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Port at a crossroads

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Articles - April 2014
Thursday, March 27, 2014

That creative-class focus has left the Port without as much local support as it weathers global shifts and grapples with local challenges. Port officials recognize tough issues. For years Port leaders have worried about a lack of available land for existing business expansion and any growth — growth they still hope to lure. And 900 acres that could be used for industrial development are contaminated, tied up in brownfields or within the Superfund site on the Willamette River, which means they’re years away from shovel-ready.

There are new worries. Grain exports were down 18% last year, owing to bans on Oregon wheat by Japan and South Korea following the discovery of GMO wheat in a fallow field. Air cargo carrier Asiana Airlines stopped calling on Portland after consolidating its air freight services in Tacoma and cutting the Port’s nonstop cargo tie to Asia. Auto imports fell 17%. And carriers that barge goods up and down the Columbia River system have faltered in the tough economy.

Topping its troubles lately is that the Port is precariously positioned in the marine container trade. It is the smallest container mover on the West Coast, vulnerable as container vessels get bigger while the Columbia River is still 43 feet deep. The Port outsourced management of that terminal to a Philippines-based company, ICTSI, two years ago, hoping to push an enterprise characterized by Wyatt as “barely break even” into the black.

Labor issues followed, however, while ICTSI pushed for increased automation. Failed negotiations with the unions and subsequent work slowdowns allowed for Hanjin — which carries about 75% of the marine containers that leave the Port — room for a power play. Hanjin’s threats to leave Portland since, likely also spurred by the overcapitalized world that is container carriers, pushed the Port to offer it incentive pay. In March the South Korean shipping line announced it would continue calling on Portland; should the company change its mind, the impacts to smaller, more marginal businesses that can’t afford to ship goods to Tacoma or Seattle could be severe. 

Walt Evans, a former Port commissioner and a lawyer for clients engaged in international trade, says there is always that potential that the Port will lose its container business, especially in light of its upriver location. “They are working hard to make sure those conditions don’t present themselves, and that the carriers are treated well enough that they are not going to be lured away,” he says.

Though he recognizes these issues are unfolding against a backdrop of growing service exports, Evans doesn’t think baristas and filmmakers will ever overtake the regional economy. Indeed, data shows they’re nowhere close, only a growing force.

0414 port bd2f7596Voices tied to the community’s rising livability tide agree the Port will always be an important part of the community, but say it has entered an era where jobs numbers aren’t a trump card over other concerns.

Bob Sallinger, executive director of the Portland Audubon Society, has served on committees related to planning for Port futures and the Willamette River. Through the Audubon Society, he opposed Port development on West Hayden Island.

In part because of changing community dynamics, the port has entered an era where its political leadership must be less insular to succeed, Salinger says. Pointing to its rocky relationships with other ports, sectors and unions — and the recent failure to gain ground in West Hayden Island negotiations, even while the Port invested millions — Sallinger says it won’t be enough for the Port to offer guarantees of jobs and revenue.

Instead, Sallinger believes the Port will have to demonstrate real job creation, and address its impact on neighborhoods and the environment more directly. He believes the Port needs to step up to modern challenges — like a lack of land and the river system’s inability to accommodate ever-larger container vessels — through collaborative efforts with other ports. Otherwise, the Port risks losing focus on its long-term goals as a gateway and getting stuck in local bottlenecks instead. “Pretending it’s not happening is self-destructive in the long run,” he says.



 

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