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Shipping Line Agrees to Call on Portland by Mitch Lies, Staff Writer Capital Press, March 14, 2006

Another shipper also close to inking deal to serve Oregon port

The Port of Portland is bouncing back. Less than 18 months after two of the port's three trans-Pacific carriers left town, one new carrier has agreed to begin stopping in Portland and another is on the verge of doing so.

Port spokesman Eric Hedaa said the Israel-based Zim Integrated Shipping Services Ltd. agreed this week to begin serving Portland in May and Yang Ming Transport Corp. is looking to start in June.

Port officials still are ironing out terms with Yang Ming, Hedaa said, including whether the Taiwan-based company will operate under an existing contract or negotiate a new one.

Only Hanjin Shipping has provided trans-Pacific shipping from Portland since late 2004 when "K" Line and Hyundai Merchant Marine pulled out of Portland.

Zim will drop its Seattle stop in favor of Portland and provide transhipment service to Japan by offloading agricultural products in Korea on some of its 13 mid-sized ships, Hedaa said. Zim also serves ports in Vancouver, B.C., China, Sri Lanka, Singapore, Greece and Turkey.

Yang Ming, which opened its first U.S. terminal last year in Tacoma, offers service to Taiwan and China.

The addition of the two trans-Pacific carriers is seen as vital for the area's agriculture, much of which leaves the area for Asian ports. In addition to increasing export capacity, competition among the carriers is expected to drive down freight rates.

But given that agricultural exports typically are low-priced, drawing the carriers to Portland was more dependent on the port's import capacity than its export capacity. Hedaa said the port's connection to inland distribution centers was a key selling point.

"With our smaller local market, it is critical we get these carriers to start viewing us as a gateway to large inland distribution centers such as Chicago," Hedaa said. "When you consider that the rail infrastructures in Southern California and Seattle and Tacoma are pretty close to capacity, the port's rail connection starts to look real good as far as getting those boxes to inland points."

The purchase of a third post-Panamax crane, which is expected to be delivered later this month, also helped attract the carriers, Hedaa said.

The initiation of a project last year to deepen the Columbia River shipping channel from 40 to 43 feet was also a vital piece of the port's draw, according to Port Executive Director Bill Wyatt.

Steve Van Mouwerik, Oregon division manager for Anderson Hay and Grain, said the carrier additions will provide straw shippers more container availability and put less pressure on the industry to move shipments by rail to Tacoma and Seattle.

"We would hope that Portland would be a little more competitive now," he said. Ocean freight rates out of Portland typically are $300 to $400 more per container than out of Tacoma, Van Mouwerik said.

John Kratochvil, international transportation specialist for the Oregon Department of Agriculture, said the addition of the two carriers is vital to keeping down shipping rates.

"(The addition of the two lines) is extremely important for outbound agricultural products heading to Asia, especially to Chinese ports," Kratochvil said.

More than 50 percent of agricultural products produced in the Northwest are exported to Asia, Kratochvil said.

Yang Ming has an existing contract with the Port of Portland through a shipping alliance it belongs to that includes Hanjin.