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Economic and dam related articles

Imports, Dredging Key
to Port of Portland’s Success

by Elaine Shein
Capital Press, December 22, 2004

This month “K” Line will end its container vessel service and keep only its car-ship and bulk-grain service at the Port of Portland. Through the fall the number of containers declined at the port as two major shippers – “K” Line and Hyundai, representing 56 percent of the total container business at the port – withdrew their service this year and left one major shipper. EUGENE, Ore. -- Getting a guaranteed level of imports and deepening the Columbia River channel are the two keys to helping the Port of Portland attract shippers, state Rep. Dave Hunt told Oregon Farm Bureau Federation delegates at their annual meeting.

Hunt, who is also executive director of the Columbia River Channel Coalition, said efforts are being made to get businesses to commit up front to how many containers they will import each year through Portland.

Currently, other ports in Washington and California are being used to import goods and then the products are being trucked into Oregon. He believes these products should come directly to Portland instead.

Hunt added that the growing population of Oregon means “we should have more import demand than what is being manufactured” within the state. Imports can increase as Oregonians increase “what we’re wearing, what we’re eating.”

OFBF delegates expressed their concerns about the loss of two major shippers in the last few months and the continued challenges from environmental organizations that are against the channel deepening.

At the end of this year “K” Line will end its container vessel service and keep only its car-ship and bulk-grain service at the Port of Portland. Earlier this fall Hyundai announced it was pulling out of the port.

Together, the two lines represent 56 percent of the total container business at the port. Only one major shipper is now left.

Explaining the loss of the shippers, Hunt said, “They like imports, because of the shipping costs they pay.”

He said that a container of the Dollar Tree bargain store items imported into the Portland port pays more to the shipper than a load of wheat going out.

He stressed the importance of the Columbia River and the Port of Portland economically to the region and nation.

The Columbia River transports over 33 million tons of cargo each year worth $15 billion. Hunt said the Columbia and Snake rivers provide more than 40,000 jobs with an average annual wage of $46,000. He added that another 59,000 jobs are positively influenced by those rivers in the Northwest. One example was a pest control company who does extermination of bugs in the grain.

There’s “$1.8 billion per year in personal income generated by maritime activity in the Northwest and $208 million in state and local taxes generated by the Columbia River maritime activity,” Hunt said.

“The challenge is the ships have gotten bigger over time.”

Hunt stressed how crucial it is for the Columbia River channel deepening project to move forward in the next few years to accommodate the bigger ships.

The Columbia River Channel Coalition is planning to increase the depth of the channel to 43 feet from 40 feet. While three feet might not seem like a lot, Hunt said it makes a big difference economically to shippers and, ultimately, farmers.

The extra three feet means another 300 or more containers could be put on vessels, and 6,000 tons more bulk cargo such as grain can be put on the ship.

For a port that is No. 1 in the United States for exporting wheat and barley and third in the world for grain exports, the Columbia River and Port of Portland are critical for farmers.

“Six thousand additional tons of grain per ship: that’s why we want to deepen 40 to 43 feet,” Hunt said. If the ships can get the additional wheat, it means a huge difference in shipping costs and affects cost competition.

“The average annual national transportation savings to business and farmers is $18.8 million for 43 feet,” he said. For every $1 spent on the project, the returns would be $1.66, Hunt said.

In terms of regional economic benefits, “business and farmers save $68 million annually by having access to a container port in the Columbia River,” Hunt said.

Recently, Congress approved $9 million to deepen the Columbia River between Portland and the Pacific Ocean. A dredging contract was expected to be issued by summer of 2005 from the U.S. Corps of Engineers. So far the project has received congressional appropriations of $3.5 million in 2004, $2 million in 2003, and $4.5 million in 2001.

For the fiscal year 2006, $40 million more is being requested in appropriations, with another $40 million requested the following year to complete the project.

The project is expected to cost $150 million, with Washington state and Oregon contributing $27.7 million each.

Dredging the Columbia River is not new, and dates back to the 1860s. There remains annual maintenance dredging.

About 54 percent of the navigation channel needs deepening from the mouth of the river to Portland-Vancouver, Wash., or about 3.5 percent of the 106-mile stretch of the river, according to the Columbia River Channel Coalition. “It’s not just a big scoop taking three feet all along,” Hunt said. The technology is better than it was in the 1860s, and a lot of care is being taken to meet environmental concerns.

“I’ve never seen a project with so many environmental approvals connected to it,” Hunt said. State and federal approvals were granted earlier this year.

“These approvals have been granted … I’m an advocate for this project, so don’t believe me when I say it’s environmentally responsible,” Hunt told delegates. He told them to talk to those environmental agencies that gave the “environmental stamp of approval.”

However, there remains a federal legal challenge against the channel deepening that has included in it “every issue including the kitchen sink” and Hunt called them “bogus allegations” that he believes have been already addressed.

The channel deepening project is “legally defensible” and needs to be resolved so work can begin in late spring next year on the river after 15 years of planning the project. He warned that if the project’s opponents win their legal challenge, it could also impact current maintenance dredging on the river.

The standard these opponents want is to return to river to the condition it was in when explorers Lewis and Clark first saw it. “We don’t want the economy that was here when Lewis and Clark were here,” he said.

When questioned by a delegate on how is it possible that “greenies” can get people to be against the project, Hunt said the coalition and its supporters “really cannot let up” on the facts of the economics on the Northwest to influence support. He repeated several times that the project will save money, is environmentally sound and economically beneficial.

Elaine Shein is based in Spokane, Wash.
Imports, Dredging Key to Port of Portland’s Success
Capital Press, December 22, 2004

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