Lumbering Logistics Grows

Most pulp and paper producers have built up significant in-house logistics operations alongside their core business, reflecting the specialized nature of forest products transportation.

SCA Transforest, for example, operates a pan-European network of terminals offering stevedoring, warehousing, forwarding, customs clearance, agency and other related services for its parent SCA and competitors. Its Interforest Terminal Rotterdam unit generates around 40 percent of its traffic from third parties.

SCA Transforest also runs a large shipping business with a specially designed fleet of roll-on, roll-off ships and chartered-in tonnage.

Shipowners and forest products producers tend to stick together through good and bad times. Thus, Danish shipping line DFDS and Norway’s Norske Skog recently extended and expanded their six-year paper logistics partnership for sea transportation of paper product from Norske’s mills in Norway to the U.K., continental Europe, Ireland and Spain through the end of 2012.

Cargo terminals also have close relations with paper producers. Euroports acquired two Finnish stevedores from UMP-Kymmene, the world’s largest magazine paper producer, for approximately $128 million and also secured a long-term contract guaranteeing a minimum cargo throughput that amounts to more than 50 percent of their total combined traffic. Euroports’ acquisition of 50 percent of ICS Logistics, a U.S. port operator that handles UMP-Kymmene imports at a Jacksonville, Fla., terminal, further cemented the relationship.

Clever logistics also explains why SCA can make money exporting timber from Sweden to North America, the world’s largest producer of sawn solid wood products. Since February, a 6,000-deadweight-ton Dutch-flag ship has been loading planed solid wood products from a quay at SCA’s sawmill in the small port of Rundivk every month, sailing south to another Swedish port to pick up pulp from an SCA mill and then proceeding directly to the company’s Philadelphia terminal.

The solid spruce wood is then shipped via seven SCA distribution centers in the east and central U.S. straight to the shelves of Home Depot stores. SCA started supplying Home Depot 10 years ago and now is the company’s biggest source of sawn wood, justifying the launch of a direct service across the Atlantic.

Direct sailings cut both transport costs and handling, which reduces the risk of damage and protects the quality of the wood.

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Issued by:  BreakBulk

Author: Bruce Barnard

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Issue date: October 13, 2009

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