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Port Operator says Longshore Workers Aren't Speeding Up
as Hanjin Shipping Decides Whether to Drop Portland

by Richard Read
The Oregonian, January 7, 2014

(Benjanmin Brink) A Hanjin Shipping Co. vessel berths at the Port of Portland's Terminal 6. Longshore workers have not boosted container movement at the Port of Portland in the last month, according to the terminal operator, casting doubt on Hanjin Shipping Co.'s decision expected this week on whether to pull its vessels.

Gov. John Kitzhaber announced a Port deal Dec. 12 in which union electricians gave up the equivalent of two jobs at the terminal to longshoremen, in hopes that dockworkers would increase productivity, inducing Hanjin to continue weekly calls. But the International Longshore and Warehouse Union never publicly agreed to increase the number of containers moved per hour by its members.

Asked Tuesday about productivity at the North Portland container yard, Elvis Ganda, chief executive of terminal operator ICTSI Oregon Inc. released a statement reporting no sustained improvements since the agreement with the International Brotherhood of Electrical Workers. He did not release specific container-move numbers, which will be available Wednesday.

"Although it has only been a month since the governor's announcement of the deal between the Port and the IBEW, we are seeing no sustained increases in productivity on either Hanjin or Hapag vessels since that time," Ganda said. "We hope that changes and the deal will generate some sustained improvement going forward in 2014."

But Bill Wyatt, Port of Portland executive director, disputed Ganda's conclusion, saying he had seen improvements.

"We're not setting any Olympic records," Wyatt said. "But I have seen the numbers and there has been improvement. There does seem to be a difference in attitude with labor on the waterfront, and we're encouraged."

Wyatt declined to release the numbers, saying they were proprietary. He said numerical comparisons over the holidays are murky anyway, partly because experienced workers take vacations and their replacements may not be as capable.

A spokeswoman for the San Francisco-based longshore union did not respond late Tuesday to a request for comment.

It's possible that ICTSI would understate productivity improvements to strengthen its hand in contract negotiations with Hanjin and other ocean carriers. Improved productivity would reduce ICTSI's labor costs, enabling ocean carriers to press the terminal operator to lower the rates it charges them.

Those anxiously awaiting Hanjin's decision include Northwest exporters, importers, manufacturers, farmers, shippers and others who depend on Oregon's only international container terminal. If the South Korean company carries through on its decision to depart, Oregon businesses will have to pay extra for trucking containers to and from Seattle, Tacoma and other ports.

A long-running dispute over the two jobs plugging, unplugging and monitoring refrigerated containers, or reefers, slowed operations at Terminal 6 last year, snarling cargo and causing ships to bypass Portland. Kitzhaber said in December that his deal resolved the dispute over the reefer jobs, meaning that T-6 would be competitive, productive and internationally attractive. But the deal did not include targets for increased container moves per hour.

Without specific guarantees, it's been unclear whether Hanjin managers will conclude they have enough assurance to reverse their decision to leave Portland. ICTSI's statement that productivity hasn't improved could increase the likelihood that Hanjin will depart.

But Portland's parochial issues may not rate high among concerns at South Korea's largest ocean cargo carrier, which faces global financial challenges. In November, Hanjin chief executive Kim Young Min resigned, taking responsibility for two successive years of losses and delays in getting financial support from creditors.

Hanjin is among cargo carriers facing a global overcapacity and a slump in freight rates caused by China's weak iron-ore demand and other factors. It has more than $690 million in debts and loans maturing this year. In 2013, its shares fell from 12,800 won to 7,310 won on the Korea Stock Exchange.

A new CEO, Tai Soo Suk, is working to right the company. His management experience includes years at Korean Air, a major Hanjin Shipping shareholder. Port officials expect Hanjin's decision on Portland will be made at Hanjin's headquarters in Seoul.

Related Pages:
Energy Northwest Tests Wind Power Storage System by Shannon Dininny, Business Week, July 1, 2013

Richard Read
Port Operator says Longshore Workers Aren't Speeding Up as Hanjin Shipping Decides Whether to Drop Portland
The Oregonian, January 7, 2014

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