On Pier 3, a small workforce with Astoria Forest Products is beginning to process logs for the next ship coming in May. The ship will be the first since the log export business at the Port of Astoria has gone fallow amid a trade war between the U.S. and China.
The Port, whose largest single source of revenue comes from exporting logs, recently agreed to defer several months of Astoria Forest Products’ rent as the exporter waits for Chinese business to pick back up.
The company pays the Port about $10,800 a month for more than 10 acres it leases on Pier 3 to process and store logs. The Port deferred the rent for January and February for six months, until July and August, when the company will pay $21,600 for the two months to catch up. Half of the rent between March and June would also be deferred until October through December.
The deferment does not affect Astoria Forest Products’ lease on Pier 1, where it exports logs.
“The Chinese tariffs have hit us hard,” said Matt McGrath, the Port’s operations manager. “We have not had a log ship in here in about five months. Obviously, they’re hitting Astoria Forest Products hard as well.”
Astoria Forest Products loaded its last log ship shortly before Thanksgiving and got it to China two days before new tariffs were set to take effect in December, Chad Niedermeyer, a local yard manager for the company, told the Port Commission on Tuesday.
The company announced that it has gone from 10 to two full-time employees during the slowdown.
Chris Connaway, president of the International Longshore and Warehouse Union Local 50, the workforce used to load log ships at the Port, said his members have had to travel around the region in search of jobs, with younger workers particularly affected.
The local longshore union has 23 members and employs upward of 38 overall, including regional longshoremen, when loading log ships, he said.
“The last three days, we’ve been allocated to Vancouver working a steel ship,” Connaway said. “Without work at home, you have to kind of manufacture it. You’ve got to go to Portland, Coos Bay, various places where you’re hoping they’ll have extra jobs and you can pick one up.”
Tariffs started hitting the timber industry in July, with 25 percent charges on species such as southern yellow pine, Niedermeyer said.
“The speculation (on) the reason they did that is because southern yellow pine is a hotbed of the Republican Party,” he said. “They figured that would help the Republicans sit up and take notice if they hit the southern yellow pine belt first.”
The tariffs began affecting Astoria Forest Products in September when the Chinese placed a retaliatory tariff of 5 percent on Douglas fir and hemlock, and 10 percent on spruce and grand fir, Niedermeyer said. Fir and hemlock are staples of the local timber industry.
“The Chinese do not pick up any of the tariffs,” he said. “The reason for this is they want our logs, but they don’t need our logs. There are enough other supplies around the world that they can get what they need from elsewhere.”
To save a fraction of its export business, Astoria Forest Products signed an agreement to barge logs from Astoria to Southport Lumber Co. near Coos Bay. Southport has a contract with Oregon for about 3 million board feet of timber over the next year, and with private buyers will likely acquire 5 to 8 million board feet, Niedermeyer said.
The Port will host its first log ship of the year in early May. Astoria Forest Products is hopeful that its business will return to normal with President Donald Trump and Chinese President Xi Jinping nearing a trade deal, Niedermeyer said. Niedermeyer also meets this week with potential log buyers from South Korea.
Port Commissioner Dirk Rohne, noting the cyclical nature of the log market, asked Niedermeyer about the future plans of the company, which leases Pier 3 until 2020 with two more five-year extension options.
The company is looking to extend its lease but renegotiate to provide a possible rent reduction in exchange for moving a higher volume of logs, creating more revenue for the Port through wharfage and more work for local longshoremen, Niedermeyer said.
“A lot of my competitors, that’s how they have a lot of their things structured with the ports they’re dealing with, and it’s worked out pretty well,” he said.