Innovative Everett timber firm ships ‘canned’ logs to Asia

EVERETT — Other companies have done it.

Forest Marketing Enterprises even has dabbled in it since 2002.

But the Everett-based timber company made it a big part of its business model last year and is now getting recognized for the effort.

Forest Marketing, better known as Formark, started exporting millions of board feet of logs to Asia in shipping containers.

Usually, logs get transported overseas in bulk ships. Formark is packing logs into containers and putting them on container ships.

“I think the thought was Del Monte green beans in one end and canned green beans out the other,” said Eric Warren, president and CEO of Formark. “We’re just doing it with logs.

Shipping containers come from Asia filled with goods and then are typically shipped back empty.

By filling these containers with logs, Formark is able to make smaller shipments of logs, which are more appealing to smaller mills in Asia. It’s also increasing the revenue of freight companies and ports while decreasing port congestion.

That’s why Warren has been chosen as the Small Business Administration Exporter of the Year for the Pacific Northwest including Alaska, Idaho, Oregon and Washington. He is one of 10 finalists for the Small Business Administration National Exporter of the Year. The winner will be announced in May.

“Formark used multiple SBA loan programs to meet different business needs,” Small Business Administration Seattle District Director Kerrie Hurd said in a statement. “This enabled them to increase their exports and create more jobs.”

Formark has been in business since 1991. It was started by Bob Hagerman, who died in a helicopter accident scouting logs a decade ago near Easton.

Warren worked as Hagerman’s operations manager and continued to work for Hagerman’s wife until three years ago when he bought the company.

The company exports logs to Asia including to China, Japan, South Korea and Pakistan from tree farms and private property owners. Timber harvested on public lands can only be sold to domestic lumber mills.

“The logging community, to be healthy, has to have a domestic and export side to it,” Warren said.

Formark’s suffered through troubles in the past couple of years. The slowdown at the West Coast ports last year hurt the company financially.

“We found ourselves in a bad spot,” Warren said. “There wasn’t really anything you could do about it, but wait it out.”

Shortly after the dispute was resolved, Formark was forced to move out of its location at the Port of Tacoma when another company moved onto the site, Warren said.

So the company built a $7.5 million loading facility at the Fredricksen Industrial Park in Spanaway, south of Tacoma. The facility has a debarking machine that helps with agricultural restrictions shipping logs to China.

Despite the difficulties, Coastal Community Bank and Evergreen Business Capital in Seattle loaned Formark the money to build the new facility.

Formark has a proven history in the industry and was able to show that the Asian market wants the types of logs available in the Pacific Northwest, said Isaac Maldonado, a Coastal vice president.

Warren was impressive with how well he knows the industry and how he’s built trans-Pacific relationships, Maldonado said. And Warren has met or exceeded every projection.

“They surprised myself and the bank with the volume they could move,” Maldonado said. “And I think they surprised themselves.”

Most of the logs shipped in containers are transported through the Port of Tacoma. Formark ships containers filled with logs to South Korea from the Port of Everett. Warren said it takes skill to be able to pack the logs into the containers.

“I’ve had some guys who will never be able to do it and I’ve had some guys who have taken to it quickly,” Warren said. “We’re always looking for good can loaders.”

Formark shipped 16 million feet of logs in containers to Asia in the fourth quarter of 2016. One million feet of logs is about 230 truck loads.

Warren found out he was being named the exporter of the year when he received a phone call at SeaTac Airport waiting for a flight to China.

He said he expects the federal agency thought it was a feel-good story with the troubles its experienced as well as its commitment to ship logs in what would have been empty containers.

His company employs 22, but there’s a domino effect with the trade. He figures as many as 200 jobs a day are supported through his work at the ports and with the freighters.

To ship logs in containers takes more paperwork and a little bit more hassle. Still, he points to advice that his dad gave him years ago.

“He always said, ‘If you want to make some money, do something everybody else doesn’t want to do and get good at it,” Warren said. “I think we took that line of reasoning.”

News producer Sue Misao contributed to this report.

Jim Davis: 425-339-3097; jdavis@heraldnet.com.