Diesel price spike seen putting Maine logging industry in a jam

Maine’s all-important logging industry, now in its traditional “mud season” pause, may struggle to resume normal operations later this spring if diesel prices continue to climb. That’s the warning this week from Dana Doran, executive director of the Professional Logging Contractors of the Northeast, a nonprofit based in Augusta. Logging relies heavily on diesel — not only to run the heavy equipment used in the woods, but also to power the trucks that haul supplies, fuel and harvested logs, he noted. Over the past month, Maine's average diesel price has climbed 33%, to $5.82 per gallon, according to Friday's AAA figures. The national average is up 42% over the same period, at $5.53 per gallon on Friday. Prices are expected to keep rising amid supply-chain disruptions in the Strait of Hormuz during the conflict in the Middle East. “If this continues, it’s going to impede [logging] operations starting back up and will force some of that capacity to shut down,” Doran told Mainebiz. Noting that other factors may play a role, he added that "we're going to see how long this plays out in May and June. It depends on equipment and where folks operate.” 'High-volume cash business' Looking back at 2022 and 2023, when diesel and gas prices were also climbing, Doran recalls most mills offering a “fuel bonus” to help logging companies absorb the increases. This time, he's not sure that will happen  — leaving logging companies, many of which are small, family-owned operations, with great uncertainty. “This is a high-volume cash business,” Doran explained, with profit margins of only 1% or 2%, fueled by small companies that have to make payroll and keep employees on jobs no matter what the circumstances. “There’s really no workarounds," he said. “We’re not going back to the days of cross-cut saws and horses." In a worst case scenario, some companies may be forced to sell or shut down equipment if diesel price inflation becomes impossible for them to absorb, he said. Any losses would be a big hit to a strategic heritage industry. In 2024, Maine's logging and forest trucking industry supported 2,744 direct jobs and contributed $534 million to the state's economy, according to a report released by Doran's organization last month. The region-wide economic impact amounted to $1.3 billion.