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Port at a crossroads

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Articles - April 2014
Thursday, March 27, 2014
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Port at a crossroads
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Port Slideshow

BY LEE VAN DER VOO
PHOTOS BY JASON KAPLAN

0414 port popoldgrainphoto 
 Photo from the Oregon Historical Society

The photo was taken in 1940. And while that grain hose looks like the corrugated arm of some retrograde, midcentury robot, it was an enormous technological revolution in its day. It’s called an airveyor — a marriage between a vacuum cleaner and a conveyor belt. It came after steel ships revolutionized the waterfront, but before the marine container shifted global trade forever.

The era of its conception is a lot like today: a time of change. Except today’s technological revolution looks less like robots and more like people. In fact, it is people. Fifteen million of them passed through the Portland International Airport in 2013. When you see people sloughing off their belts and shoes at the security gates, bleeping through the metal detectors, it’s hard to imagine them as anything other than fellow souls patiently trying to get where they’re going.

But as the United States awakens to the knowledge that 95% of the world’s customers live elsewhere, some of the best growth commodities this town, and much of the country, have to offer are ideas and talent. In other words: people.

As we enter an era where we are our own growth export, other factors are impacting the trade environment. The United States is on the cusp of an energy revolution. Dovetailing with rising wages overseas, manufacturing may move home. In the metro region, those global shifts converge at the Port of Portland.

Though change is a constant there, it is particularly obvious these days, evident in the outsourced management of marine containers, the sometimes frantic efforts to retain carriers, and disputes over land and labor.

From the outside, the Port of Portland seems to be losing a lot of battles and its foothold. Critics say it’s fallen out of step with a community that’s increasingly focused on livability. But you have to take a broad view to see what’s really happening: macroeconomic shifts that too much squinting obscures.

The world is changing, leaving the Port of Portland at a crossroads. As its executive director, Bill Wyatt, looks toward retirement, and the business community takes stock, the Port is reorganizing and retooling for a new era, asking how to become a port of the 21st century.

The Port of Portland was born in a similarly transitional time in 1890, when grain was king and moving things was the heart of the economy. This used to be a private industry. Wooden ships hitched up to private docks that cropped up on the Willamette River. Oregon City, Vancouver, Milwaukie — all wanted to have the best port on the river.

Portland won the race when wood became metal and the private docks briefly floundered, unable to service steel-hulled ships. The city and state paired to buy the stumbling docks, built better ones and stole the river’s trade show for good.

Thus became the Port of Portland. Today it’s still a gateway at the Willamette and Columbia rivers, acts as a vein gathering cargo from upstream and dominates maritime trade in the metro region. While little of what the Port now exports is built here, the economic footprint of its trade is still felt.

Yet while grain is still the Port’s largest export by volume, accounting for 35% of cargo exports, only about 26% of exports from the Pacific Northwest were actually grown here last year. Instead, semiconductors have the biggest economic ripple, accounting for $15.2 billion of the $27.6 billion in goods exported in 2012.

And as the export economy grows, 18.5% of the money flowing from regional exports came from exports that weren’t goods at all, instead stemming from sales of services overseas, digital content and intellectual property. That number underscores how some of the biggest companies in the region are shifting focus from making things to creating ideas.

“We almost have what I call an accidental economic development strategy … I don’t think it was anybody’s strategy to have sort of the Portlandia view of, ‘We’ll build a place that’s so cool that lots of smart people will want to come here,’” says principal economist Joe Cortright of Impresa, Inc., the Portland-based consulting firm.

But in effect, he says, that’s what we’ve got. So as the Port pursues its mission to serve as a gateway to the Pacific, it must do it in a community that is increasingly focused on moving people and ideas, and in a place that is shifting from being a port town to a city where this creative class ethos reigns.



 

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