How Bad Will Hanjin's
by Suzanne Stevens
Hanjin Shipping's decision to stop calling on the Port of Portland in January will have an immediate impact on the regional economy.
As the Oregonian first reported Friday, Hanjin notified the Port and terminal operator ICTSI Oregon that it plans to stop calling on Terminal 6 in January, citing higher costs and as the primary driver.
"Hanjin has been a valued customer of the Port for almost 20 years, and we continue to believe that they have a valuable container shipping franchise in this market," said the Port's Chief Commercial Officer Sam Ruda in a statement.
Hanjin's impact on Port business -- not to mention on area exporters -- is clear. It is the largest container carrier calling on T6, representing about 80 percent of container business throughout the terminal with an average of 1,600 containers per week carrying Northwest goods.
For exporters filling those containers, that means a scramble to find another way to move good to customers worldwide. According to Hanjin, shipments being service the Port would rerouted through Puget Sound ports.
That could prove costly to Hanjin customers. In its statement, the Port said that T6 customers that were forced to truck their goods to Seattle-are ports during a labor dispute in summer 2012 paid about $500 to $1,000 in additional costs per container.
Hanjin's decision comes as the region executes on a plan to increase exports, which are a significant contributor to the Portland metro economy. A recent Brookings Institution study found that exports accounted for $33.9 billion in regional economic activity in 2012, driving in large part by technology exports.
In addition, a recent Portland Business Alliance study found that Oregon companies made and exported $16.5 billion worth of goods to countries worldwide in 2012, creating 490,000 jobs.
The region's top-five exported goods:
- Communications Equipment,
- Audio & Video Equipment,
- Precision Instruments,
- Computer Equipment,
Not all of those good were moved by Hanjin, but as the largest carrier calling on Portland, Hanjin certainly accounted for a good deal of that traffic.
It seems there is a sliver of hope that Hanjin won't set sail from Portland. In a letter to customers obtained by the Oregonian, the shipping giant said it will continue to review its options as circumstances evolve.
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