In many cases, land clearing and right-of-way (ROW) work is done by companies that specialize in these niche areas. However, there are many general tree care companies that also handle these jobs, along with providing services to residential and other commercial customers. We talked to a few such tree care professionals to find out what trends and developments they’re seeing in the land clearing and ROW segments of the industry.
“We’ve seen a rather significant decrease in private development clearing,” says Phillip Cambo, president of Northern Tree Service based in Massachusetts. Building of residential homes, as well as commercial development, has slowed dramatically in that area, he notes. Cambo attributes the slowdown to the economy, as well as the fact that the region recently went though a commercial high-tech building boom that seems complete for the moment. “Building of box stores has also slowed down drastically,” he adds.
Right-of-way work has been a brighter spot, says Cambo. “We have seen an increase in the energy sector. They have always had [vegetation management] programs, but the amount of work has increased,” he explains, specifically citing both gas and electric transmission lines.
There have been a few changes in the ROW work his company is being hired to perform, as well. “Some utilities are out to reclaim the full width of their right-of-way,” Cambo observes. “Where the sidelines have crept in during past maintenance cycles, they’re going back and establishing their full widths. In some cases with electric there have been problems during storms in places where they had been trying to appease abutters and might have left some material that threatened the lines or actually caused an outage.” Reclaiming the entire ROW seems to be the norm now, he notes.
Another trend is toward environmental sensitivity. “We’ve had to adjust to comply with environmental requirements, including with our equipment,” Cambo explains. “For example, we’ve had to add more machinery that can transport and place the mats we use to access and do the clearing. In the past, a lot of the easements that utilities held would allow, under certain conditions, access through wetlands. But a lot of that has been changed and matting is required to protect the wetlands.” Regulatory agencies have become increasingly concerned about the environmental impact in recent years, he notes.
Cambo says one of the biggest challenges to clearing and ROW work in recent years has been finding outlets for the massive amounts of material these jobs produce. Wood waste power stations in the region have been delayed by the permitting process, and it has become more and more difficult to find places to take the wood chips produced during clearing jobs. He says, “There are projects that would give us a local outlet for this material that have been trying to get permitted for seven years now, but there’s always opposition. It’s discouraging because we’re traveling to Canada or northern Maine to get rid of our wood chips. It just doesn’t make sense to send this material on long trips.” Where allowed, Northern Tree crews will leave the chips on-site, “but the jobs are getting fewer and farther between where they allow that,” adds Cambo.
Randy Owen, owner of Owen Tree Service in Michigan says the economic downturn had a huge impact on companies that specialized only in land clearing. “There was zero activity around here. It forced some companies, some very good companies, out of business,” he says. “They weren’t diversified enough to do other types of work, and they had to compete with competitors who were just trying to keep their guys working.”
The obvious result was lower prices for everyone working in land clearing and ROW work. “The downturn made everyone aware that they really had to sharpen their pencils,” states Owen. However, customers who selected bids based only on the bottom line price were often disappointed. “They got a lot of poor service and poor performance, because the good companies couldn’t lower their prices that much,” he adds.
Fortunately, Owen says he now sees the trend going in the other direction. “We’re starting to see more work coming back, and we’re seeing customers who had to deal with lower quality work now be more aware and quite a bit more selective in who they hire,” he explains. “We’ve won a lot more jobs this year, and I’m not sure why. But I think it might be because we’re doing a little bit better job.”
Land clearing is viewed by some as work that doesn’t require the skill or precision of, say, a climber pruning a prized tree in a residential yard. However, Owen says that developers’ experiences with poor-performing companies has shown them that it does take skill and the right approach to handle land clearing jobs effectively. “There’s a big difference in the equipment people use and the quality of the final product,” he explains. “Typically, the land clearing is a minor part of a big commercial development job, and all of the other stuff is much more expensive. But if the clearing and tree cutting is delayed and causes problems for the project, all of a sudden the cost becomes much higher.”
Owen Tree Service handles only smaller land clearing jobs. “We would not be effective on real large projects,” notes Owen. “The bigger the land clearing, the more mechanical it becomes — fewer men but more [and] bigger equipment. We’re more effective on smaller, more challenging jobs on difficult sites.”
Accordingly, the company uses slightly smaller machinery that’s suited for the size of the jobs it takes on. For example, they use tracked Mustang (Takeuchi) skid steers. “They’re expensive, but very heavy duty,” notes Owen. “We’re putting a little bit lighter footprint on the ground, which helps prevent ground degradation and compaction.” He notes that this is especially important on some ROW clearing jobs. “We’ve always used them, but I’m seeing more and more companies using similar equipment now – that’s definitely a trend. There’s less ground impact than when you use big wheeled machines.”
Owen says that his company’s ROW clearing work has been more consistent, even during the slow economy. He notes that the power grid is a critical component of Homeland Security, and regulations designed to prevent a power grid failure might be compelling some utility companies to do more ROW work. “I think there may be a little bit more accountability required,” says Owen. He feels that might be driving more early management of right-of-ways. “But, generally, the companies we work for are pretty consistent in their management plans,” Owen adds.
At Gab’s Tree Service in Texas, owner Gabriele Escalante says his ROW work has also remained pretty consistent. “Even when the economy really slowed down four or five years ago, things have kept going pretty well for us,” he notes. The only thing that has slowed his crews has been severe weather, which seems to be an ever-increasing occurrence. Given difficulty accessing some of the pipeline sites his crews work on, significant rains can really shut the job down. “One change we’ve made in the last few years is that every truck we buy today is four-wheel drive,” says Escalante. “It’s more expensive, but we need to do that to make sure we can get where we need to be.”
Gab’s Tree Service crews use New Holland tractors equipped with heavy-duty mowers for the majority of its ROW jobs. “Every year or two we trade them in and get new ones,” says Escalante, calling them essential machines for the challenging work.
Josh Korte, owner of Korte Tree Care, which operates in two locations in Missouri, has land clearing on the list of services he offers, but says it’s something he rarely takes on anymore. “I’ll do it, but it’s become a low-margin business,” he explains. “And, really, to be competitive, you need a horizontal grinder to get rid of the root-balls. In this economy, I just don’t want to buy one.”
Korte says that a new horizontal grinder might cost $750,000, more than all of his other tree care machinery combined. “And I have two of everything, and a sky lift,” he notes.
He observes that, locally, the land clearing business has become more competitive, with a growing number of specialized companies covering the area. With the increased competition and payments to make on expensive machinery, some are bidding just the cost of the job with little or no profit, says Korte. “They’ll take on jobs just to keep people busy,” he says. Along with more companies willing to do the work, there’s been less land clearing work to go around as the economy has slowed development, Korte adds.
At the same time, demand for mulch — and the price that can be charged for it — has dropped. “At least in central Missouri, the price has just collapsed. It used to go for $35 a yard, now it’s going for $15 a yard. Sometimes people can’t even get rid of it,” says Korte, adding that this makes land clearing even less profitable and appealing for him. “There’s some people making money on it, but not as much as they used to,” he states.