Pacific Maritime Magazine - Marine Business for the Operations Sector

Diversity Keeps Pacific Ports in the Game

 

May 1, 2018

The arrival of the 590-foot cargo vessel M/V Diana Bolten marked the first time in more than 17 years that the newly upgraded Bellingham Shipping Terminal has seen regular cargo shipment. Photo courtesy of the Port of Bellingham.

Port of Bellingham. Port of Portland. Port of Coos Bay. Port of San Diego.

For these four West Coast ports, diversity is the name of the game and they play to their strengths.

Whether it's proximity to Alaskan or Latin American markets, less congestion, or multiple ways to get product from Point A to Point B, each featured port brings advantages to the table that serve customers well. And those relationships are paying off in recent public and private investments, from terminal improvements to rail expansion projects.

Port of Bellingham

For Bellingham, the arrival of the 590-foot cargo vessel M/V Diana Bolten last October was a watershed moment for the community with strong historical ties to the maritime industry.

People stacked 10 deep to watch the vessel carrying animal feed to the newly upgraded Bellingham Shipping Terminal, the first time in more than 17 years that the terminal has seen regular cargo shipment.

"There was a lot of positive support in our community and a lot of excitement over regular shipping activity returning to the downtown waterfront," said Michael Hogan, public affairs administrator for the Port of Bellingham.

It had been a long road to get the terminal up and running. When former tenant Georgia-Pacific shuttered its pulp and paper mill, the port, which purchased the 137-acre site in 2005, undertook a tedious, years-long process that involved various agencies and spent more than $32 million to clean up contamination there, deepen the waterway and berth for better navigation and made stormwater and warehouse upgrades to get the terminal ready for future tenants.

This year, the port commission authorized about $7 million in strategic investment to purchase large equipment such as loaders, stackers and trailers, upgrade the terminal's power system and improve that main pier – the final pieces needed to make the terminal fully operational, Hogan said.

"It's really an exciting time for the shipping terminal," he said.

The terminal's revival is a major moment for a region that saw jobs disappear when Georgia-Pacific left.

"It's our biggest potential for job creation," Hogan said. "It's a game changer to provide those good-paying jobs to the community."

The terminal strengthens Bellingham as a player in an increasingly competitive West Coast shipping market, offering itself as a less congested alternative to Seattle and Vancouver.

Chris Clark, the port's marine terminals business development manager, said the port is in talks with more bulk and breakbulk import and export customers interested in using the terminal.

"We're building on that base of the bulk and breakbulk cargo that we have now with the anticipation that we'll be able to increase that significantly," he said.

The port has about 20 acres of property at the disposal of potential cargo interests, Clark said, adding that GrandCamp International, a new log exporter for Bellingham, is now using the space as a staging area.

"We were able to repurpose that land and now it's available to our customers and potential customers," he said.

That terminal cleanup has also sparked other investment, including the adaptive reuse of the iconic Granary Building, the construction of roads and a park in the downtown waterfront, a new $10 million boat manufacturing facility for All American Marine and Itek Energy's investment in a new $6 million, 48,000-square-foot solar panel manufacturing facility on the downtown waterfront, a move that added about 30 more jobs for a total of 125 jobs based in downtown and gives the company the capacity to create up to 200 megawatts of panels annually.

"We're fortunate to have several features here which we believe will be attractive to future users of the port," Clark said.

Port of Portland

Bellingham isn't the only port seeing a resurgence in terminal activity.

About 263 miles south, the Port of Portland is seeing regular steamship service to Terminal 6, its primary container terminal.

In January, China Navigation Co.'s Swire Shipping started a monthly container shipping service featuring incoming Asia cargo, as well as containers sent to Australia/New Zealand and Western Star trucks exports to Australia.

Daimler Trucks North America is producing the trucks at its Swan Island facility in Portland. "We're glad to have that service back to Terminal 6," said port marine marketing director Ken O'Hollaren.

Weeks later, the port announced that it was teaming up with BNSF Railway to provide rail service to shippers at Terminal 6, a service that runs five days a week between Portland and the ports of Seattle and Tacoma, where goods can be loaded onto ocean carriers.

"It's another option for ocean carriers to move their cargo into the Portland market," said O'Hollaren. "It's a good utilization of an intermodal yard that had not been well utilized in the last few years."

Terminal 6 gives the port the opportunity to expand on its diverse offerings at a port with less congestion and plenty of land for a business to expand.

"These operations with Swire and BNSF have really allowed us to demonstrate the fact that T6 is back in business after an interruption by a previous terminal operator," O'Hollaren said. "And labor productivity is excellent. It's a good showcase for the industry."

The port also saw major terminal investment from Canada's largest mineral exporter.

Canpotex Limited recently completed its five-year, nearly $150 million terminal expansion at Portland Bulk Terminals, which involved a new shiploader, a new warehouse facility capable of holding 110,000 metric tons (MT), and an upgraded vessel loading system that can more efficiently move potash directly from trains and through the warehouse system onto ships.

According to the Saskatoon-based company, the improvements raise overall terminal system capacity by an estimated 3.5 million MT annually for a total of 7.5 million annual MT.

Portland thrives on its ability to offer options for diverse cargo.

"We have this excellent range of inland connections available to serve bulk and containerized cargo customers in the area," O'Hollaren said. "We run the full range, from dry bulk cargo – grain, potash – to import auto and now increasingly, auto export. Then there's general cargo from time to time and soon container cargo, which we're inching our way back to that business."

One of the port's biggest growths in business is in auto exports. The port recently announced that more than 87,000 Ford vehicles were exported from Portland last year, making it the top U.S. West Coast port for auto exports. Up to 314,000 vehicles were handled by the port in 2017, up to 7.8 percent more when compared to 2016.

The Portland port is a major part in the supply chain for vehicle manufacturing. US-made cars come by rail from the assembly line to the port, where they travel on roll-on/roll-off ships headed to Asia. Imports vehicles such as Hyundais, Toyotas, and Hondas come to Portland before they are distributed to dealerships across the West Coast.

To foster the port's export vehicle business, the port and its tenant Auto Warehousing Company last year expanded auto staging space in the Rivergate Industrial District near Terminal 6.

Port of Coos Bay

Boasting the largest coastal deep-water channel between San Francisco and the Puget Sound, the Oregon International Port of Coos Bay is an advantage for customers shipping goods to and from international markets in Asia and the Pacific Rim.

To stay competitive, the port is engaged in a series of projects, including plans to deepen and widen its navigation channel from -37 feet MLLW to -45 feet MLLW and from 300 feet to 450 feet nominal width.

In the realm of rail, the port has been investing more than $33 million in the rail line it acquired in 2010. Coos Bay, whose 134-mile short line railroad links Oregonian shippers in Coos, Douglas, and Lane Counties to the National Rail Network bound for locations across the US and Canada, also plans to spend another $30 million in the next two years for upcoming rail infrastructure projects to improve tunnels, bridges, and track.

"As volumes increase, it is essential that the rail line provides safe, efficient and reliable transportation infrastructure," said Margaret Barber, external affairs manager for the port.

A recently completed rail spur will mean more timber products from Oregon's Willamette Valley to be shipped to Japan and China. This addition will serve to raise rail volumes by approximately 12 percent this year, and opens up additional export opportunities for inland businesses in Oregon to ship through Coos Bay.

The port is also looking to build a multi-use rail-served terminal on the North Spit to meet future regional growth and the state's import and export demands. A feasibility study has been commissioned to outline marketplace drivers, evaluate infrastructure needs and develop a cost analysis for an ultramodern marine terminal, Barber said.

"As part of this feasibility study, the Port proposes including an analysis on ways to implement modern technologies in development of a multi-use terminal, utilizing best practices to meet the highest environmental standards," she said. "As a smaller port, the Oregon International Port of Coos Bay has the capacity to grow, but is not locked into legacy infrastructure, technologies, and old ways of operating. The Port of Coos Bay can be nimble and responsive, handling a variety of cargoes."

Another major development in the North Spit is the Jordan Cove Energy Project, which is currently awaiting permit approval from the Federal Energy Regulatory Commission.

The project calls for building an $8 billion liquefaction facility and corresponding 229-mile pipeline to export Liquid Natural Gas from the West Coast to serve overseas markets around the Pacific Rim.

The project, which would take five years to build, has the potential to provide more than 2,000 temporary construction jobs and an estimated 180 permanent full-time jobs once the facility is operational. The project could process volumes of 7.8 million tons annually.

"The Jordan Cove Project will have significant impacts on the economic development of the region, and the State of Oregon," said Port CEO John Burns. "The Port is actively working with other potential business opportunities to build economic diversity and prosperity in Southwestern Oregon."

Port of San Diego

Unlike its Californian mega-port neighbors where containers are king, the Port of San Diego thrives on its diverse offerings of refrigerated, containerized and bulk and breakbulk cargo.

To foster that business, the fourth largest port in California has invested in its two cargo terminals.

The port in February launched a $24 million project to upgrade its 10th Avenue Marine Terminal.

The modernization project calls for demolishing two old warehouses from the 1950s to make way for a 20-acre laydown area for larger project cargo, upgrading utilities, lighting and pavement, building new modular office space, utility enclosures and restrooms and improving on-dock rail capabilities.

When completed in 2019, the terminal will be able to handle up to 4.6 million metric tons of cargo annually.

"It opens us up to new prospects in the market looking for that flexible area," said director of maritime Joel Valenzuela. "We currently have a list of six shipping liners or terminal operators in talks to use the area. Between those top prospects, there will be at least two or three that will come to fruition."

The port is also planning a rail expansion project at its National City Terminal, a 135-acre complex operated by Pasha Automotive Services.

The project, which is under environmental review, involves doubling that on-dock rail capacity by connecting existing tracks to an underused rail facility adjacent to the terminal.

"That's pretty exciting because there's not a lot of growth potential in terms of increasing the footprint because ports are landlocked, but if you increase the throughput, that's where you get your growth," Valenzuela said, adding that Pasha has been experiencing dramatic growth in recent years.

"They're back to pre-recession levels and have been consistently exceeding 400,000 units a year in imports, which is the largest in the West Coast, and their portfolio continues to grow," he said.

The port of San Diego is planning a rail expansion project at its National City Terminal, a 135-acre complex operated by Pasha Automotive Services. Photo Courtesy of Port of San Diego.

The port is also home to Dole's fresh fruit weekly service from Latin America to San Diego. Dole, whose sole West Coast distribution of bananas, pineapples, mangoes and other fresh fruit is in San Diego, recently replaced its three vessels with larger ones that allow for 45 percent more capacity.

San Diego's cruise business is also in an upswing and is expected to see a 23 percent increase in business next cruise season because cruise lines are returning to the Mexican Riviera as an attraction, Valenzuela said.

"In the next 10 years, we will solidify the diversity of portfolio of cargo that we have in terms of bookings," Valenzuela said. "For 10th Avenue, our three core capabilities are refrigerated container, bulk products and project cargo/breakbulk, so within those three commodity types, I think we're going to see a larger diversification of customer base and liner services. With respect to the National City Terminal, with the improvement of the rail and terminal improvements, it will be an efficient, more robust automobile process area."

 
 

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