Lacking practical rail transpoil, mills go to sea to get their lumber to market

lltHAT do you do when there is UU no train coming down the tracks? Eureka, Ca., and other North Coast towns faced that question last fall when the Northwestern Pacific railroad ceased to function. The story of how two lumber mills in the area responded is interesting.

"Due to the inconsistency in modes of transportation, in particularly, the loss of the Northwestem Pacific railroad," Jim Hunter of Schmidbauer Lumber, Inc., Eureka, explains, "we decided in October, 1983, to experiment with barging lumber to Southern California destinations."

Management at Schmidbauer Lumber, Inc. and Sierra Pacific, headquarted in Redding, got together with representatives of Eureka Forest Products, a storage and dock han- dling operation in Eureka, and Sause Bros. Ocean Towing Co., Inc., of Coos Bay, Or., to plot the strategy of barging lumber to Southern California destinations. The first barge shipment was booked for early November.

Since that time the two mills have continued to cooperate in filling one barge per month. They currently split the approximate footage of 3,300 MBF per month. The bulk of all shipments so far has been delivered to National City, Ca., although one portion ofone barge went to Long Beach, Ca.

According to Hunter, "Without rail service, our mill was placed in a distinct competitive disadvantage to sawmills in Oregon and Washington with rail loadings. Losing the ability to ship by rail put undue pressure on the number of trucks necessary to meet the demands on outgoing freight.

"The biggest problem to bear was the prohibitive cost factor of truck rates over rail which virtually eliminated our position of selling products into Los Angeles and Phoenix, Az., areas, our largest consumer areas."

Although they started with a try and see attitude, both mills feel that the relative value of this experiment has been the ability to move products into Southern California at a competitive rate with an efficient and reliable mode of transportation. The drawback for Schmidbauer has been tylng up a block of inventory for a longer length of time and putting sales emphasis on a smaller customer base, according to Hunter.

By booking the quantity of lumber necessary to fill their position on the barge anywhere from l0 days to two weeks earlier than shipment, they have been unable to sell smaller quantities on a quicker schedule.

"We also have had to become more selective as to a customer base that can handle that amount of inventory without backing up the pipeline," Hunter adds.

Story at a Glance

California's North Coast mills respond to railroad's closure .ocean-going barges used to transport lumber. mills re. main competitive as costs are below trucking. program still experimental.

Sierra Pacific Industries has experienced some of the same changes to accommodate to barging. SPI's Paul Trueb reports that the mill really likes it better and finds it easier to do one large order although they have had to reschedule inventory.

Both companies have found that the main changes brought about by shipping on water were in package sizes and strapping requirements. The actual travel time for the lumber is three days.

By working together with the package, the two mills were able to arrive at a competitive rate for transporting their lumber into Southern California. The costs are only slightly higher than rail, but much lower than truck.

From the viewpoint of the mills the experiment is ongoing. Hunter feels that it has been too short of a time period to guarantee its advantages and effectiveness as opposed to its drawbacks.

He says "It has been a means of selling our lumber into an area that has consumed more wood than other areas in the past. At present we are competitive, but only time will tell whether it will remain economically feasible to continue to sell and ship in such a manner.

"Any increase in costs of any of the factors would necessitate a new look and a sharper pencil," he concludes.

From the viewpoint of the barging company, John Sweet, manager of marketing at Sause Bros., says "We feel that barging does have a role in the transportation system out of Eureka. We do not purport to be the entire answer to the void created by the termination of rail service, but we do believe that we fill a role, particularly in the shipment of lumber into Southern California. "

Theoretically, the Northwestern Pacific Railroad as of last February resumed operation between Eureka and Willits under a court order. In reality, a $1200 surcharge per car on both inbound and outbound freight means there is no business on the line.

According to Al Bradshaw in the public relations office of the parent company, Southern Pacific Transportation Co., San Francisco, Ca., the company is trlng to recoup the several million dollars spent to repair storm damage on the line. The surcharge has been in effect since July of 1983. At this time a petition to abandon the line is pending.

Despite transportation hardships, lumber continues to flow out of Eureka because there are lumbermen and transportation men willing to adapt and adopt new ideas.