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Easing River's Economic Grip

by Elaine Williams
Lewiston Tribune, November 7, 2004

Shipping down Snake and Columbia system not considered crucial

SPOKANE -- During the debate over the lower Snake River dams, Potlatch Corp. workers fretted about losing their jobs if the dams were breached to help salmon.

They testified at the 2000 U.S. Army Corps of Engineers hearings in Clarkston about dam breaching.

About 200 honking cars, trucks and motorcycles drove down 21st Street that year to draw attention to the issue in a rally organized by the Pulp and Paper Workers Resource Council.

So this summer's announcement the Port of Portland was losing its last container shipping line with direct service to Japan should have been a thunderbolt.

Japan is Potlatch's largest Asian customer for paperboard, one of the only products Potlatch exports on the river system.

Instead it caused barely a ripple.

It's not just because the Port of Portland has found a substitute in Hanjin, which is adding bigger ships and a direct call to Japan.

Potlatch is prepared to weather increasing unreliability about shipping on the Snake and Columbia river system, says Pendleton Siegel, Potlatch's chairman and chief executive officer.

Potlatch's dependence on the Snake and Columbia river system has diminished dramatically.

Starting in 2002, Potlatch switched from using the Port of Portland to ports in the Seattle-Tacoma area as the chief transfer point for its pulp and paperboard heading to the Pacific Rim.

Potlatch hauls its products to Washington's west side by truck.

Other factors could make it harder for Potlatch to use the Port of Portland, Siegel says.

For the newest, largest, most cost-efficient ships to call on Portland, the Columbia River channel needs to be deepened from 40 to 43 feet between Portland and the Pacific Ocean.

It still faces a lawsuit from an environmental group.

Potlatch officials also are concerned about delays in getting the Port of Lewiston dredged.

The channel is supposed to be 14 feet deep, but in places it's as shallow as 11 feet.

That project also is tied up in litigation.

Even so, Potlatch would like to be able to return to the Port of Lewiston and Port of Portland, says Michael Sullivan, Potlatch's corporate spokesman in Spokane.

"The only reason we're not using them more is because we were forced out,'' Sullivan says.

The costs are lower and the paperboard is handled less, which improved the chances it arrived to customers in good shape, Sullivan says.

Potlatch officials said in 2000 their transportation costs would climb $6 to $10 million annually without river barging.

Sullivan says trucking paperboard to the Puget Sound is still expensive, but since pulp and paperboard is doing better, it's easier to absorb the expense.

Workers did have plenty of reason to be concerned about their jobs in 2000. Starting in 2001, Potlatch reduced its north central Idaho payroll by about 450 positions, including about 200 with the closure of its Jaype plywood mill in Clearwater County.

But the downsizing was about making operations more efficient, not a reaction to what was happening on the river.

The dams still have value to Potlatch, even if it isn't barging.

The system Potlatch uses to release its wastewater into the Clearwater River is designed for slackwater conditions.

Potlatch officials have said adjusting that for a free-flowing river could cost millions.

And the dams have a vital role to play in the economy by providing an alternative to rail and highway transportation and generating power, Siegel says.

Plus the dams aren't hurting salmon, Siegel says, noting the populations are thriving.

Elaine Williams
Easing River's Economic Grip
Lewiston Tribune, November 7, 2004

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