Pacific Maritime Magazine - Marine Business for the Operations Sector

Portland's 125-Year Anniversary

 

The Port of Portland will export more than 50,000 Ford automobiles to Korea and China, while importing Toyotas, Hyundais and Hondas. Photo courtesy of the Port of Portland.

When the Port of Portland was founded in 1891, America had only 45 states, Hawaii was still ruled by a queen, and the detachable bicycle tire was a brand new invention.

A lot has changed in the US and around the word since then, and a lot has changed at the Port of Portland.

The port, which was established in February 1891, was initially tasked by the Oregon Legislature with maintaining a shipping channel between the city of Portland and the Pacific Ocean. But the port, which celebrates its 125th anniversary this year, has seen its mission evolve greatly over the years.

That mission now includes ownership and operation of four marine terminals, five industrial parks and three airports, including Portland International Airport, which accounts for 90 percent of passenger travel and 95 percent of air cargo in the state of Oregon.

Although it's sometimes overlooked due to the much larger ports down in Southern California, Portland is actually the second oldest seaport on the West Coast, after the Port of San Francisco, which was formed in 1863. The ports of Los Angeles and Long Beach weren't founded until 1907 and 1911, respectively.

Even though it's smaller than the San Pedro Bay ports, Portland has seen its fair share of growth and evolution over the decades and remains a strong competitor in it's region, which includes southwest Washington, Oregon and Idaho.

"The area that we serve continues to grow – our port has expanded dramatically in the last 20 years from where it used to be," Sebastian Degens, the port's General Manager Marine and Terminal Business Development, told Pacific Maritime. "We serve the Canadian heartland now, and if you were to ask CP Railroad, they would probably consider us a strategic gateway for them. That would not have been the case 20 years ago."

Other than size and scope, another way in which Portland differs from the LA area ports is that it's one of the few state-chartered ports on the West Coast: the State of Oregon appoints the port's commissioners. Portland is not a municipality-controlled entity, and is intended to serve a wider region than the city it's located in.

"We have a lot of our customer base that's in Alberta, in Saskatchewan, and that's unusual, I think, in a world that often shrinks. We're expanding," Degens said. "Thirty years ago, we had a smaller scope of services."

Port of Portland Executive Director Bill Wyatt told Pacific Maritime Magazine that the port's primarily role in the past has been an export gateway for agricultural cargoes, but that's changing.

"Over the years, we've added a large auto franchise, both imports and exports, and we export a lot of bulk mineral products – potash, soda ash and grain – and we have what I would characterize as a niche container port," Wyatt said.

One of the keys to the port's longevity, its leaders say, is that it isn't just tied to one type of revenue stream, like some other West Coast ports.

"When you talk about ports today around the United States or on the West Coast, people are understandably focused on containerization, because that has driven so much of the port industry. Our port is heavily diversified," Wyatt said. "The revenue that we generate from our container operations is less than five percent of our total. We have a very diverse portfolio."

"This year, we'll do over 50,000 exports of Ford automobiles, to Korea and to China. We import Toyotas and Hyundais and Hondas. We export potash from Canada, soda ash from Wyoming, and grain from virtually all points it's grown in the United States," Wyatt explained. "We are diversified, and we think that's a strength for us because we are a small market and if all we had were containers, it would be a very challenging go for us. It's a strong, diversified portfolio of maritime activities, much of which serves the local economy. So we think we're in a very good position."

That diversity has helped the port withstand the loss of trans-Pacific container service at the port's lone container terminal, Terminal 6. In March 2015, Hanjin Shipping eliminated its direct call service, and the following month, Hapag-Lloyd departed for good.

Hapag-Lloyd had represented 19 percent of the business at the port's lone container terminal, while Hanjin had represented 80 percent, averaging about 1,600 containers per week. The exit of both carriers meant that Portland lost 99 percent of the business at the terminal in fewer than two months.

ICTSI Oregon, which operates Terminal 6, has had ongoing problems with productivity at the terminal, caused in part by a rift between it and the International Longshore & Warehouse Union. ILWU members had walked off the job numerous times due to what the longshore union claims were "multiple pay disputes and associated grievances" associated with the "mismanagement" of the terminal.

But despite the labor problems, port management is optimistic that trans-Pacific service will return to Terminal 6 at some point.

"We have plans, hopes and expectation" for a trans-Pacific service return," Degens said. "We will do whatever we can and whatever it takes to create the conditions where a service would come back here. The market is really strong here in Portland and the Pacific Northwest; we've spent a lot of time since the carriers left in March of last year talking with the shippers throughout our region. The commercial conditions are there, it's really a function of the operating conditions, getting to a point where a carrier feels like it's a good bet to come into Portland."

Wyatt was also optimistic, saying that part of the void could be filled by an existing tenant.

"Westwood Container Lines, which is now a subsidiary of Sumitomo Warehouse, has monthly service that we think will soon be increased in capacity. It's small, but it is currently serving our port and a variety of ports in Japan and Korea."

In addition, he said, a new player or players are destined to come to Terminal 6 eventually, he said.

"There is a strong and very unique container market here in Portland, it is evenly balanced – there are as many loaded imports as there are exports – and I think given the state of the container trade, Portland was a financially remunerative port call when they were here until the very end when labor problems made it untenable for them."

"I believe they or someone else will come back to Portland, I would say within the next 15 months, and I'm confident about that," he said.

One thing that may help the port attract new business is that about six years ago, the Columbia River's 103-mile navigation channel was deepened from 40 to 43 feet.

"It's a seemingly obscure thing, but it's been immensely important," Wyatt said. "That additional three feet allows primarily larger bulk vessels, and as a result, the bulk terminal operators have invested well north of a billion dollars in increasing their throughput capabilities for grains and other bulk cargoes, most of which emanate from this region or other parts of the Western United States."

"I think deepening navigation channels is an immensely challenging thing to do in this day and age," he continued. "Getting that accomplished on the Columbia River, where we have something like 17 endangered species and a very challenging environment for this kind of activity was an enormous accomplishment, it has resulted in huge investment and increased exports from the United States to the rest of the world. I am very proud of that."

In addition to the deeper channel, another thing that aids Portland's maritime operations is that they aren't just dependent on imports from Asia.

"We have a very small population base here in the Pacific Northwest and in order to be anything other than just a small, regional port, you have to have a gateway function," Degens explained. "And we have what the world needs: we ship out fertilizer, we ship out food, we ship out animal feed, we ship out fiber and fuel. And those are really the fundamentals of economies all over the place. Those are things that are in short supply everywhere else, but we are rich in here."

Vince Granato, the Port of Portland's chief operating officer, said that the port's underdog status means that it has to win business by being more aggressive than other ports.

"We're not always at the top of mind for businesses that are globally located," he admitted. "Everybody knows LA and Long Beach and San Francisco, and even Seattle. In Portland, we're a little harder to get to – we're 107 miles up the river – and we don't have the same population base, we're a little smaller. So we have to work harder because we're not always in the forefront of peoples' minds when it comes to business in the United States, and certainly on the West Coast."

"We have to make ourselves a little bit more visible because of those disadvantages that we have," he continued. "I think in many cases, we win more than our fair share of services because of the efforts we have to put through. We realize what our situation is, but we actively and aggressively go after those business opportunities."

While pursuing those opportunities, the port will also commemorate its 125th anniversary through a series of public events during the year, including:

• A timeline display in the tunnel to the parking lot at Portland International Airport. The timeline, which includes photos and artifacts, was installed Feb. 9 and is to remain up throughout the year.

• The Seaport Celebration, an Aug. 13 family friendly event to explore the working waterfront, with special elements geared around the 125th anniversary.

• The Runway Run, a 5K run on an airport runway that's scheduled for Sept. 24.

• Reduced price jet boat tours one Saturday a month during the summer. The cost is $5.

All the events are open to the public, something that allows area residents to celebrate the port's success and longevity, as well as learn about the port's past, thereby further fortifying the bond between the seaport and surrounding area.

"The history of the port," Wyatt said, "is in many ways, the history of our community."

 
 

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