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 Contact: ipetaisto@fs.fed.us or 970-870-2164 for more info or questions
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PURPOSE:
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This Excel program was designed to quickly estimate logging costs by entering machine data (from Appendix B and other
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research studies) and production estimates (from contractors or contract administrators). A machine rate worksheet in Machine
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Rates for Selected Forest Harvesting Machines (Brinker, R.W., etal., 2002) was modified to calculate stump-to-truck costs
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for a complete logging operation with multiple machines.
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INTRODUCTION:
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Logging cost is basically the total costs (stump-to-truck) divided by total production for a given periof of time. In most logging
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operations, the major cost components are labor and equipment. A percentage for profit and risk and administrative costs
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may be added and haul costs are usually calculated seperately.
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Production
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Truck numbers and volumes can be tracked to determine a logger's average production: loads per time period, loads per unit,
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volume per load, logs per load, and volume by species. Since production is the denominator in logging cost (total cost$ / total
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volume or tons per time period), production values (average loads per day, average volume per load, maximum weight per load,
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volume by species, and average wood density or lbs./CF) need to be as accurate as possible. The denominator (production)
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obviously has a huge impact on the numerator (costs).
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Cost Components
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1) The labor component is the employer's payroll and normally includes wages and fringe benefits (workers' compensation
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insurance, State and federal unemployment tax, and social security tax). Although wage rates and benefits are usually
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assumed for a region, research may indicate that local rates are much higher or lower than the regional average.
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2) The equipment component is the other major cost component in logging cost analyses. Ownership and operating costs
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are usually calculated by the machine rate method. Ownership costs, also known as fixed costs, include: depreciation,
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insurance, interest, and taxes. Since fixed costs occur whether a machine is idle or operating, they are usually associated
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with "scheduled hours" per year. Operating costs, also known as variable costs, include: fuel, lubrication, oil, repair,
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maintenance, tire-track-wire-rope replacement, and other costs. Since operating costs vary in proportion to equipment use,
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they are usually based on "productive hours".
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A clear distinciton must be made between "scheduled" vs. "productive" time. Scheduled machine hours (SMH) are the hours
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per year (typically 250 days x 8 hours per day = 2000 SMH) that the machine is scheduled to perform productive work.
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Productive machine hours (PMH) are the hours of scheduled time when the machine is in actual operation. The relationship
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between productive time and scheduled time is expressed as a utilization percentage. For example, a feller-buncher may be
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scheduled for 2000 hours per year but due to operational delays (moving, repair, weather, fire, etc.), its productive time
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is estimated at 1200 hours per year. In this case, the machine's annual utilization rate is PMH/SMH or 1200/2000 = 60%.
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Assumptions
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Although the machine rate method is widely used, it may not match the actual site-specific cost due to many assumptions:
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 - machine life is an average by machine category (not for an individual machine)
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 - salvage value is a percent of initial purchase cost
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 - interest, insurance, and taxes are a percentage of average annual investmetn
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 - repair and maintenance is a percentage of depreciation
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 - scheduled hours is an average per year by machine category
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 - productive hours is an average per year by machine category
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NOTE: Machine life and purchase price have the most significant effect on a machine's hourly rates.