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New Problems, Same Solution at Port by Editorial Board The Oregonian, December 17, 2015

Sometimes the best thing you can say about a year is that you are happy it's over and hope the next one will be better. That's the situation for the Port of Portland in regard to its marine operations. Terminal 6, where containers are loaded and unloaded, has been in turmoil since a labor dispute erupted in the spring of 2012, so expectations weren't exactly high when the year began. But 2015 turned out to be even worse than the previous three years.

The year's setbacks included:

• Hanjin Shipping Co. stopped serving Portland in February, followed by Hapag-Lloyd two months later. The withdrawals left the Port with only sporadic container service from niche carrier Westwood Shipping Lines. The loss of regular container service has had a cascading impact, increasing shipping costs for everyone from wheat and lentil farmers in Idaho to wholesalers and retailers in the Portland area.

• In between the Hanjin and Hapag-Lloyd departures, Gov. John Kitzhaber resigned amid influence-peddling allegations, deleting a key figure in Port negotiations and creating a political vacuum.

• The loss of container service came at a time when there was a shortage of drivers and equipment needed for long-haul trucking. The increase in demand at a time of short supply had the predictable effect of jacking up shipping costs even more.

• While developing its 2035 comprehensive plan, the city of Portland downgraded the projected cargo volume at the Port to a 1 percent annual growth rate.

• While this is a technical matter, it has consequences. The downward jobs adjustment, along with aggressive assumptions about the amount of brownfield redevelopment that is possible, could make it more difficult to develop future projects -- and the jobs they produce -- at the Port.

The comprehensive plan should be the simplest obstacle to overcome. The Port has submitted information to city staff detailing private investments that have been made in Port facilities and were not considered in the city's economic opportunities analysis. The city has shown an inclination to factor that information into its analysis. The soonest City Council is expected to vote on the comprehensive plan is April or May. Before then, the city should adjust its growth projection upward to the "medium growth" level of 1.8 percent suggested by the Port. Using this "mid-range" projection also would be consistent with choices made by the staff in assembling other growth forecasts for the comp plan.

Growth forecasts incorporate all Port marine activities. And the outlook for autos and grains, as well as other categories, is brighter than that for containers. Any plausible path to growth for containers requires restoring regular shipping schedules. The Port has pursued a dual path since Hanjin and Hapag-Lloyd left, seeking short-term solutions while also attempting to restore container service.

The most notable short-term move came earlier this month with initiation of a patchwork barge-and-rail system to get agricultural and paper products from the Port of Lewiston to the Port of Portland. Once in Portland, the products will be shipped using Westwood's monthly service or sent to Seattle-area ports. The Port is subsidizing the service. The stopgap solution is one of several that emerged from meetings that the Port and Business Oregon conducted around the state. It makes sense only as a temporary measure and addresses only a fraction of products affected by the loss of regular container service.

In the long run, adopting a positive outlook requires envisioning a scenario that convinces container lines to serve Portland. There is unlikely to be a resolution through legal channels. The Port and terminal operator ICTSI Oregon Inc. have received a string of favorable rulings from the National Labor Relations Board and courts -- the most recent from the NLRB coming earlier this month -- but the International Longshore and Warehouse Union appeals each decision. The legal back-and-forth could last well into 2017, or longer. The union's pay-guarantee plan limits the financial damage to members in the short-term, and reduces their willingness to compromise.

And that leaves prospects for a solution essentially at the same place they have been since 2012. The ILWU and ICTSI must settle their differences at the bargaining table. For that to happen, the ILWU must accept that ICTSI, which has a long-term contract with the Port, isn't leaving and the longshore work tactics are a big part of the problem.

Related Pages:
Port of Portland's Marine Terminal Shipments Plummet Year Over Year by James Cronin, Portland Business Journal, 11/20/15