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Port Outlook Improves for Some Exporters

by Philip S. Moore, Freelance Writer
Capital Press, April 14, 2006

Port of Portland welcomes new shipping lines

Fortunes are looking up for the Port of Portland, and for the upriver exporters who depend on the port's terminals - especially Oregon and Idaho hay, straw and onion growers - the promise of a rebound is bringing a ray of hope to what has been an increasingly dark outlook.

Haifa, Israel-based ZIM Integrated Shipping Services has chosen Portland as its sole U.S. Pacific Coast port of call for its 13-ship weekly Asia-Mediterranean-Pacific service, starting in May. Following them, Yang Ming Line has indicated that it plans to also begin Columbia River service, possibly as soon as this summer.

"ZIM has said they would like to see Portland as their gateway port to the Midwest, which would be a first for us," said the port's marine spokesman Eric Hedaa. "We're really excited about that because we're optimistic they'll bring healthy volumes to the port."

As for Yang Ming, Hedaa said nothing is certain, yet.

"They're a member of an alliance with COSCO, Hanjin and K-Line, but we don't know if Portland will be part of that or if they're going to go it alone."

However, in combination with ZIM's service, "We think they will help us build export capacity and hope they help us with other ocean carriers by showing them the way."

This turn of events is a change for the Port of Portland where, until now, their good news has been that the bad news could have been worse.

Hyundai Merchant Marine and K Line ended Portland container service in late 2004, a major reversal for a port, which accounts for less than 1.6 percent of the Pacific Coast container market.

However, record volume for the two remaining container lines, Hanjin and CP Ships, kept Portland's total container volume loss to 40 percent, and the Columbia River continues to lead the West Coast in bulk exports and import of non-containerized specialty cargo.

"What we've been facing has been part of a global situation, but we've been doing what we could to improve infrastructure and cut costs to be competitive," Hedaa said. "As the global situation changes, we expect the situation here to change with it."

With more cargo on the move and port constraints on larger ships, "the current network is badly strained," said Albert Pierce, executive director of the Transpacific Stabilization Agreement, a San Francisco-based shipping industry consortium.

He said the constraints at ports like Los Angeles-Long Beach and the inability of most U.S. ports to receive the largest 4,000-container ships is cooling interest in construction of bigger vessels in favor of smaller, 2,000-container ships and faster port turn-around.

How much difference a return of shipping lines to Portland would make to upriver ports and the growers that have depended on them to reach overseas markets is uncertain, said David Doeringsfeld, manager of the Port of Lewiston.

He said his port's volume has plunged from nearly 9,000 40-foot containers in 2000 to 2,868 by 2005.

Any sign of a rebound is good news. "It's a difficult question to answer, would the numbers rebound?" he said. "I don't know, but even half of that would be great."

More shipping lines in Portland are welcome, but direct service to South Korean and Japanese ports would be even more so, said Matt Eide, operations manager for Quality Trading, a hay and straw exporter based in Aurora.

"Right now, we're getting by, with some straw being trucked to Tacoma and other shipments being loaded into containers in Portland, but more options mean better choices," he said.

While there are enough containers and carriers have enough space for hay and straw cargoes, timing continues to be a challenge to sustaining, let alone expanding, overseas markets. "We understand that our shipments aren't a high priority for the shipping lines, but not having direct service to Japan is a problem because transit times affect our customers," Eide said.

"Once you establish a schedule, no matter how long it takes, you can serve a customer on a fairly constant basis. However, in this age of just-in-time inventories, if they want prompt shipment or they want to change a schedule, the long transit times are a huge obstacle," he said.

One group not looking to return to the Port of Portland are onion growers.

While almost all of the listed members of the Idaho and Eastern Oregon Onion Association continue to export, the four years since Portland lost direct and timely service to Japan has meant that almost all of them have found other buyers.

Today, it's Eastern Washington's Spanish onion growers that ship to Japan and Korea, primarily through the ports of Seattle and Tacoma. "Oregon and Idaho growers export to Canada and Mexico," said Candi Fitch, executive director of the association.

"Mexico has been an especially good market for us," she said. "We've sponsored promotions down there to build consumption of yellow onions in Mexico, and the market is responding well."

Philip S. Moore, Freelance Writer
Port Outlook Improves for Some Exporters
Capital Press, April 14, 2006

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