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Shippers Prep for Lock Closure by Barbara Coyner Capital Press, October 21, 2010

Port of Portland to offer assistance during outage

The wheat harvest has been so-so and Ken and Mary Beth Howell have watched prices fluctuate, but they can't play their usual game of wait-and-see.

The north Idaho producers, who grow wheat, peas and lentils near Potlatch, Idaho, regard the upcoming Dec. 10 Columbia and Snake river closure as a deal breaker.

When the inland waterway shuts down for three months of extensive lock repairs, the Howells know higher transportation costs will enter the picture. The choice is to ship grain before the shutdown, ship later by more expensive train or truck, or wait until the marine highway reopens in the spring.

"We were thinking river closure over price," said Mary Beth Howell, adding that neighboring producers are of a similar mindset. "They're thinking that the market will be very soft before the river closure."

Anticipating the closure, the Port of Portland recently announced plans to step in with rerouting assistance, and even some financial support to shippers using the inland ports between Portland and Lewiston, Idaho.

Typically the route is shut down for two weeks in the winter for maintenance, but this time the closure has been extended to 14 weeks so three major lock projects at the John Day, The Dalles and Lower Monumental dams can be finished.

"At this point, it is still premature to give details (of the assistance program), but additional information will be provided as it becomes available," said Josh Thomas, Port of Portland's public relations point man. "We are currently working with BNSF Railway for direct rail service between Lewiston and Portland."

He added that the program will generally involve support for containerized cargo originating upriver and bound for export to Portland via rail and truck.

"The exact level of support and rates are not yet determined," he said.

Thomas said the financial assistance will come from the port's general fund and will be allocated on a case-by-case basis. The idea is to make the closure as painless as possible as the Army Corps of Engineers upgrades it locks, some of which have not been improved since the 1950s.

He said the corps has already done much of the fabrication work ahead of time, hoping to have minimal impact on inland shipping routes.

"It's all about short-term pain for long-term gain," Thomas said of the shipping disruption. "We remind people to think of the alternative of what it would be like without the ports so they understand the need for the closure."

While the $43.6 million in river system upgrades are timely, fuel and fertilizer shippers who depend on barges to get products inland are jumpy about any transportation price increases. Taking barge traffic offline means they also will compete for available train and truck space, and capacity will be stretched to the limit.

Thomas said this is what the Port of Portland hopes to address with both its rerouting and financial assistance strategies.

Thomas said the river ports have seen some ramping up of shipping in anticipation of the closure but it is hard to quantify how much.

"We want to move as much as we can before the closure, then hold as much as we can after the closure," he said, noting that the Port of Portland regards the inland ports as crucial partners in the West Coast shipping picture.

That is why the port is riding to the rescue with the new assistance program, he said.

"While we have all grown accustomed to the annual two-week outages for maintenance, this prolonged outage is new to all of us," Thomas said. "It's a challenge that will require creativity, flexibility, patience and partnerships along the way."