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Heavy Lifting at the Port

by Jonathan Nelson
The Columbian, December 24, 2006

Alastair Smith cringed at a recent Port of Vancouver meeting when Commissioner Brian Wolfe playfully called the director of operations "All-star."

The alteration of Smith's name came as the three-member commission reviewed 2006 marine business that, through November, tallies 4.7 million metric tons of incoming and outgoing cargo, a 30.6 percent increase from last year and more than the total tonnage of 2005. Ship calls and several cargo categories are either at or above record levels set in 2005. "It was an extraordinary year," Wolfe said.

Smith deflected the praise, saying it was a combination of smart decisions by port staff and commissioners with the right market conditions. In some respect, it's also the culmination of years of work by the Vancouver port to set itself apart from other ports in the region.

The marine business is vastly different at Vancouver than in Portland, Tacoma and Seattle, where containers -- those 20-foot-long metal boxes that are easily transferred from boat to rail or truck -- are king.

Vancouver has evolved into a niche port that handles cargo that is bundled and shipped in a variety of ways, but not in containers. The industry term is "break-bulk" cargo.

Vancouver's year appears to be outpacing neighboring ports on a percentage basis. Bucking the trend

Tonnage through November at the Port of Portland is up 2.5 percent. In Tacoma, the tonnage is down 8.3 percent. And in Seattle, the number of containers in and out of the port is up 2.5 percent.

The reduction in container traffic to the Portland, Seattle and Tacoma ports is due in part to shipping companies redirecting ship traffic to Los Angeles and Long Beach. Congestion at the two California ports a few years ago forced shippers to send more cargo through the Northwest. The problem has since been solved.

Vancouver has been able to expand its business by spending millions of dollars to improve docks and build warehouses.

That has resulted in new business and long-term contracts with shippers. It has also helped the port capitalize on shifts in the volatile commodities market.

For instance, copper concentrate prices were at rock bottom a few years ago.

The price has rebounded and long-dormant mines are being reactivated. Vancouver has cornered a portion of the market by adding warehouses to keep the material dry before shipment, a crucial point in the delivery chain.

Smith expects marine traffic next year to at least equal 2006's performance.

Grain outlook

Grain, which represents about 70 percent of the port's annual marine business, is expected to be stable in 2007 along with copper concentrate.

Windmill equipment deliveries are likely to grow as new projects are developed for eastern Washington and Oregon. The Vancouver port has become the favored delivery point for windmill manufacturers.

That preference convinced port commissioners earlier this year to buy a $3.2 million portable crane. The investment looks even smarter now that the crane is booked for 10 months next year, double the use the port initially projected.

Subaru is expected to keep its auto shipments steady, but Smith said there is a possibility of increased deliveries as the automaker considers bringing its new B9 Tribeca through Vancouver.

Lumber, steel weakness

The only weak spot will be lumber and steel deliveries, which are expected to drop by 15 percent next year due in part to a softening of the housing market.

Smith concedes there is an element of luck involved in the port's decision making, but the vast majority of moves are determined by constantly monitoring the market. Just like the port did this year.

"It wasn't just sticking a tail on a donkey," Smith said.

Did you know?

Jonathan Nelson
Heavy Lifting at the Port
The Columbian, December 24, 2006

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