Regional Report: Columbia River
Bulk Cargos Break Records
June 1, 2017
After the wettest winter on record, the lower Columbia River has been in a high-water condition throughout the spring, but has avoided any significant flooding. However, there has also been a flood of information from the major ports as they position themselves to cope with challenges that include the continuing attempts to open new energy terminals, uncertainty over President Trump's trade policy, changes in the economics of international shipping, and environmental demands.
Together, Portland, Kalama, Vancouver, and Longview comprise the leading grain export gateway to Asia. Portland terminals showed a positive uptick with more than 400 ship calls, up from 350 in 2015, with grain totaling over 10 million short tons, a 20-percent increase from 2015 that made it the top wheat export gateway in the US for 2016. Bulk minerals were steady at 5 million tons.
Automobile movements were up from 262,874 to a record 291,242 – mainly Hyundais, Toyotas, and Hondas. More than 50,000 of those moves were exports to Asia, making the Port of Portland the leader on the west coast for auto exports. The port estimates each vehicle move contributes $275 to the local economy. The Port and Auto Warehousing Company recently secured state grant funding for a $7 million expansion of auto handling facilities in the Rivergate Industrial District near Terminal 6. Plans call for a new, 18.9-acre storage and staging yard to support vehicle exports.
The spring news season kicked off on March 31, 2017 when ICTSI Oregon, Inc. the operators of the Port of Portland's Terminal 6 ended its 25-year lease mutual agreement in return for $11.45 million in compensation to the port. The last full year of container operations, 2014, saw 165,000 TEU's moved.
"ICTSI Oregon will continue to address the labor issues that gave rise to its decision to enter into this agreement and will pursue its legal claims against the ILWU." stated ICTSI Oregon's CEO Elvis Ganda.
"In many ways, this is where the market is headed and what we have to contend with in Portland. It's bigger ships coming in and smaller ships getting pulled out," explained Randy Fischer, senior analyst at the port. Of the 12 lines that still call on Northwest ports, only eight have container ships small enough for Terminal 6 to handle. "This is the best opportunity to launch a new strategy to restore carrier service for Oregon and Northwest shippers," said Bill Wyatt, the port executive director, shortly before his planned retirement on June 30.
The port commission was interviewing the three finalists to succeed Wyatt:
Jonathan Daniels, Executive Director and CEO, Mississippi State Port Authority, Stephanie Dawson, Chief Operation Officer, Port Authority of New York & New Jersey and Curtis Robinhold, Deputy Executive Director, Port of Portland. The Port Commission will vote on a final candidate for our executive director on May 23.
There are a few vocal critics of this process: Bob Sallinger, conservation director for the Audubon Society, said a two-week public comment period on the candidates is "absolutely insufficient." and the port's decision not to bring the two outside candidates to Portland sends the wrong message.
Full Speed Ahead in Vancouver
Across the Columbia in Vancouver, Washington developments range from the appointments of women to two top posts at the port to the demolition of a waterfront landmark, the former Red Lion Hotel to make way for a 10-acre mixed-use development.
Julianna Marler was appointed CEO/Executive Director of the Port of Vancouver USA in February after serving as interim CEO/Executive Director. Previously, she served as the port's CFO and Administrative Officer. Marler is the first female CEO in the port's 105-year history and one of just a handful of female port CEOs in the US.
One of her first tasks was to announce the port's 2016 record of 7.5 million metric tons of cargo across its docks from 410 ships calls – up from the 2015 record of 6.95 million tons. "In nine years at the Port of Vancouver, I've never seen tonnage like this," she said. "It's a testament to the investments we and our partners have made to provide world-class rail and marine services, access to efficient transportation and excellent customer service." Grain continues to be the largest export at the Port of Vancouver by volume, and in 2016 these cargoes increased 17.8 percent over 2015. In addition, Subaru of America landed 87,600 vehicles.
On March 21, the Washington State Supreme Court ruled in favor of the port in an appeal brought by two environmental groups. The court's decision affirmed the Washington Court of Appeals' ruling that found the port's lease with Vancouver Energy for a proposed crude oil transfer terminal complies with the State Environmental Policy Act (SEPA).
"We're pleased with the court's ruling," said Marler. "By ensuring Vancouver Energy's lease is contingent upon our state's comprehensive environmental review, we continue to comply with the law while performing our mission of attracting industry and bringing economic benefit to our community."
Early in May, the Port hired Elizabeth Gotelli to fill Marler's previous post as CFO and Administrative Officer. Her past experience includes executive posts with Lacey, Washington and Vancouver. On the waterfront property, the port awaits an official recommendation on its Concept Development Plan for the 10.37-acre Terminal 1 property. Port officials have presented the plan to City of Vancouver land-use hearings examiner Sharon Rice. Her report will be issued by May 18 and the port is expecting a positive outcome.
Longview Attracts Attention
In a record breaking cargo handling year, the Port of Longview moved more than 8.3 million metric tons of cargo across the dock in 2016 from 250 ship calls. This was a nearly 30 percent increase over the 6.4 million metric tons handled in 2015 and an annual record. The EGT grain terminal moved more than 6 million metric tons of primarily wheat, soybeans and corn – the company's best year since opening in 2012.
"This is precisely the tonnage outcome we were aiming for when EGT signed on at the Port," said Chief Executive Officer Norm Krehbiel.
In January, Dan Stahl joined the port as the new Chief Operating Officer. He previously served in an operations capacity at both the Port of Bellingham and Port of Anacortes. "Dan is an outstanding addition to our team," said Krehbiel. "His experience and knowledge of Washington ports provides valuable input to Port operations and business development."
A hiatus in windmill-related shipments ended in November 2016 with a shipment of 160-foot blades, and in April of this year the port handled a shipment manufactured in China by Vestas of 90 blades of 177 feet – the longest the port has handled. Utilizing the Port's two Liehberr mobile Harbor cranes in tandem, the blades were discharged from the Kai Xuan to flatbed rail cars adjacent to the vessel. Each blade required two railcars and was secured by swiveling bases that allow the blades to rotate with each turn the railcars make en route to a wind farm in Illinois. Two more turbine shipments are booked this year.
The Longview area continues to attract ambitious proposals for industrial plants, but Port of Longview's Brooke Hendrickson pointed out that the port has no involvement in either the Millennium Bulk Terminals coal export project or the recent proposal for a bio-fuel refinery. The Washington State Department of Ecology and Cowlitz County have released the final environmental impact statement for the former – the last remaining coal export project still under consideration in the Pacific Northwest. State agencies and Cowlitz County will use the EIS to decide whether Millennium can proceed.
On May 10, the Longview City Council unanimously approved the sale of city lands to Pacific Coast for a fertilizer plant at the Mint Farm Industrial Park. Building the plant would cost between $800 million to $1 billion, and would generate about 1,000 construction jobs, according to the company. When fully operational, the plant would tap into an existing natural gas pipeline nearby and employ 80 to 100 workers. The $1 billion plant will convert natural gas into anhydrous ammonia, a liquid commercial fertilizer for sale to agricultural retailers throughout the Northwest. It could also be piped to a private dock for shipping.
Another energy-related proposal was also made public in May when Riverside Renewables LLC, a Houston-based group, presented its plan to develop a bio-fuel refinery in Cowlitz County, after a rejection early in 2016 of a combined oil, propane and bio-fuel processor. The new $500 million refinery would only process North American seed oil as a low-carbon replacement fuel for diesel trucks.
Kalama: Small Town and Big Port
The city of Kalama has a population of only 2,400, but the Port of Kalama's total vessel calls for 2016 total an impressive 275, with 236 of them grain ships loading almost 14 million short tons. The two grain docks are TEMCO (117 calls) and Kalama Export (119 calls) and these agricultural products come by rail from many states including Oregon, Washington, Idaho, Montana and North Dakota. In addition, more than 340,000 tons of steel coil were unloaded at the North Port.
More than 1,000 people are employed by the various businesses on port property. This number will increase significantly if the state approves Northwest Innovation Works' $1.8 billion plan to build the world's largest methanol refinery. The plant would convert natural gas into methanol, which would be shipped to China for use as a feedstock in the plastics industry. The project is supported by some Kalama residents, but strongly opposed by environmentalists.
On April 18, Washington State Department of Ecology officials said that the application needed an improved site map, and clarification of the self-imposed limit of 972,131 metric tons of carbon emissions per year.
Vee Godley, president of NW Innovation Works, said: "We are confident in the accuracy of our submission but appreciate the need for the review process and will provide any and all information required." The company had until May 19 to submit the requested information.
Cruise Lines Stop at Astoria
Astoria, population of 9,500, at the mouth of the Columbia, continued to attract cruise ships with 25 calls in 2016 and 22 scheduled for this year. Two companies are running sternwheel cruise ships on the Columbia and Snake Rivers this year: American Queen Steamboat Co. with the American Empress, and American Cruise Lines with the Queen of the West. Astoria Forest Products loaded 9 log ships in Astoria with an average capacity of 5-6 million board feet and expects the same number this year. The leased Tongue Point facility has seen an increase in commercial vessel repair by WCT Marine, and the construction of a 57-foot shallow-draft fish tender for the Yukon River – the first new boat ever built in the large WW II seaplane hangar.