the film
Economic and dam related articles

Shippers Weigh Container Options

by Richard Read
The Oregonian, August 16, 2004

The loss of two carriers at the Port of Portland sends planners to work
examining new routes for area importers and exporters

Oregon exporters, jolted by last week's withdrawal of the second container shipping service from Portland in a month, will meet Aug. 26 to consider an idea that once appeared far-fetched.

Why not bypass the beleaguered Port of Portland, some ask, and instead barge the big metal boxes out the Columbia River and around the Olympic Peninsula to Tacoma? There, a fast-growing mega-port continues to attract the kind of huge vessels that carry goods to Asia.

The fact that exporters would entertain the barging idea reveals the alarm over the impending departure of "K" Line and Hyundai Merchant Marine, steamship companies that together account for two-thirds of the Port's container traffic. And the fact that Port officials don't dismiss the suggestion, despite serious doubts, shows they are ready to try almost anything.

"If there is a better or cheaper or more stable way, we're all for it," says Bill Wyatt, Port of Portland executive director. "I'm not going to stand in the way."

Last week's decision by Tokyo-based "K" Line to pull out of Portland by December, following the withdrawal of Seoul-based Hyundai as of mid-September, leaves the Port with just one trans-Pacific container line, Hanjin of South Korea. Some experts say Portland and other smaller, upriver ports should admit defeat for now in the cutthroat global container business and fall back on their strengths -- shipment of autos, grains and minerals, in the Port's case.

"It's tough for the longshoremen and it's tough for the Port, but sadly it's one of the many adjustments that have to be made," says Brent Dibner, president of Dibner Maritime Associates, a Massachusetts consulting firm. "The big new container ships are so big that they are like supertankers and they will only go to a small number of ports" in the years ahead.

That perspective could undercut the case for deepening the Columbia River shipping channel to accommodate larger container vessels and grain ships. President Bush said in Portland Friday that he was asking Congress for $15 million to begin the dredging project, which environmentalists and budget watchdogs oppose.

Port officials dispute such a pessimistic view of Portland's future as a container hub, and they advocate deepening the channel to keep Oregon competitive, even as they scramble to replace "K" Line and Hyundai.

The officials say the Port of Portland remains in the container business, despite losing money on it each year, mainly to give Oregon exporters access to foreign markets. If Portland stopped handling containers, they say, trucking charges to Tacoma and other big ports would soar, devastating many of the state's agricultural exporters.

It's those rural exporters that might primarily benefit from barging containers to ports in Puget Sound and possibly California. The Agriculture Ocean Transportation Coalition, a Washington, D.C.-based exporters' group, is organizing the Aug. 26 meeting in Portland for shippers, port officials and barge operators.

"In order to move to foreign markets and be competitive, they must have affordable transportation," says Peter Friedmann, the group's executive director and a lobbyist for Northwest exporters and ports. "That's in jeopardy right now."

John Kratochvil, Oregon Agriculture Department international trade manager, is circulating a draft report on the barge idea that he wrote after conducting an extensive federally funded study.

Kratochvil, a transportation economist, says he expected the withdrawal of container lines from Portland after seeing investment by Hyundai, Hanjin and others in ships too large even for a deepened Columbia River channel. He calculates that containers could be loaded on barges and hauled by oceangoing tugs to Tacoma, for example, cheaper than by truck.

"I went to Europe," Kratochvil says. "They can move 40 percent of all their freight on coastal waterways -- that's proof."

Dale Sause, president of Sause Brothers Inc., says the concept of moving freight to Tacoma is interesting, but he has yet to review Kratochvil's report. The Coos Bay company operates tug and barge services, such as carrying containers between Mexico and Los Angeles.

Sam Ruda, the Port of Portland's marine director, doubts that barging would be cost-effective but has read the draft. "It's somewhat incomplete," Ruda says.

Boston, Tacoma compare

The Port of Boston has used feeder barge service successfully.

Boston, which like Portland initially failed to embrace modern container shipping, also saw steamship lines withdraw during the 1990s. Boston temporarily boosted barge service, moving containers to and from the larger Port of New York/New Jersey. Meanwhile, port officials enlisted the Boston area's biggest shippers, ranging from Gillette to Reebok, and used them to help persuade China Ocean Shipping Co. to launch direct container service to China.

At the rapidly expanding Port of Tacoma, officials are intrigued by the Columbia River barging idea. Tacoma, which handles five times Portland's container traffic, already draws considerable cargo from Oregon by truck and train.

Tacoma, North America's fastest-growing port, is building new quarters for the Evergreen America shipping line, which pulled out of Portland in 2001. "K" Line will soon more than double its terminal capacity there.

Doug Ljungren, Port of Tacoma business planning manager, avoids gloating over that port's 51-foot water depth, compared with the 40-foot-deep Columbia River channel that would be deepened by 3 feet under the federal plan. Ljungren agrees with Port of Portland officials who say West Coast port congestion will eventually push container lines back to Portland. But he believes it will take far longer than the officials expect.

"It's going to be a while before Tacoma runs out of capacity," Ljungren says. "Not that it's our intent to be a pain to Portland, by any means."

Richard Read
Shippers Weigh Container Options
The Oregonian, August 16, 2004

See what you can learn

learn more on topics covered in the film
see the video
read the script
learn the songs
discussion forum
salmon animation