Photos
That journey is visible daily in Olympia. Drive down Plum Street and you’ll likely see several log trucks hauling some of the 1,200 loads it takes to fill a log ship at the port. It feels like boom times as the Port of Olympia exports roughly 100 million board feet of logs a year, volume that hasn’t been seen there in more than two decades.
Driving that activity has been Federal Way-based Weyerhaeuser’s decision to move its log-export operations here from Tacoma. The relationship with Weyerhaeuser has both boosted the port’s financial fortunes and increasingly connected the port’s marine terminal to ship traffic to and from Japan, as well as China and South Korea.
It wasn’t always like this. Only one log ship visited in all of 2008, and marine terminal revenue had slumped to $1.6 million, according to a recent state auditor’s report. After Weyerhaeuser’s five-year lease with the port took effect in 2007, log-ship traffic jumped tenfold. That lease is up for renewal at the end of 2012.
Weyerhaeuser is the largest log-yard tenant at the port, followed by Pacific Lumber and Shipping, a division of the Port Blakely Cos. of Seattle. Both have helped raise the profile of the port’s marine terminal.
Weyerhaeuser, in business since 1900, owns a million acres of timberlands in Washington and another million in Oregon. The company says it planted about 50 million seedlings worldwide in 2010 and annually harvests about 1.5 percent of its Western timberlands. Area tree farms include its Vail tree operations outside Rainier, as well as operations in Aberdeen and Pe Ell.
IN THE FOREST
Long before a tree becomes a log, it starts as a seedling at a nursery where it grows for two years before being transplanted to a tree farm such as Vail. A section of forest known as a stand is thinned about halfway through its 50-year average life cycle so the best trees can tap into more nutrients and sunlight to grow larger, Weyerhaeuser forester Mark Morris said. Once harvested, logs are loaded onto trucks and sent to port.
The company used to truck logs to the Port of Tacoma and ship them out from there. But in time, transporting logs from Rainier to Tacoma wasn’t viewed as cost-effective, said Brad Kitselman, director of marketing for the company’s Western timberlands. Rainier is about 40 miles from Tacoma’s port and about 18 miles from Olympia’s.
He said the shorter drive promised “significant savings,” but he wouldn’t disclose numbers.
Eleven log ships and 11 barges called on Olympia’s port in 2009; 22 log ships and seven barges visited the port in 2010; and 19 log ships have docked thus far in 2011. That includes the Global Wisdom, which loaded about 30,000 logs last week, or about 6 million board feet, then departed for Japan.
Marine terminal revenue grew to $2.6 million in 2010, according to the state auditor’s report, an increase of $1 million in two years.
The highest-quality logs tend to go to Japan, where they will be used for post-and-beam home construction, while logs bound for China and South Korea are used in different applications. In China, logs are milled to make concrete forms, while South Korea uses the logs for packaging, such as for pallets, crates and wire spools.
Of the 18 to 20 log ships that typically visit the Port of Olympia each year, about 25 percent are bound for China and South Korea, Weyerhaeuser Olympia log yard manager Jon Seifert said. The rest go to Japan. on the ship
The Global Wisdom loaded logs over four days last week. Weyerhaeuser employs 25 people at the port, and another 35 to 40 dockworkers typically load logs on each ship.
Ships leave during an incoming high tide, and a shipboard pilot, working with the ship captain, helps guide them to Elliott Bay in Seattle. Once there, the ship changes pilots, and the new pilot guides the ship to Port Angeles. Pilots aren’t allowed to work more than eight consecutive hours, so it takes two to bring a ship to Port Angeles, said Kelly Atkinson, a vessel agent with Talon Marine Services of Seattle.
The ship spends 16 to 17 days at sea and follows the curve of Alaska’s Aleutian Islands before turning south toward Japan, heading for ports in Kashima, near Tokyo, and Hiro, near Hiroshima.
That route is the fastest way to get to Japan, and the islands can be safe havens during a storm, Global Wisdom Capt. Michael Bidon said.
On its way to Olympia, the Global Wisdom cut its engines and drifted behind one of those islands as crew members waited for a storm to pass, he said.
Bidon, 36, has been a ship’s captain for nine months; he has spent 15 years in the shipping business, working his way up from deck hand, he said. He oversees a 21-person crew that includes mostly Filipinos and one Japanese engineer.
Ship crews tend to be Filipino, Chinese, Korean or Burmese, largely because the log ship owners are based in Asia, vessel agent Atkinson said. As vessel agent, Atkinson helps crews with doctor appointments and coordinates provisions. Once ships dock here, crews tend to head straight to the mall to shop.
“The crews feel safe and secure here, and the people are very warm and friendly,” Atkinson said. “They really enjoy calling on Olympia.”
IN JAPAN
Chugoku Mokuzai is Japan’s largest mill operator and Weyerhaeuser’s largest offshore customer. Chugoku’s Kashima plant, which opened in 2007 east of Tokyo, processes 200 million board feet a year.
Weyerhaeuser has been working with Chugoku since the early 1980s. Exports of larch, red pine and white spruce from the old Soviet Union had become too unreliable, so the company turned to Weyerhaeuser and its Douglas fir, which is popular for home-building because it’s stronger than other species and holds up well under the milling process. The company also processes domestic tree species unique to Japan, as well as products from Europe.
Kitselman, the Weyerhaeuser marketing official, said the housing market has flattened in Japan in recent years, but the country remains a steady customer. A typical home in Japan measures 1,400 to 1,500 square feet and costs $300,000 to $500,000. One hundred percent of each log is used by Chugoku, including by-products such as bark, which is used to fire kilns that steam-dry lumber, he said. Wood shavings and chips are used for pulp products. Although parts of Japan are recovering from the massive earthquake and tsunami that struck in March, the magnitude of the increase in business for Weyerhaeuser is unclear, Kitselman said.
Japan has to replace infrastructure, such as utilities, and the disaster struck a rural area with lower incomes, so they won’t be rebuilding right away, he said.
“We don’t expect a significant upward shift in business,” Kitselman said.
CHINA
In China, demand continues to grow. Russia used to be the country’s primary log provider, but after it raised log-export tariffs in 2008, China and other east Asian countries began to look elsewhere for logs, including New Zealand, Canada and the United States, Kitselman said.
Weyerhaeuser’s log sales to China made up 24 percent of its overall offshore log sales in the first quarter of 2011; that’s up from 6 percent in the first quarter of 2010. Overall, U.S. log exports to China from the Pacific Northwest increased 270 percent from 2009 to 2010.
Port Commissioner Bill McGregor said that in addition to bringing in cash, the resurgence of log exports has given dockworkers more working hours at the port. A Port of Olympia study has shown that at least 400 jobs are associated with the movement of cargo, including logs, into and out of the port.
OLYMPIA
Weyerhaeuser’s move to the Port of Olympia wasn’t always smooth.
As soon as the deal was announced in 2005, activists challenged the adequacy of the port’s environmental review for Weyerhaeuser’s operations. Numerous legal challenges followed, delaying the start of log exports until 2008.
“The port could have written 10 environmental impact statements rather than going through all they have,” activist Jerry Parker said at the time. “Compliance with the law is far cheaper than resistance.”
McGregor, who was not a member of the commission when the Weyerhaeuser lease was announced, said the port has become much more transparent with the public.
“The port staff is far more aware to make good records and respond to requests,” he said. “We keep track of that now.”
Activists continue to keep a watchful eye.
A group calling itself Olympians for Public Accountability recently sued the port, claiming violations of the federal Clean Water Act. Among its concerns was that the port “allowed wash water from the Weyerhaeuser log-export operation to mix with stormwater in violation of the port stormwater discharge permit issued by the state Department of Ecology.”
The port and the group reached a settlement in which the group agreed to drop its two legal cases. In return, the port has agreed to pay OPA attorney and consultant fees of $215,000 and spend $120,000 toward a $180,000 project to restore Mission Creek in lower Budd Inlet.
Meanwhile, log ships continue to call on the Port of Olympia. On Monday, the port expects the arrival of the Luzon Strait, a ship that will load about 5.8 million board feet of Weyerhaeuser logs, then deliver them to Lanshan, China, and Busan, South Korea. It will be the 20th ship to visit the port this year.
Rolf Boone: 360-754-5403
rboone@theolympian.com
www.theolympian.com/bizblog
