Port at a crossroads

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Articles - April 2014
Thursday, March 27, 2014

There have been gains in the past year for port tenants and traditional industries. In 2013 a new 50-year lease with the Air National Guard secured 1,500 jobs and $44 million in salaries to guard members in Oregon and Washington. A new Daimler headquarters added 400 jobs. Ajinomoto relocated its consumer-foods division from Los Angeles to Portland, building a 9,000-square-foot addition and growing to 216 jobs. Kinder Morgan expanded its pot-ash facilities, reflecting small gains in bulk exports, and Columbia Grain plans new facilities to the tune of $40 million.

The Port has also diversified. New Port land investments have been completed or are thriving: Cascade Station for retail, the PDX Logistics Center for light industrial, the Troutdale Reynolds Industrial Park for large-lot industrial and the Gresham Vista Business Park. Together they’ve added an estimated 1,405 acres for industrial and business development, and while some critics disagree about whether the Port should be involved in economic development, its involvement is increasing the number of places industrial businesses can locate and is diversifying port revenue.

0414 port orbiz port 0036 
 Port of Portland executive director Bill Wyatt
//by Joseph Eastburn

Wyatt also counts new airline agreements and the ICTSI contract, a 25-year deal that eliminates port exposure to the increasingly volatile container market, as success stories. The lease with ICTSI sprang from Port layoffs in 2004, in which one third of the Port workforce was let go when the marine container trade lost two-thirds of its business over 45 days. “It’s not that the picture is entirely rosy,” he says. “We can always use more working capital and more capital to invest in the … equipment because the thing about the Port, whether it’s the airport or the seaport, everything we do is really expensive,” says Wyatt. “But we have eliminated a substantial part of the volatility, and that’s really important. Because if you go back to 2004 and think about the transportation industry, virtually all of it was incredibly volatile — airlines, trucking, railroads, shipping — and even today, it is still very volatile. We had direct exposure to all of that. We’ve been able to limit it.”

Four years ago, Wyatt also reorganized Port administration to put maritime business and the airport under one roof. The strategy readies the Port for 63-year-old Wyatt’s retirement in three to five years. He brought Curtis Robinhold, Governor Kitzhaber’s chief of staff, in as deputy to ease the transition. Robinhold is slated to take the Port’s reins next year. Meanwhile, the entire administration is expected to put heavy emphasis on air transit moving forward, a service that, since 9/11, has grown exponentially, in large part because of Port recruitment. 

In that arena, the Port has seized on the growing need to move people with success, expanding from only one international flight to Vancouver, B.C., daily in 2001 direct access to Tokyo, Amsterdam, Calgary and to dozens of destinations in the U.S. The changes underscore how, even in an economy in which the metro region is focused on idea export, the Port’s role will remain strong.

That’s important, because more than a fifth of the $34 billion in regional exports — $6.5 billion — came from the export of services in 2012, according to the Brookings Institute. Translation? It came from exporting people — to face-to-face meetings with overseas clients. To factories in Vietnam that build their ideas (think Nike). To job sites in Abu Dhabi, where architects design sustainable communities for people who don’t even live there yet (SERA Architects).

“When you look at growth of the middle class and emerging economies all around the world… businesses at a local level, at a metro level, city and local governments, and states have to fundamentally think about doing business internationally,” says Sean Robbins, CEO of Greater Portland, Inc., a regional economic development partnership. As they do, he says, the Port of Portland is also making the shift to exports that “don’t necessarily always come in the form of a container ship.” 

Economists have been saying something like this for years: that the cost of actually moving goods is so nominal, it’s no longer important where companies locate. They tend instead to collect around places where talented people want to live.

It’s within this framework that the Portlandia economy has begun to nip at the heels of the region’s traditional exports. And it’s an indicator of how much our world is changing.



 

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