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Container Liners Pullout to Affect Western U.S. Farm Shippers by Associated Press Taiwan News, September 6, 2004

West Coast shipping costs could increase and U.S. agricultural exports are likely to suffer unless the Port of Portland finds a way to replace two departing steamship lines that carry container cargo, officials said.

Portland is dwarfed by California ports. But any decrease in container traffic through the Pacific Northwest, and its rail connections to the Midwest and South, could increase costs for all Pacific freight and cargo, according to industry and state officials at a shipping conference held recently.

The ports of Los Angeles, Long Beach and Oakland in California, along with Tacoma in Washington state, are already congested and struggling to keep up with container traffic, officials said.

Congestion is so bad in Los Angeles the port has a $40 surcharge per container that is refunded if the shipper loads or unloads after peak hours, industry experts said.

"This is a big national problem," said Peter Friedmann, spokesman for the Agriculture Ocean Transportation Coalition.

The conference was organized by the coalition after Hyundai Merchant Marine and the "K" Line announced they would halt service to the Port of Portland by the end of the year, leaving only Hanjin Shipping to handle oceangoing container traffic along the Columbia River to Portland.

The big 20- to 40-foot (6- to 12-meter) containers can be packed with just about anything, from electronics to clothing to perishable fruit.

But shipping companies such as Hyundai and "K" Line are moving to bigger vessels that need deeper water than the Columbia River, which already adds costs for the 104-mile (167-kilometer) transit along the river compared to the ocean ports in California and Washington state.

President George W. Bush announced Aug. 13 on a campaign swing through Oregon that he would urge Congress to approve a $150 million dredging project that will deepen the Columbia River channel by 3 feet (1 meter) to an average of 43 feet (13 meters) all the way from Portland to the Pacific.

Bush had originally rejected funding in his initial federal budget proposal in February, and his decision to support the project was welcomed by regional business and political leaders.

But many of those same leaders agreed the project will begin too late to prevent Hyundai and "K" Line from changing course, forcing farmers, manufacturers and wood products companies to consider alternatives that appear costly.

"This is not free," said Terri Bartle, a Columbia River Customs Broker & Freight Forwarder Association board member. "Somebody is going to have to pay for this."