Analyzing the impact of implementing a logistics center for a complex forest network

Abstract

The challenges faced recently by the North American forest products industry have forced it to review many of its key operations. Implementing logistics centers for such a context may therefore help in allocating the wood fibre more efficiently and in reducing sorting and transportation costs. This paper aims to better understand the interaction between a forest logistics center and a complex forest network while exploring the business environment favoring the use of such a structure. A profit maximization model is proposed and applied to a real case in the Mauricie region in Quebec, Canada. A total of 18 groups of scenarios are tested, based on the use of a sort yard and of backhauling. Results show that a logistics center already in operation adds $0.52 in profits for each cubic metre of wood available for harvest (over 2 580 411 m 3 per year) for the network under study ($1.4 million annually). A sensitivity analysis also highlights that higher prices and sorting error rates have the greatest impact on the logistics center’s profitability.