Re: Pacific Northwest Lumber Traffic


Greg Martin
 

Mark Hemphill writes: 

"It would have to be some very special lumber to compete on cost including transportation, for PGE-originated lumber in distant markets.  It would not be a framing grade of Western Hemlock or Douglas-fir or some Spruce-Pine-Fir grade unless the mill was just giving it away; the rail transportation costs in the Steam Era made it rare to be able to rail lumber from the PNW beyond Chicago and compete effectively with Southern Yellow Pine.  And in the 1930s, Weyerhaeuser developed its own giant lumber warehouse, distribution, planing, and millwork centers in Baltimore and Newark using its own coast-wise shipping line that avoided the whole cost-of-rail problem completely, competing effectively with all-rail Southern Yellow Pine from the Southeast. See this for a capsule history: http://www.wsl.com/WestwoodShipping_History.aspx  So yes, you could find a lot of Douglas-fir being used in the Northeast in construction, but it didn't get there very often by rail."

 

"It would possibly be some fancy grade quarter-sawn clear Douglas-fir veneer or long boards. But there was plenty of that lumber in Washington and Oregon, so a carload from B.C. would have to leapfrog over them. (To add some detail to what Dave Nelson said earlier, a lot of lumber moved via coast-wise shipping from every port in Oregon, Washington and northern California to every port from San Francisco southward at lower-than-rail cost. After WWII, the whole cost-of-ocean shipping equation was upended, and the coast-wise lumber business declined rapidly.  There's an excellent history of this in The Rise and Decline of U.S. Merchant Shipping in the 20th Century, Rene De La Pedraja http ://www.amazon.com/Merchant-Shipping-Twentieth-Evolution-Business/dp/0805798269)"

  

"However, there are some unusual species/grades that do come out of BC, for special applications.  Yellow Cedar, for instance, virtually only comes from B.C.'s coastal range in commercial quantities in large, clear, book-matched veneer. I saw a carload of that in the mid-1980s for paneling for a university recital hall. It went all the way to Philadelphia to a specialty paneling and door manufacturer.  Then all the way back to Alaska, in containers, for a University of Alaska recital hall.  Kind of expensive, but it was really pretty."

"How do we know the PGE car we see at a distant location was loaded on PGE? &nb sp;I have plenty of examples from my own career where we have borrowed foreign cars, loaded them on our line, and sent them in the wrong direction away from the owning road. We've done this by calling the owning road and horse-trading with them, or sometimes we just ignored the car-service rules and ignored the fine that might result because we were desperate for empties, and sometimes just in error because a trainmaster or conductor wasn't paying attention and just grabbed the nearest empty car."

I've also seen lumber brokers get the market wrong and redirect a car they thought would, say, find a market in Denver to a market in Pittsburgh.  And take a huge bath on it. They don't do that very often and stay in business, though.  That could also explain an unusual car that is a long, long, away from home. 

Almost anything in railroading is done once.  

Mark Hemphill"
 
My only comment to Mark's message would be that the lumber futures on the Chicago Mercantile was based on FOB mill price plus Chicago rail freight regardless of specie. 
 
The vast majority of lumber on the west coast was shipped over Chicago to the markets on the eastern seaboard.  Some species like Southern Yellow Pine and Eastern Green Spruce had reputation issues that took years to overcome for framing lumber. Remember to find a mill that cut lumber longer than twenty feet (in the scope of this list) you had to come to the west coast.
 
Specialty species like Alaskan Yellow Cedar or Coastal BC Yellow Cedar were much like that of Redwood and Port Oford Cedar and were just that expensive and specialty. To see them used in the east was to find them in the finest institutions and businesses.
 
Barge freight to the east coast was an option if you didn't mind paying for an item (ADI ADF) you wouldn't mind seeing for two months. That tied up a lot of capitol and inventory for sometime, but it was and still is done. Missed markets with this kind of inventory could ruin your P&L for the quarter.
 
Just remember as one of the early founders of the Forest City Companies told me, "if there was no market we would often roll cars on Monday and create a market by Friday."  Speculation was all part of the game and as they will tell you. "your first loss is your best loss..."  Hopefully that doesn't happen often at all.
 
Rail cars of lumber over the Rockies and the great plains is a pleasant site. Many of the cars traveled on slow freights that allowed the consignees to get off their position in route to Chicago.
 
Greg Martin  

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