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Pulse Shippers Adapt to Loss of
Container on Barge Option

by John Thompson
Idaho Farm Bureau Quarterly, Fall 2016

Growers and shippers in the Palouse Region have adapted to a new regimen, one year after losing the option to transport pulse crops in shipping containers by barge from Lewiston to Portland.

Acreage and production of dry peas, lentils and garbanzo beans (classified as pulse crops by USDA) in the Palouse Region remained consistent in 2016 as shipments switched from containers on barges moving down river from Lewiston to Portland, to containers on trucks moving through the Port of Seattle.

Dean Brocke, president of Brocke and Sons, a wholesaler of peas, lentils and garbanzo beans in Kendrick, said they explored every available shipping option and arrived at containers on trucks as the best choice.

In spring and early summer of 2015 global shipping companies Hapag-Lloyd of Germany and Hanjin from South Korea, pulled out of the Port of Portland after a long-term work slowdown by union longshoremen. The Portland workers were moving less than half of the number of containers per day as longshoreman at other West Coast ports because of disagreements with the port operator, ICTSI Oregon.

"Inland is a more expensive way to ship, but for the most part I don't think farmers have been effected significantly," said Brocke. "It's been a reasonably big deal for us because previously we had a really simple system in place, and now it requires more management."

Dave Doeringsfeld, manager at the Port of Lewiston, said the Port of Portland won't be viable as a container port until there is resolution of the issues between labor and management.

"There are 29 ports on the West Coast and after the contract issues were resolved (in 2014) 28 of those ports went back to work," Doeringsfeld said. "In Portland they only moved 12 containers per hour after that and it should have been closer to 25 moves per hour."

The Port of Lewiston, at 465 miles inland, is the furthest inland sea port on the West Coast but is obviously dependent on the business and dock productivity at the Port of Portland. Problems between labor and management at Portland coupled with questions about its distance inland (100 miles) and difficulties with newer, bigger ships ability to navigate the Columbia River raise serious concerns about the Port's future viability.

Small and mid-sized ports like Portland face challenges as global shippers have increased the size of ships to realize efficiencies. Portland's harbor handles ships in the 6,000 to 6,500 container capacity range. But that's only one-third the size of the largest vessels currently calling in U.S. ports.

In addition, an overcapacity to ship goods exists presently in the ocean shipping industry which has driven prices down and caused problems for many companies. Container rates on vessels are presently at an all-time low. And Hanjin, the Korean shipper, recently declared bankruptcy.

However, Doeringsfeld said with the amount of stranded investment for container on barge shipping and container service at the ports of Lewiston and Portland and along the Columbia River, he's optimistic that the labor / management problems will be solved in the long term.

With regard to accommodating bigger ships at Portland, he said shipping vessels are only efficient when they are loaded full and the makeup of the overall fleet still contains a lot of ships that carry 6,000 to 8,000 containers, as opposed to the newer, larger vessels.

Pulse crops grown in the Palouse Region are exported to about 45 countries. Barging those crops down the Columbia costs about one-third less than the cost of trucking and about one-fourth the cost of rail transportation.

According to estimates from the U.S. Dry Pea and Lentil Council, about 2,400 shipping containers of peas and lentils were previously moved by barge down the Columbia River.

Regarding the ongoing Port of Portland labor dispute, The Oregonian newspaper recently reported that longshore workers were paid $1.2 million in salaries during 2015 as the cargo container traffic ground to a halt. Previously there was an average of 500 jobs per week at the Port of Portland's Terminal 6 where containers are handled. Now they hire for just 30 eighthour shifts per month. "That means the longshore workers are doing one percent of the work they were doing before," according to the newspaper.

However, because of a Pay Guarantee Plan negotiated into their contract, union longshoremen are required to show up for work but they get paid whether there is work to do or not. Elvis Ganda, manager of the port operator, ICTSI Oregon, said the contract terms don't provide much incentive for workers to actually go to work. Union advocates say the plan gives members financial certainty in a business that can ebb and flow over time.

Under the new contract negotiated in 2014, union longshoremen with a Class A designation, the highest class, receive $35.68 per hour for 40 hours per week or $1,427 per week regardless of available shifts. Class B workers receive $999 per week regardless of available shifts. However, many longshore workers earn six-figure salaries if the port is busy. Wages under the Pay Guarantee plan pencil out to about $70,000 per year.

The Pacific Maritime Association, which represents 29 West Coast container port operators, maintains the Pay Guarantee Fund and each terminal operator contributes based on the tons of cargo going in and out. That means terminal operators in other ports are heavily subsidizing the lack of work in Portland, according to The Oregonian.

In the Palouse Region, which includes portions of both Idaho and Washington, the number of acres planted to pulse crops over the past ten years have ranged from 371,000 to 408,000.

John Thompson
Pulse Shippers Adapt to Loss of Container on Barge Option
Idaho Farm Bureau Quarterly, Fall 2016

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