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June 09, 2014

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20 THE JOURNAL OF COMMERCE www.joc.com JUNE 9.2014 PACIFIC NORTHWEST GATEWAY SPECIAL REPORT The investments are designed to handle increased cargo volumes more efficiently. "These are meat-and-potato investments." While Portland handles containers and is therefore included with Los Angeles-Long Beach, Oakland and Seattle-Tacoma when West Coast container statistics are tabu- lated, it isn't positioned to be a container load center for the entire country. The port's 43-foot channel depth can't handle the mega-ships with capacities greater than 8,000 20-foot container units that are beginning to dominate the trans- Pacific trade. It's unlikely another deepening project would pass the cost-to-benefit test by which major dredging projects are judged. Portland's cargo manifest, though, is diversified. It includes auto imports and exports, grain and grain products, miner - als, liquid bulk products and steel imports. As a river port, Portland is the only deep- water West Coast gateway that offers cargo interests the option of barge commerce in addition to truck and rail. Portland's leaders never envisioned the port as being a container load center for the U.S. Its mission statement says the port's role is to connect Oregon with the global market- place for all types of cargo. Portland's container traffic illustrates just how much of a regional port it is. Fully 100 percent of its containerized exports and 80 percent of its imported containers are generated by the local market, said Greg Borossay, senior manager of marine trade and cargo development. Although Portland isn't giving up on containers, the local business climate will have to improve if the port is to increase this business significantly. Labor unrest and Portland's inability to increase its container volumes have kept the port in the news in recent years, and for all the wrong reasons. The International Longshore and Ware- house Union has been engaged in a yearlong jurisdictional dispute with the International Brotherhood of Electrical Workers. The longshore local also is involved in a battle over working conditions with ICTSI, opera- tor of Portland's only container terminal. The toxic employer-worker environment is scar- ing away potential new container business. This past year, ILWU work stoppages, low productivity and overt hostility toward ICTSI almost cost Portland the loss of Hanjin Shipping, which accounts for more than two-thirds of Portland's container vol- ume. No change in this condition is evident. In an era of alliances, big ships and consolidation of vessel calls in fewer ports, Portland's location between the load centers of Seattle, Tacoma and Vancouver, British Columbia, to the north and the California ports to the south, is eroding its container traffic. Volume peaked in 2003 at 339,571 TEUs. Last year, Portland handled 178,451 TEUs. That condition could change overnight, however, if Portland would attract one more strategically chosen trans-Pacific service. Hanjin's weekly service connects Portland with Ningbo and Shanghai in central China and Busan, South Korea. It has a relatively balanced inbound and outbound trade. Portland could generate t wice the volume of containerized exports if ves- sel capacity were available. An estimated 150,000 TEUs of exports from the region move through other Pacific Northwest ports because there isn't enough outbound capac- ity to handle the cargo, Borossay said. A second weekly service originating in South China, with a stop in Japan on the way to Portland, would provide the missing link in the port's trans-Pacific container business, Wyatt said. A second service would carry sufficient imported containers to unload and reload with outbound cargo to satisfy exporters' needs in the region, he said. "THE MONEY IS COMING FROM THE TENANTS, AND IT'S GOING INTO BASIC INFRASTRUCTURE … THESE ARE MEAT-AND-POTATO INVESTMENTS."

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