Forest Energies is a vertically integrated timber company that buys standing timber in lump sum contracts and harvests and hauls the wood to market. They rely on Cat® equipment to deliver day in and day out in extreme conditions, and turn to their Cat dealer for on-the-ground support and expertise.
CEO Lenn Morris and President Ricky Freeman founded the business in 2012. At first they bought the timber and subcontracted the harvesting and hauling. However, the company quickly became an end-to-end supplier out of necessity when reliable harvesting and hauling sources were hard to find.
Forest Energies does business with about 22 regular customers, landowners and mills, mainly in north-central Alabama and a few in Mississippi. The company has 80-plus employees, including harvesting crews, trucking and mechanics, and timber buyers, and has multiple facilities. Forest Energies has the capacity to produce over 500,000 tons per year, and it projects getting close to that this year.
At the core of the business are detailed expense tracking, controls, and daily profitability forecasting. The profit and loss for each crew is calculated on a monthly basis.
With historical data on harvesting and hauling costs, the company can project profitability with a high degree of accuracy before it buys a tract. “We know how many tons per acre a tract will produce, how many loads we can do in a week, what the labor, fuel, insurance and hauling costs will be. And we know what our return on investment needs to be, so we know what we’ve got to get to make it work,” Morris says.
Cat Equipment Delivers Day in and Day Out
Forest Energies relies on Caterpillar in more ways than one. It has a fleet of Cat logging equipment. The Cat lineup includes three 573C Wheel Feller Bunchers, one 522B Track Feller Buncher, five 535C Skidders, five 559C Knuckleboom Loaders and one 320D Forest Machine. It ran one of the pilot Cat D Series Wheel Skidders and then ordered two 535Ds. Caterpillar Financial Services Corp. provided financing.
“Cat equipment helps us out in many ways,” says Freeman. “We operate our equipment in some extreme conditions, and they deliver day in and day out. It is one thing to be able to produce, but the equipment also needs to be able to produce on a cost basis as well. Our Cat machines have done a good job producing at a cost per ton rate in line with what was advertised before buying our fleet.”
Relationship with Cat Dealer Key to Their Business
Morris describes the company’s relationship with Caterpillar and Cat Dealer Thompson Tractor, headquartered in Birmingham, as a “partnership” that’s key to their business. “It really is about the support after the sale because there’s no bad equipment out there anymore. The more communication there is, the fewer problems there are for everybody.”
“The product support guys are on our job sites about every two weeks,” adds Freeman, “and we have a weekly conference call with Thompson to go over the status of every machine.”
Caterpillar Solution for Extreme Jobsite
Forest Energies called on Caterpillar to help when it was looking at a tract in northern Alabama that other loggers had passed on because of the terrain—33-degree slope on average and as steep as 45 degrees in some areas. Thompson and Caterpillar engineers worked with Forest Energies to find the best solution. They provided detailed simulations and cycle time comparisons that showed higher production and lower cost per ton could be achieved with a Cat 522B Track Feller Buncher with a HF201B Harvesting Head and adding two Wheel Skidders. “They brought the 522B out here and ran it for two weeks themselves to demonstrate how it’s going to produce,” Freeman recalls.
Morris adds, “Their boots on the ground and their expertise have helped us understand how to better use our machines to get more productivity.” For example, optimizing skid trails and training the skidder operators on pulling in the correct gear, depending on the load, reduced fuel consumption up to 7 percent. The Caterpillar team also taught loader operators to use the economy mode, which also significantly reduced fuel consumption. The company also uses Cat Product Link™, Caterpillar’s telematics system, and VisionLink®, its user interface.
The principals see continued growth in the near to mid-term, expanding harvesting operations into southern Alabama, Tennessee and possibly Georgia.
“We’re going to continue to be a true supply chain partner to our clients,” says Morris. “You will also see us expand deeper into the forestry industry. We’re going to expand our business with the same ethics, integrity and safety, taking care of our people and the environment and doing it the Forest Energies way.”