Commissioner: Log shipping slump erodes Port of Port Angeles revenue; 40 percent to 60 percent decline expected at terminal

By James Casey, April 9, 2015, Peninsula Daily News

The Port of Port Angeles faces dwindling revenue from its log shipping terminal even as it encounters environmental challenges on the harborfront, a port commissioner said Tuesday.


Not only is China buying fewer raw logs, Port Commissioner Colleen McAleer said, but more of them are being sold to Asian nations by Canada, whose oil-fueled economy has been hurt by falling prices for crude and which is trying to fill the deficit with timber sales.


Log shipments account for 35 percent of the port’s revenue, she said — $3.8 million — and the port anticipates reductions of 40 percent to 60 percent.


Projections put its operating expenses at $9.4 million but its operating revenue at only $9 million.


Shoring up the port’s finances presents a challenge, McAleer told the weekly meeting of the Port Angeles Business Association in Joshua’s Restaurant, 113 DelGuzzi Drive.


Opportunities to do so, she said, include:


■   Developing the former Kply/Peninsula Plywood mill site on Marine Drive for marine trades.


■   Restarting scheduled air passenger service from William R. Fairchild International Airport to Seattle-Tacoma International Airport.


■   Developing the Composites Recycling Technology Center at the Port Angeles airport.


■   Possibly relinquishing some of the port’s eight business lines that include Sekiu Airport and two marinas — one in Port Angeles and one near Sequim.


As for the harborfront cleanup, it will start with the KPly/PenPly site, about which the state Department of Ecology will hold an open house today.


The port is paying upfront for the $4.5 million cleanup while hoping to recover some of the costs by suing insurers and receiving grants.


Meanwhile, the effort to see passenger airline service resumed in Port Angeles was advanced when the Port of Seattle waived landing fees for two years at Sea-Tac for new air service, McAleer said.


A marketing study also is underway to attract a passenger air carrier.


Kenmore Air stopped passenger air service in November.


Port Airlines of Portland, Ore., has expressed an interest, it was announced last month. Market data was to be supplied to such other carriers as Alaska Airlines, Kenmore Air, Delta Air Lines and PenAir.


The Composites Recycling Technology Center will house Peninsula College classrooms and workshops if the federal government approves a $2 million grant and the port can match it with local money, including $1 million it seeks from Clallam County’s Opportunity Fund.


McAleer said she would like to see the port create 1,000 jobs in the next five years — not at the port but in private industry.


Key to that could be selling assets like some rental properties or Sekiu Airport.


“That will require a bit of a culture change to move the needle of our economy,” she said.


The port’s biggest asset is its harbor, McAleer said, worth $40 million.


“It’s a natural deepwater port, so we don’t have to pay for dredging very often,” she said.


The harborfront would be perfect for a shipbuilder or an industry that could assemble large items and put them aboard barges bound for Everett, where the Mount Baker Terminal at Mukilteo would transfer them to the BNSF Railway.


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