the film
Economic and dam related articles

Expert: Shippers Haven't Abandoned
Hopes for Port of Portland -- Yet

by Mateusz Perkowski
Capital Press, November 18, 2015

A barge loaded with containers awaiting transfer to ocean-going vessel and shipment to Asia. Severely diminished container service at the Port of Portland hasn't yet irreversibly changed shipping strategies, but that pattern won't hold forever, according to a freight expert.

Importers and exporters largely hope that ocean carriers will eventually return to the port's container terminal after Hanjin and Hapag-Lloyd pulled out earlier this year, eliminating almost all container service, said Dan Smith, principal of the Tioga Group transportation consultancy firm.

So far, those hopes have prevented shippers from closing distribution centers or making other changes unlikely to be reversed if ocean carrier service returned to the container terminal, Smith said during a legislative hearing in Salem on Tuesday.

Hanjin and Hapag-Lloyd, which represented more than 90 percent of container traffic at the port, said their decision was based on low productivity, which the container terminal operator -- ICTSI Oregon -- blamed on work slowdowns by the longshoremen's union.

The International Longshore and Warehouse Union, on the other hand, faulted inadequate equipment and safety practices as the cause of slowed container movements.

A broader labor contract dispute between ILWU and terminal operators aggravated the situation, with West Coast slowdowns occurring in late 2014 and early 2015 before the issue was settled earlier this year.

Companies that buy from importers and exporters are now using the unpredictability caused by the slowdowns as a negotiating lever, which may lead to some distribution centers becoming uneconomical -- thus prompting shippers to close them and divert traffic to other areas, said Smith of Tioga Group.

"We are getting closer to a cliff," he said.

For now, though, shippers are "coping" by using trucks and trains to send goods to ports in Seattle and Tacoma, Smith said.

Bill Wyatt, executive director of the Port of Portland, said the longshoremen's union, ICTSI Oregon and the port are still engaged in litigation but they're also in "significant conversations" and he's more optimistic about a resolution than six to eight months ago.

Ocean carriers are looking for a signal from ILWU that they're "welcome to return" to Portland, at which point they're likely to renew container service at the port, Wyatt said.

While the Port of Portland's container terminal doesn't generate large revenues, it was a profitable niche for Hanjin -- a major trans-Pacific carrier -- until the work slowdowns began, he said. "It is a lucrative market for the right carrier."

Until container service is restored to Portland, it's possible that agricultural shippers in Eastern Oregon and Idaho will be helped by reconfiguring the transport of goods from Lewiston, Idaho.

When the container terminal was fully operational, barges moved product from Lewiston to Portland for loading onto ocean liners, but that service has now fallen apart, Wyatt said.

The problem may be mitigated by transloading goods sent on barges from Lewiston onto trains in Boardman, Ore., for shipment to Tacoma, he said.

During the legislative hearing, the possibility of expanding Oregon ports in Coos Bay or Newport to accommodate containers was discussed, but Wyatt said this wasn't a realistic alternative due to the huge investment involved.

"The likelihood of developing another container service in Oregon is unlikely because the capital cost is immense," he said.

A research team, part of the state's response to the Hanjin container shipping company ending its calls at Portland this year, last week presented six recommendations during a meeting of stakeholders in Wilsonville.

The initiatives are the result of an effort involving Business Oregon, the Port of Portland, the state departments of agriculture and transportation, and multiple producers and shippers. The recommendations include:

Mateusz Perkowski
Expert: Shippers Haven't Abandoned Hopes for Port of Portland -- Yet
Capital Press, November 18, 2015

See what you can learn

learn more on topics covered in the film
see the video
read the script
learn the songs
discussion forum
salmon animation