Regional Report: Columbia River
Containers Return, Soda Ash Increases, Grains Vulnerable
June 1, 2018
The Columbia River saw 1,533 ship visits in 2017 according to the Merchant's Exchange, comprising 520 grain vessels, 176 automobile ships, 106 soda ash ships, and 95 log carriers. These numbers represent a slight drop from 2016's bumper year, but tonnages appear to be mainly equivalent. Some commodities showed slight increases; soda ash rebounded well, up 11 percent to 106 ships.
Soda ash exports in Portland are handled by Kinder Morgan at Portland's Terminal 4. The industrial mineral is mined in Green River, Wyoming – home of the largest known naturally occurring deposits in the world.
International Raw Materials' new lease at the Port of Longview's Bridgeview Terminal will add a new outlet on the Columbia for bulk minerals like potash, soda ash, and other fertilizers.
After a major investment by Canpotex Limited at Portland Bulk Terminals, the company announced the completion of its nearly $150 million terminal expansion at Terminal 5 in the Rivergate Industrial District in March 2018. The project includes a new shiploader, a newly constructed warehouse with a capacity of 110,000 metric tons and an upgraded loading system that can transfer potash directly from trains. "The improvements we have made will enhance our ability to reliably ship our potash overseas and meet customers' needs," said Ken Seitz, President and CEO of Canpotex – a joint venture of three Saskatchewan potash producers.
These improvements are expected to double the plant's existing capacity of 3.5 million MT per year. "This enables Canpotex to be agile and responsive to our international customers' demands for high quality, Canadian potash fertilizer from Saskatchewan," Seitz explained. The warehouse is the longest wooden building west of the Mississippi. Wood is used because potash is corrosive to steel. All these developments will reinforce Portland's position as the largest exporter on the US west coast for bulk minerals.
The auto import/export business through Portland and Vancouver has shown impressive strength with the combined number of imports and exports across the Port of Portland's Terminal 6 and 4, adding up to 314,000 vehicles – a 7.8 percent increase from 2016. These consisted of 237,000 Toyotas, Hondas and Hyundais on the import side and 87,000 Fords on the export side. The Fords are manufactured in the Midwest and arrive via rail for trans-loading to auto carriers bound for Asian customers, primarily China and Korea. Portland was the top auto exporter on the west coast for a second year. "Our export boom highlights the strong demand for American-made cars in Asia," said Keith Leavitt, the Port's chief commercial officer. "This translates into more than 600 direct local jobs for dockworkers, processors and others," he added.
Although it is only a monthly service at present, the return of scheduled container shipping has brought more activity back to Portland's Terminal 6. Swire Shipping operates a fleet of multi-purpose ships that can carry a mix of containers and breakbulk cargo and made its first call on the Columbia in January 2018. Swire is a brand of the China Navigation Company Pte Ltd with the head office in Singapore and specializes in "niche, regional, multipurpose shipping services" from ports in the Asia – South Pacific region, including China. Among cargoes loaded at the Port of Portland's Terminal 6 were Western Star trucks from Daimler North America manufactured at their Swan Island plant in Portland destined for the Australian/New Zealand market.
Curtis Robinhold, Port of Portland's new executive director, considers this a critical first step toward restarting full container service. "We very much appreciate the growing partnership we have with Swire," he stated. "Most importantly, this signals that T-6 is open for business," He was unanimously elected by the Port Commission a year ago to replace long-time director Bill Wyatt, after holding the post of deputy director since 2013.
The Port is supporting BNSF Railway's intermodal service to move containers to and from Terminal 6 to the Puget Sound ports. Cosco and CMA CGM are currently using the service, which moved 2,181 containers in March, according to Ken O'Hollaren, the port's marine marketing director.
In 2017, value of the Port of Longview's marine trade totaled $2.72 billion from 302 ship calls – 43 percent from soy, with smaller percentages to corn, logs and wheat. Volume outbound of agricultural products was 7.2 million metric tons, accounting for nearly half of the ship visits. Most of the 95 log ships visiting the Columbia come to Longview, plus vessels loading various other bulk cargoes that bring the overall export volume for 2017 to 9.325 million metric tons, a 50 percent increase over 2015.
This year has already seen a dramatic increase of over 25 percent through the first quarter, and the Port of Longview Commission will make key decisions regarding development of its properties at Barlow Point, Willow Grove Park and the Industrial Rail Corridor. In February, the Port was given the Partnership Award from Maritime Fire and Safety Association in recognition of the Port's impact in advancing emergency response and preparedness in the region. The Port participated in Command Training in September, as well in an Oil Spill Response Preparedness Committee. Additionally, Port representatives spoke at and attended the Fire Protection Agencies Advisory Council Summit and provided tours of the Port facilities and vessels throughout the year.
"The Port has played a crucial role in educating first responders on the intricacies of marine operations," said Lt. Don Doyle of the Longview Fire Department, who is also the Fire Protection Training Coordinator.
Millennium Bulk Terminals
The fate of Millennium Bulk Terminals' planned $680-million coal terminal in the City of Longview appeared to have been finally settled when environmental opponents won a series of votes over the winter, but the company is still optimistic that the project will eventually be built. Seven years after the project was first proposed, the battle continues to build North America's largest coal export terminal to handle up to 44 million tons of coal a year. Millennium's parent company, Lighthouse Resources, is pursuing a new strategy to sidestep state regulation, including a federal lawsuit against Washington Governor Jay Inslee. It has also been reported that they are attempting to use NAFTA negotiations to bypass state agencies. Bill Chapman, Millennium's president and CEO, said: "There's clearly a pattern of state interference with federal, interstate and foreign commerce, and that's exactly what the Constitution prohibits."
The Port of Kalama
The Port of Kalama has developed considerable economic muscle for a town of only 2,500 people. It contributed more than $355,000 in taxes in 2017 and had more than 200 ship visits, down slightly from 2016. The two wheat terminals, Kalama Export and Temco, loaded 181 ships and continued to provide a foundation to support the port's continuing diversification. A new 110,000-square-foot industrial facility has secured its first tenant – Bridger Steel, a manufacturer of panel systems – to occupy 30,000-square feet of space for office and warehouse use, as well as a truck loading zone at Kalama River Industrial Park.
The latest McMenamins property, Kalama Harbor Lodge, opened in April on the river's edge and is already attracting visitors. The McMenamins company operates nearly 50 brewery, pub and hotel locations in converted buildings around the Northwest, but the Kalama Harbor Lodge is only the third time McMenamins has built a completely new structure. It is a tropical-style building inspired by the Hawaiian heritage of John Kalama, an employee of the Hudson's Bay Company. The port planning includes construction of a small outdoor venue and ongoing improvements to the marina and parks, including a small outdoor amphitheater.
The Port and Cowlitz County have completed the scoping process for the Supplemental Environmental Impact Statement (SEIS) for a Northwest Innovation Works, LLC–Kalama (NWIW)-proposed natural gas to methanol production plant and storage facility on approximately 90 acres of the port's riverside property. The environmental opposition to this project now appears to be focusing on the totality of greenhouse gas emissions involved from natural gas field to Kalama and then the emissions from shipping the methanol products to Asia.
Port of St Helens
The Port of St. Helens (downriver from Portland) welcomed Cascades' plan to build a 300,000-square-foot, state-of-art paper tissue converting plant in Scappoose, which opened last summer. The fully automated production lines make it the most modern of the Canadian company's 19 plants in Canada and the US with a total cost of $64 million. The factory runs 24 hours a day with fewer than 80 workers managing the machinery that converts 3-ton paper rolls from its PRO pulp mill at the St. Helens waterfront into tissue products. The output will rise this year to about 6-million cases per year.
The US Gypsum plant and dock in Rainier, Oregon – opposite Longview – is not on port property, but is also in the news. USG serves construction markets around the world and is the subject of a takeover attempt from the German company Knauf, who made a $5.9-billion bid in March 2018. This was rejected, but Berkshire Hathaway holds a 31 percent stake in USG and after discussions, the USG directors have now authorized its management to commence negotiations with Knauf.
Port of Astoria
Astoria saw a 50-percent increase in its unique mix of visiting cruise ships, log carriers, and research vessels with 44 ships arriving in 2017. Half of them were cruise ships, and 2018 has exceeded that number with 26 scheduled for 2018. To ensure there is enough depth for these ships, the Port of Astoria dredges every winter to remove silt carried downstream by the Columbia, but recently learned that its outdated 46-year-old Navy-surplus suction dredge is not as efficient as expected. Using modern sounding equipment, a specialist discovered that the dredge might have been removing only about half as much spoil.
The Port leased a small transportable dredge from the Port of Ilwaco on the Washington side of the estuary to work inside the marina. It is now considering outsourcing its dredging along the exterior berths on the faces of Piers 1-3.
Hyak Maritime, the new owner of the North Tongue Point commercial property, continues to make progress in attracting new tenants like local marine construction company Bergerson Construction Inc. The WCT Marine boatyard has invested in upgrading their haul-out trailer, which now boasts 72 wheels and a 300-ton capacity and is available for voyage repairs, inspections and upgrades of all types.
More Data Centers for Umatilla County
Data centers arrived on the mid-Columbia scene in 2011, and since then Amazon – doing business through a holding company called Vadata – has continued to expand at the Port of Umatilla and in the Port of Morrow at Boardman on the south shore of the Columbia River, south of the Tri-Cities. These server farms that support cloud-based computing require low-cost power and plentiful water for cooling, which this region is able to supply.
Vacant land is also necessary because these facilities must be separated by several miles to isolate risks and achieve redundancy. Each data center campus provides backup in case one of them shuts down in an emergency. The projects cost hundreds of millions of dollars and have given a huge boost to the county's tax base, explained Carla McLane, the planning director for Morrow County. Each new center provides roughly 40 jobs with an average salary of over $60,000 per year.