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Port of Portland Bounces Back by Libby Tucker, Associated Press KGW, August 13, 2006

After more than a year of financial uncertainty, the Port of Portland has turned the tides.

Aggressive marketing efforts by the port to recruit new carriers and strong support from the state to invest in port infrastructure have brought one of Oregon's most critical economic engines back to life, analysts and government officials say.

The port's rosy outlook today contrasts sharply with its dismal state in 2004, when two of the port's three major ocean carrier shipping lines withdrew their services.

The carriers' departures left the port with few options to pay down its debt and make needed infrastructure investments. Container volume dropped by 42 percent between 2004 and 2005, and the port's future as the state's gateway to international trade was uncertain.

But the arrival this spring of two new container carriers - Taiwan-based Yang Ming Lines and Zim Integrated Shipping - signaled a turnaround for the port. Yang Ming expects to move 23,000 containers each year through the port; Zim will add 172 new jobs to the region.

"They were suffering, and all of a sudden they've been able to recoup some of that loss by securing those additional services," said John Martin, president of Martin Associates, a transportation consulting company that provides economic and planning services for the majority of U.S. ports. "It's amazing to recover that service. They should be commended."

Topping off the port's success was the announcement in July of $16.7 million for three projects through ConnectOregon - the $100 million lottery bond-backed initiative passed by the 2005 Oregon Legislature to improve rail, marine, aviation and transit infrastructure in the state.

The ConnectOregon funds will pay for improvements to a rail yard, modernization of the Terminal Four grain facility and the purchase of the port's fourth crane capable of unloading ships unable to pass through the Panama Canal.

At the time ConnectOregon was proposed by Gov. Ted Kulongoski, state legislators were leery of a bill seemingly meant to bail out the struggling port.

"Quite a few (representatives) were concerned that it was a Port of Portland issue, not a statewide issue," said Sen. Betsy Johnson, a Scappoose Democrat in the state House of Representatives. "I don't see this as the port getting an unfair share. There's a clear relationship between goods moving through Portland and the state economy."

Martin attributes the port's success to its "proactive" approach to recruiting new carriers by marketing its adjacent industrial land as prime real estate for warehousing and distribution, its abundant terminal capacity and its customer service.

"We've (practically) lived in China for the last six months," said Bill Wyatt, the port's executive director. "There's a lot of recruitment activity that goes into this."

Containerized cargo volumes through U.S. ports are expected to triple by 2020, according to the American Association of Port Authorities.

Portland is one of a handful of West Coast ports, including the ports of Tacoma and Seattle in Washington and the Los Angeles and Long Beach ports in California, that competes for a piece of the economic pie.

"We've had to refocus our strategy and capitalize on the lack of West Coast infrastructure and the need for importers to come to this country," Wyatt said.

To meet increasing demand for trade, U.S. ports are estimated to spend $2.1 billion a year on capital investments, according to the American Association of Port Authorities.

But although most East Coast ports receive significant funding from state governments, the same is not true of West Coast ports.

"(State investment) is very important because of the tremendous economic impact the port generates to the state," Martin said. "It's clearly a public entity."

State support helps ports attract private investment, which has become increasingly common among carriers across the country, Martin said.

The Port of Portland doesn't receive any tax dollars for its operating funds. But the port did receive the largest allocation of ConnectOregon funds, an indication of Kulongoski's commitment to the port's revival. The state's role in supporting and promoting the port was also "part of the puzzle," Wyatt conceded.

"This ConnectOregon announcement ... is really important because our customers read this stuff, they pay attention to who's building tracks and buying cranes," Wyatt said. "It gives them the sense that we're committed for the future."

Related Sites:
American Association of Port Authorities: www.aapa-ports.org
Port of Portland: www.portofportland.com
ConnectOregon: www.oregon.gov/ODOT/COMM/CO/index.shtml