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Get a load of Puget Sound by Jeanie Senior Portland Tribune, March 29, 2005

Port of Portland's thoroughly outfitted northern neighbors haul in Asia trade

SEATTLE -- Its terminals bustling with foreign-flagged ships and containers loaded with Asian-made goods, the Port of Seattle is capturing a healthy share of the global economy.

Farther south on Puget Sound, business is so brisk at the Port of Tacoma that they're engaged in what one official called the "terminal shuffle" -- building new facilities and moving tenants around to meet the demand.

It's a different picture at the Port of Portland, which for years has emphasized that it's an export-focused port. Indeed, bulk exports of soda ash, potash and grain, as well as a jump in steel plate imports, gave Portland a record year in 2004.

What's passing Portland by, however, is the rising tide of Asian imports clogging bigger ports along the West Coast, from Vancouver, British Columbia, to Long Beach, Calif., and Los Angeles.

In Portland, container traffic fell 19 percent last year, after two of the three trans-Pacific container shipping lines calling here dropped the city from their port rotation.

By contrast, the flood of arriving goods, from housewares to clothing, electronics and toys, brought record years in 2004 for the ports of Seattle and Tacoma.

In both cities, the ports are building to meet the demand; their waterfronts bristle with new cranes, new terminals, new buildings. Seattle's port has spent $1 billion on marine facilities in the last decade, including the flashy $17.1 million Bell Street Pier Cruise Terminal at the edge of downtown.

The cruise business also is bringing millions of dollars to Seattle's economy. It's grown enormously; starting with just six ships calling on Seattle in 1999, the number grew to 150 ships in 2004 and this year will swell to 170. Besides the Bell Street Pier, which accommodates one vessel at a time, Terminal 30 has space for more cruise ships.

The only regular cruise ships to call on Portland are smaller, headed up the Columbia River for weeklong cruises. What could have been Portland's chief attraction to cruise ships -- the massive Dry Dock 4 -- was sold in 2001 and moved to a shipyard in the Bahamas, where it gets a steady stream of cruise ship maintenance, refit and repair work.

In Tacoma, the sprawling just-completed $210 million Pierce County Terminal is the biggest container terminal north of Los Angeles, the largest-ever construction project in the port's 85 years.

The sparkling new terminal, operated by Evergreen Line, is equipped with five of the port's 17 post-Panamax cranes, green-painted behemoths large enough to pluck a container from the far side of a docked container ship (the term post-Panamax refers to ships too large to go through the Panama Canal).

The Port of Tacoma, which spent $221 million on capital investments in the last two years, is set to spend a record $190 million this year, spokesman Michael Wasem said.

Tacoma also has a lock on sea shipments to Alaska.

"Seventy percent of everything you buy or consume in Alaska goes through Tacoma," Wasem said, pointing to the containers covering one of the two port terminals dedicated to cargo bound for the 49th state.

'A hell of a time'

The Port of Portland bests both Seattle and Tacoma in a couple of categories -- it's the second-biggest wheat exporter in the United States and the third-biggest auto handler -- but it still suffers in comparison to the two Washington ports.

"We're never going to match the scale of Seattle or Tacoma, but we think we can be viable," said Sam Ruda, the Port of Portland's marine director.

Wasem and the Port of Seattle's Mick Shultz are more likely to be sympathetic to Portland than to crow about its second-tier status.

"They've been having a hell of a time," Shultz said of Portland. "There are forces that are at work there that are well beyond anybody at the port's ability to control."

After the shipping lines Hyundai Merchant Marine and "K" Line dropped Portland from their port rotation, just one trans-pacific container line, Hanjin Shipping, was left calling on Portland; the port's container count in 2004 totaled just under 275,000 TEUs, or 20-foot equivalent units -- the length of a shipping container and the standard measurement worldwide.

The Puget Sound ports set record container volumes last year, each moving 1.7 million TEUs across their docks. Despite their success, even Seattle and Tacoma fade next to the superports of Long Beach and Los Angeles; Long Beach handled 5.8 million TEUs in 2004, and Los Angeles moved a staggering 7.3 million.

Seattle's Shultz called the decision by Hyundai and "K" Line to pull out of Portland an indicator of the surging Asian shipping business, with the sheer volume of exports to North America forcing shipping lines to tighten their schedules.

"The big companies don't want to stop at every port along the coast," he said. "They want to go to one or two places and they're out of here."

Port of Portland officials are hustling to bring in another container shipping line.

"I'm not anticipating we're going to be a lonely container port too much longer," Ruda said.

Several factors may help

The port expects great rewards when the Columbia River channel between Astoria and Portland is dredged to be 3 feet deeper so bigger and more heavily loaded ships can come up the river. Work on the long-hyped multimillion-dollar project begins this year, aided by $9 million in federal funds.

Because of the huge cargo growth -- and the need for importers to get their goods moved expeditiously from port to destination -- Ruda thinks Portland is in line to get some of the spillover from other crowded ports, including Vancouver, British Columbia.

"I think that folks are looking seriously at us, where perhaps a year ago they may not have considered us as a port of call," he said. "We have room to expand and to grow; hopefully, that capacity is going to match up with a container service."

The port's third post-Panamax crane, with an $8.2 million price tag, will be delivered from China in 2006; the investment will help the container ships that make the lengthy upriver trip to Portland unload more speedily. Most big West Coast ports use at least three of the cranes to facilitate loading and unloading.

Shultz said the ports of Tacoma and Seattle boosted their competitive advantage when they worked together to persuade several major retailers, including Target, Home Depot, Wal-Mart, Pier 1 Imports and Michaels, to open national import distribution centers in the Puget Sound area.

"It used to be that the rule of thumb for Seattle and Tacoma was 70 percent of the cargo came off the ship and onto a train to Chicago for distribution by truck," he said.

"That ratio has changed because of the presence of the distribution centers; now about 60 percent goes onto trains, an additional 10 percent goes by truck to the distribution centers. Even though we increased the cargo, the volume did not decrease the available capacity on the railroad."

The Portland area has a national distribution center for Columbia Sportswear and Fred Meyer, and a regional distribution center for Dollar Tree. Ruda said the port is working to add others.

An industry in flux

The Port of Portland, which has allocated the lion's share of its capital expenditures since 1993 to aviation projects, started to step up the spending for its marine division in 2004. Several pending projects are aimed at improving rail and truck connections.

Ruda said one current limiting factor is the worldwide shortage of ships, with demand outstripping capacity. When what he called "a fairly aggressive onslaught of new builds" -- in other words, a lot of new ships f come online between 2006 and 2008, he expects that will free other ships to serve Portland.

"This is such a fluid industry right now," he said. "Carriers and importers are looking at diversifying their ports of entry."

He added, "I think we're going to be able to turn it around. We're not going to be doing this on hopes and prayers. I think our strategy is sound. It will give dividends."