Mandates Raise Multiple Questions

Story by David Knight, Co-Publisher/Executive Editor, Timber Harvesting 2011

Recent log transportation changes implemented by Weyerhaeuser in Mississippi, Louisiana and eastern North Carolina have left some of the loggers involved very disgruntled. The changes raise ethical and legal questions and have gotten the attention of the American Loggers Council.

As I understand it, Weyerhaeuser initiated central dispatch trucking systems in these (and other) areas within the last 10 years, setting up agreements with third party trucking entities. Weyerhaeuser’s contract loggers and the loggers’ contract truckers could sell the trucks they already owned and relinquish trucking control to the centralized system, or they could continue to control their trucking with their own rigs and employees or continue parting it out to contract truckers. In June Weyerhaeuser made dispatch participation in these states mandatory, forcing contract loggers with trucks and contract truckers to either sell them or place the trucks, trailers and drivers under the control of Weyerhaeuser dispatchers. With times being what they are, what else could they do but come on board, albeit reluctantly?

So in these states there now exists mandated systems in which a logger or contract trucker owns trucks and trailers, hires drivers, pays all maintenance and insurance costs, and has no control over them.

No doubt Weyerhaeuser’s legal heads have thoroughly examined the upside/downside possibilities of this action, but isn’t the company openly gambling with the treasured “arm’s length” relationship it supposedly has with so-called independent contractors?

Danny Dructor, Executive Vice President of the American Loggers Council, weighed in on the situation: “It would seem that the independent contractor status is being dismantled when the contract loggers and truckers are being told that if they wish to haul production to Weyerhaeuser facilities, they must participate in the program. With contractors making the investment in trucks, being responsible for maintenance and upkeep on the trucks, and then hiring drivers to operate those same trucks, there is hardly an ‘independent’ relationship existing between Weyerhaeuser and the supplier. The Internal Revenue Service just might have a field day with this.”

Weyerhaeuser has not been very forthcoming in stating what its objectives are, but let’s assume one is a more efficient scheme that puts more loads through its mill wood yard gates with fewer trucks and trailers. Let’s assume the firm believes that with fewer rigs involved and with more control over trucking, the potential for accidents will diminish. But Weyerhaeuser’s action raises several legal and ethical questions besides the one concerning independent contractor status.

Certain tying arrangements are illegal under both the Sherman Antitrust Act and Section 3 of the Clayton Act. Can the tying together of contracts for logging (cut-skid-load), trucking, road building, etc., not be viewed as anti-competitive? Even if these different activities are listed in separate standalone contracts, how does it all actually play out in practice? Are opportunities and profit potential in one service side tied to another?

Would not other large and competing forest products companies view some of these practices as anti-competitive, even if they were not willing to get as close to the edge as big W? If such a trucking system is so grand, why is Weyerhaeuser the only forest products entity doing it?

Dispatch systems force a logger to project how many loads of different log classifications he expects to generate in a given day. Machine breakdowns, weather and unforeseen circumstances often upend such projections. Who’s liable for the assigned trucks that roll away empty? Suppose logger A’s truck goes to logger B’s job and the loader operator gets carried away. Suppose DOT stops the rig and issues the driver an overweight ticket. Further, when the driver gets the overweight load to the mill, Weyerhaeuser, through its overweight fine policy, penalizes the load again. Who’s responsible for the fines?

Finally, why do heavy-handed treatment and new initiatives seem to occur at the worst possible time for loggers? Has any logger wed to a large company ever been able to challenge and change a contract drawn up by the consuming company?

For years Weyerhaeuser, rightly or wrongly, has audited the performance of its logging contractors. Now in some locales it has total trucking control? Company lawyers know the latest development is a calculated risk, and they’re betting no one has the will or the war chest to challenge the company. Perhaps Weyerhaeuser’s next move will be to field its own logging force, leaving no room for questions and doubts. Hmmmm. Imagine that!