BY JACOB JONES
The Daily World
Towering gray columns of concrete rise in a massive row above the bustling waterfront. The silos dwarf the men and machines toiling and chugging below as the crews work to construct new stairways, chutes and steel frames to raise the columns even higher into the matching gray sky.
Cranes stretch alongside the silos, hoisting equipment up to the top. Crews level the ground around the base. Machinery fits metal beams into position.
Leonard Barnes, deputy director of the Port of Grays Harbor, gazed up at the 132-foot-tall concrete walls. After years of dwindling shipments and uncertainty, Barnes sees a new era of local exports stretching from those silos down a long steel railroad line past rows of cars, log stacks, biodiesel tanks and manufacturing facilities.
The Port spent years working to diversify its cargo base beyond logs and lumber. Once completely dependent on the timber industry, the Port has moved its eggs into a variety of new baskets.
"We hung in there and hung in there," he said. "We kept fighting the fight and look what's happened."
In the past few years, the Port has overseen a dramatic increase in agricultural exports, the first shipments of automobiles, new liquid storage efforts, expanded wood chip operations and many other shipping or manufacturing investments.
The increased variety of cargos and businesses has driven the Port to unprecedented growth as officials build infrastructure to handle the new shipping traffic. A sharp rise in vessel calls has brought in record revenue, which officials have used to make historic investments in the marine terminals and other waterfront facilities.
Port Commissioner Chuck Caldwell said the Port slid toward the brink of bankruptcy as the timber industry deflated, forcing officials in recent years to challenge how they had operated for a century.
"We had to make some changes," he said, "or we were going to die."
NEW LIFE AT THE DOCKS
An activity report released earlier this year shows export activity, measured in metric tons, increased 85 percent in 2010. That was up from 2009, which had also set recent records for activity and revenue.
Just five years ago, the Port handled 19 vessels and no barges in an entire year, Barnes said. In 2010, it handled 65 vessels and 41 barges.
"It's pretty awesome growth," Caldwell said. "I've seen all the ups and downs. ... AGP was a really big catch for all of us."
Ag Processing Inc., commonly called AGP, is a cooperative of hundreds of farmers scattered throughout the Midwest. Based in Nebraska, it processes, markets and ships soy and grain products all over the world.
The company maintains several processing facilities throughout the country as well as shipping facilities, biodiesel plants and other agricultural operations. While pursuing new markets, it sought a new West Coast hub for shipping.
Cal Meyer, AGP's group vice president of processing, refining and industrial products, said the Port brought together all of the considerations and infrastructure needed to create a new export facility.
"We had space up here to grow and they had the rail," he said, adding, "The chemistry between (the Port) and our team worked well."
In 2003, AGP launched operations at the Port of Grays Harbor with a new processing facility. The company unloads the agriculture products from rail cars and sends them out aboard ships to markets along the Pacific Rim.
Port Executive Director Gary Nelson said AGP came to the Port at an important turning point. The Port had struggled to pay for its operations and was looking for the anchor tenant that could form the cornerstone of a new philosophy -- getting companies to invest their own money and infrastructure on Grays Harbor, making them a stakeholder in the Port's success.
He admits they also had few alternatives for new revenue.
"We looked at each other and thought, 'If we don't do this what are we going to do?' " he said. "I think it's been the right thing to do. ... One thing this country does is grow food well."
AGP has since shipped millions of metric tons of soy and grain product out of the Port aboard dozens of ships. The Port expects the company to ship more than 600,000 metric tons this year.
"I think we have a very good proven track record," Meyer said. "We think that we're going to be positioned well for years to come."
While opening up new markets in Asia and the Middle East, AGP saw record shipments through the Port in the last two years. They kept ships coming in, which drove vessel calls, rail traffic, longshore jobs and Port revenue.
The rapid success has convinced AGP to invest in an ambitious expansion of its Terminal 2 shipping facility, paying more than $60 million to build the massive concrete silos now sitting near the Harbor. The company has already started work to add two more silos to the project.
"The momentum of the original success story has carried on," Meyer said.
Nelson explained the expansion allows AGP to store agriculture products at the Port, making them more flexible and efficient.
"They want to be able to be nimble and get product to a lot of different customers," he said.
The added capacity is expected to double the AGP ships coming into the Port. Officials said future shipping projections show AGP making up nearly 80 percent of the vessel traffic on Grays Harbor.
Nelson said the Port's future will largely hang on AGP's success, but he called it a "good risk." He said other emerging businesses will also continue to spread out that risk.
"I'm thankful that we have some alternatives to pick up the slack," he said. "(But) I look at (AGP) as kind of our anchor for the future."
Barnes said new marketing to China and other Asian countries show the potential to ship unprecedented amounts of soy and grain products overseas. The Port gets to be part of opening that market up to American farmers.
In the shadow of the silos, rest hundreds of parked cars from Pasha Automotive Services, which handles auto shipments in and out of the Harbor. Officials predict 37,000 automobiles to be shipped this year.
The recently restarted Imperium Grays Harbor biodiesel plants sit nearby, alongside the newly opened Westway Terminals liquid storage facility.
Cosmo Specialty Fibers sent its first load of pulp from the re-opened Cosmopolis mill out of the Port in July. Willis Enterprises recently moved its wood chip operations to the Port and South Korea-based Dkoram restarted log exports to Asia after nearly a decade.
And earlier this year, Rail America announced that it is considering Port facilities near Bowerman Basin for a coal shipping terminal, although that project is just in exploratory stages.
"It is getting tricky to work around all the construction," local Dkoram log exporter Roger Redifer said with a chuckle.
But the Port continues to recruit new industry to drive additional traffic and further expansion of operations at the marine terminals.
"There is still a lot more opportunity out there," Barnes said. "History tells us we're going to have ups and downs, but I think the future, long-term, for Grays Harbor is good."
Finance Director Mary Nelson said the Port made many difficult decisions in recent decades, laying off employees, selling equipment and adjusting fees. It tried to keep overhead low, but many maintenance costs could not be avoided if the terminals were to remain operational.
"There's a lot of fixed costs," she said. "We're going to dredge our berths whether we have a vessel or not."
The recent spike in shipping traffic has more than doubled the Port's revenue from $9 million in 2008 to $20.2 million last year, she reported. The revenue made most of the jump in between 2009 and 2010.
While the Port's fixed costs have increased slightly, she said revenue has risen dramatically, giving the Port much more financial flexibility.
Port officials and commissioners have aggressively put that money back into several Port projects to increase the capacity of the marine terminals to keep up with the greater numbers of vessels and larger shipments. They have started more projects earlier and worked proactively to partner with the state and private companies on larger expenses.
"When you have more volume it gives you much more control for managing those variable costs because those baseline costs have already been paid for," she explained. "That has been what has allowed us ... to do things like the engineering or the pre-planning on some of these infrastructure projects."
Gary Nelson said the Port has been in "the right place at the right time" to attract new partners as many other ports struggled to remain competitive. Grays Harbor put millions into upgrading dock facilities, security and other infrastructure.
"I think it's a result of the commissioners' dedication to improving our infrastructure for our tenants," he said, later adding, "You take care of things with your actions not your words. I think that's worked well with us."
WORK & RIPPLE EFFECTS
Among the first to notice the uptick in activity was the International Longshore & Warehouse Union Local 24. After years of declining membership and dwindling workshifts, the local is now adding to its rosters and moving more cargo than its members can handle alone.
Local secretary Billy Swor said union members have supported the Port's efforts to diversify cargo and recruit new businesses. Despite the wait, the work is starting to pay off.
"The growth has been long overdue, but greatly appreciated," he said. "We're both working at full cooperation. ... We see a lot of opportunities that fit well with this Port and this community."
The local had long stood at 32 members, Swor said, but the increase in work shifts allowed them to add 12 more members last year.
That's a huge increase for a local that had added just one new member in the past 30 years. And Swor said they expect to add more.
Swor said the Port staff and the local have worked to make the waterfront fast and flexible enough to meet a variety of needs. He said new companies appreciate the problem-solving attitude the Port and the workers bring to the table.
The Port continues to aggressively market new work opportunities, Swor said, and while the Port and the Local don't always see eye-to-eye, right now they both see a bright future.
"I don't see (any) where they're not firing on all cylinders," he said of the Port. "We don't have anything to criticize them about."
Beyond the waterfront, new industry, construction and transportation demands have created a wide variety of jobs from electricians to truck drivers to ironworkers.
Matt Zepeda, a project manager with Quigg Bros. Construction, said the company's crane contracts on the AGP silos have created several new jobs for local workers.
"It's exciting to see," he said. "It's a big job for us."
While the company often has to send crews out of the Harbor, the recent project makes for plenty of work right down the street.
"It's nice to have something right in our backyard," he said. "We've been able to employ quite a few guys."
Roy Townsend, general manager of Star Electric, said the new development at the Port, along with the nearby pontoon construction project, have created a nice boost for the local economy.
"They come at the right time," he said, "when times were slow."
While managing all the new growth, Port officials continue to supervise the leases on about 1,000 acres of land owned by the Port. They also maintain the Westport Marina and Bowerman Airfield, which often lose money, but serve as important local infrastructure.
Officials plan to seek additional funding to deepen the navigation channel as they continue to expand operations at the Port. The process can take years, but they want to stay ahead of the increasing traffic. They expect bigger ships will be needed to keep up with shipping demands.
Caldwell said the Port staff has successfully managed many challenges and, while such sudden growth can be scary, it's also a new chapter for the Harbor's economy.
"I see nothing but bigger and better things happening," he said. "It's exciting to be a part of it."
Gary Nelson says the Port's success keeps coming back to patience, customer service and making sure the right tools were in the right place to take advantage of opportunities as they arrived.
"Our timing's been great," he said. "I wish I could say it was planned. ... It was way better than I ever envisioned it would be."
While many people may see a cluster of concrete towers looming in the distance, Port officials see a beacon marking new possibilities, new connections and new jobs for the community.
They see longshore crews bustling to work. They see locomotives pulling through the terminals. They see new ships steaming into the Harbor.
"I feel very good about the future," Nelson said. "It's great for us, but it's really going to be the next generation that sees the benefit."