Unfair GapsπŸ‡¦πŸ‡Ί Australia

Forestry and Logging Business Guide

33Documented Cases
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All 33 Documented Cases

Inaccurate Stumpage Valuation Losses

AUD 20,000 - 100,000 per harvest (2-10% of net stumpage, e.g., AUD 1.1M net from 50ha radiata pine clear-fell)

Timber cruising involves sampling to estimate volume, which introduces errors affecting stumpage price calculations. Poor estimates result in selling timber below fair market value, especially when market supply/demand shifts or tract-specific factors like accessibility are overlooked.

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Work Health and Safety (WHS) Incident Reporting Non-Compliance

LOGIC estimate: AUD 10,000–50,000 per audit failure; AUD 2,000–15,000 per non-compliance notice; workers' compensation claim disputes (10–30% of claims delayed/denied due to incomplete incident records)

Forestry operators in NSW and Australia must comply with mandatory WHS incident reporting, site safety plans (consulted with workers), hazardous tree identification protocols, and contractor/haulage induction records. Non-compliance results in SafeWork audits, corrective action orders, license revocations, and compensation claim denials.

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Payment Verification Delays & Log Measurement Disputes

Estimated 14–45 day payment delay per harvest cycle. For AUD $500,000 harvest contract, this represents AUD $19,000–$55,000 in working capital drag (assuming 10% annual cost of capital)

Contracts specify that payment follows verified harvest volume, communicated via cutter dockets 'at least weekly and preferably daily'[1]. However, manual docket collection, cross-verification between contractor and purchaser records, and disputes over log grading/volume create friction. Pay-as-cut arrangements require cash advances to contractors but delayed measurement reporting increases settlement time and ties up working capital.

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Idle Equipment and Overtime from Scheduling Bottlenecks

AUD 2,000-5,000/week in idle equipment costs; 10-20 hours overtime per bottleneck event

Bottlenecks in mill delivery scheduling result in underutilized equipment (e.g., unloaders, scalers) and excess labor costs during catch-up periods.

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