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How Portland's Container Terminal Can Be Saved by Zvi Raanan The Oregonian, September 13, 2004

No one can deny the splendid achievements of the Port of Portland with regard to linking Oregon with the outside world and putting this port firmly on the country's economic map. Nor can the enormous economic impact of the Port and its activities on the city and the state be denied.

For the last four years, however, the Port has been losing container traffic as trans-Pacific shipping lines have been moving to other ports. This has resulted in Terminal 6 losing money, only to be subsidized by other operations of the Port of Portland, including Portland International Airport.

Bill Wyatt, the Port's chief executive, therefore has things entirely wrong ("Facing the future at the Port of Portland," Aug. 28). "Portland's long-term opportunity lies not in attempting to replicate the container model of our neighbors to the north and south," Wyatt wrote. "Rather, Portland's path to prosperity lies in prudent and rational investments that will enhance the value of our existing container facility"

It certainly would not. Increasing investments in a facility that barely covers its operating costs and cannot cover its capital costs would eventually lead to financial disaster. A relatively simple examination of the reasons this modern and efficient port facility is losing its main maritime customers gives a clear indication of what the Port's policy should be.

Modern container vessels require a water depth when fully loaded of at least 45 feet. But the reason important ocean carriers such as Evergreen America and Hanjin Shipping -- and now "K" Line and Hyundai Merchant Marine -- ceased regular service to Portland while continuing to call at other terminals is not mainly because of the depth limitation of the Columbia River channel. It is also because the most recent, highly sophisticated and expensive vessels cannot afford the additional time required to sail the 104 miles to Portland. They prefer to call at ocean ports, so that they deviate as little as possible from their routes and critical time-tables.

The imbalance of container traffic in Portland -- there are many more boxes with exports at Terminal 6 -- is a further reason for larger vessels not to call here. Of the approximately 200 container vessels that called here on an annual average in recent years, all have had to arrive and depart with less than full loads, thus drawing about 36 feet in depth.

Nevertheless, Portland's river pilots time vessels' arrivals and departures to conform with high tides because they prefer the safety of an under-keel clearance of at least 3 feet. (Which means that the latest generation of trans-Pacific vessels would need a channel depth of 48 feet.) While a Columbia River channel depth of 43 feet might have avoided some of the container lines' flight from Portland in the short term, in the longer term no further dredging will attract trans-Pacific liners to call here.

Container vessel operators are likely in the future to drop off containerized cargo for Oregon at ports in California or Washington, leaving importers and exporters with the problem of onward transport by road, rail or smaller feeder vessels. But the growing population of Oregon and in-land neighboring states will no doubt generate more containerized cargo trade in the future, with no Oregon port facility to handle it.

The Port of Portland must face the facts: Most upriver ports the world over are losing their container business to deep-water terminals situated on the ocean. What the Port of Portland therefore needs to do is to mobilize investment partners -- preferably shipping lines -- to invest in a satellite container terminal in or near Astoria, with an upgraded rail connection. Suitable cranes and mobile equipment from Portland's Terminal 6 could easily be transferred to the new facility.

Such a terminal is also likely to attract container lines currently going to Tacoma or Seattle, given the convoluted and time-consuming sea route of the Puget Sound.

The export of bulk grain and minerals, which constitutes the largest volume of Portland's maritime business, will also soon be affected by the depth limitation of the river channel. Our Asian trading partners have recently introduced improvements for the efficient bulk-handling of grain, which is being transported in ever-larger ocean-going vessels. But, because of the same depth limitations, bulk grain carriers negotiating the lower Columbia River are limited to ships smaller than optimal size or larger ships loaded at less than their capacity. This makes the transport of Northwest grain more expensive. Here again the deepening of the channel by a mere 3 feet will not provide an answer over the long term.

The only "prudent and rational investment" currently required is an economic and engineering feasibility study for an estuarial satellite facility at the mouth of the Columbia.

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Port of Astoria