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Port of Portland Could Soon Face Stiffer Competition by Jonathan Nelson Daily Journal of Commerce, October 14, 2009

An international shipping company continues to eye the Port of Coos Bay on the Southern Oregon Coast as the future home of its newest terminal to handle container cargo.

But APM Terminals North America has slowed the process in light of a struggling global economy that has caused shipping companies to record huge losses.

Marine traffic at Coos Bay is down 50 percent this year and is expected to remain at that level in 2010, said Jeffrey Bishop, executive director for the Port of Coos Bay.

"There is no rush to add capacity to the system," Bishop said.

The general plan, however, hasn't changed, he said.

Bishop said he is barred from naming the development company that's under contract with the Port of Coos Bay. But Oregon Sen. Joanne Verger, who represents the coastal area, has confirmed that the port is working with APM, and the shipping company has stated in trade publications that Coos Bay is being considered for a new terminal.

The terminal being proposed by APM would give the Port of Coos Bay an advantage in handling container traffic in Oregon, which is currently dominated by the Port of Portland.

APM is talking about building a terminal capable of annually handling 2 million 20-foot unit equivalent containers, the industry standard. By comparison, Portland managed 245,459 containers in 2008. The Coos Bay terminal also would mean an infusion of construction jobs to build a facility expected to cost between $400 million and $700 million.

Josh Thomas, spokesman for the Port of Portland, said the port generally considers projects like the one proposed for Coos Bay as benefiting the overall region. He noted that the Port of Portland's marine business isn't exclusive to containers. The port also handles cargo like auto transport ships, dry and liquid bulk shipments and grain.

"It's a well-diversified portfolio," Thomas said.

Wayne Plaster, district manager with Northwest Container Services Inc., remains skeptical that a major terminal as proposed by APM would work in Coos Bay.

"The only reason a major steam ship line would call (on the Port of Coos Bay) is if they had direct rail connection running inland because you don't have a local consumption base," he said.

The port in March bought the 111-mile-long rail line that stretches from the coast to the Willamette Valley, but the route needs drastic repairs. The port is currently using $2.5 million in federal stimulus money to repair a tunnel. Bishop said the port hopes to have the rail line operating within the next 15 months, but acknowledged work is already behind schedule.

Bishop said the port's business is closely tied to Japan's economy. The container business would allow Coos Bay to diversify its business and give shippers an alternate destination rather than the larger West Coast ports.

"Our focus with both railroad and water side development is to focus on any intermodal development," Bishop said.