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BNSF breathes new life into Portland terminal

Shuttle trains now move ocean containers between the Oregon port’s Terminal 6 and Seattle and Tacoma following a series of labor disruptions and shutdowns.

   Container traffic has made a comeback of sorts at the Port of Portland, Oregon.
   An intermodal service started by BNSF Railway in January 2018 resulted in 36,837 ocean containers moving through the port’s Terminal 6 in the last year.
   Terminal 6 is a multipurpose facility for containers, breakbulk cargo and automobiles on the Columbia River near its confluence with the Willamette River.
   While the containers are handled at Terminal 6 by members of the International Longshore and Warehouse Union (ILWU), the containers are not moving on and off ships in Portland, but instead being loaded and removed from shuttle trains that take the containers to Northwest Seaport Alliance terminals in Tacoma and Seattle.
   Last year the five-day-a-week shuttle service handled 12,670 northbound container moves to Seattle and 10,084 northbound moves to Tacoma. Southbound, the service handled 7,746 containers from Seattle and 6,337 from Tacoma.
    Three shipping lines — COSCO, CMA CGM and Hyundai — are moving containers on the shuttle train.
   Amy Casas, a BNSF representative, said export freight on the shuttle trains generally comes from east central and southern Oregon, while imports are generally bound for destinations near Portland.
   BNSF and the port announced last July that they would continue the service through the middle of this year. This week Casas told American Shipper the railroad will continue to operate the shuttle trains past that date.
   Some of the items moving by container on the service include wood products, grass seed, hay, vegetables and consumer goods.
   The service has been a shot in the arm for the Port of Portland, which has seen its container and breakbulk tonnage plummet in recent years as shipping companies abandoned the port amid strife between the ILWU and the former operator of Terminal 6, Philippines-based  International Container Terminal Services Inc. (ICTSI).
   ICTSI operated Terminal 6 from 2010 to 2017. Bad blood between the union and ICTSI grew, in part, out of a dispute over whether jurisdiction for a couple of positions plugging in refrigerated containers belonged to the ILWU or the International Brotherhood of Electrical Workers and resulted in a series of labor disruptions and slowdowns.
   Carriers such as Hapag-Lloyd, Hamburg Sud, Hanjin and Westwood ended service to Portland.
   ICTSI said a lawsuit against the ILWU seeking a multimillion judgment has been scheduled “commencing in the latter part of 2019.”
   In 2007, the Port of Portland loaded and discharged from ships 260,128 TEUs of containers. Setting aside the shuttle train traffic, in 2018 Portland only handled 1,104 TEUs on and off ships. These were mostly imports of empty 53-foot containers for domestic intermodal rail service in the U.S.
   Breakbulk tonnage has seen a similar plunge, from 1,125,955 tons in 2007 to 5,775 tons in 2018.
   Ken O’Hollaren, marine marketing director, said the new shuttle train service is “staffed entirely by ILWU personnel. In terms of productivity, it’s meeting all expectations for both the port and the customers. We’re very pleased with how it’s going.”
   The service “represents another option for local shippers — meaning those from Oregon and southwest Washington — to move a product to and from Seattle versus trucking or any other rail option.”
   He also said the port is looking for ways to restart container barge service between Portland and Boardman, Ore., about 165 miles up the Columbia River, and Lewiston, Idaho, about 368 miles away via the Columbia and Snake rivers.
   O’Hollaren and Keith Leavitt, the port’s chief commercial officer, briefed port commissioners last week on efforts to attract more cargo to the port and increase revenue.
   Leavitt said the port has been working for three years on ways to increase marine business at the port.
   The port ended its lease with ICTSI, working with the ILWU to settle litigation, and convened a 22-member stakeholder committee to discuss the future of Terminal 6.
   The container shipping industry has been going through a period of consolidation and growing ship sizes, which makes attracting container service to an inland port like Portland, 102 miles up the Columbia River, more challenging.
   The shipping channel to the port has been deepened to 43 feet, which  O’Hollaren said has created new opportunities, “but we can’t be all things to all people, so that restriction will still be there. The idea is to focus on who you can be and who you can accommodate. On the ocean carrier side, there are still ocean carriers, even on the container side, which can call the river and can be accommodated within that draft and at Terminal 6. There are still niche carriers that are going to be around for some time.”
   Leavitt noted bulk ships and auto carriers always will be able to call the river port.  
   The port handles automobiles at both Terminal 6 and Terminal 4. In 2018, the port handled 262,479 imported automobiles, 15.9% more than the year before, and 58,105 exported automobiles, 35.5% fewer than in 2017.
   O’Hollaren said the decline in auto exports may have been related to rising tariffs in China, but said, “We expect it to come back on the export side.”
   Toyota moves automobiles through Terminal 4, and Honda, Hyundai and Ford move automobiles through Terminal 6. Toyota has seen its volumes surge in recent months, so much so that it leased storage space at Terminal 6 in order to handle an overflow of volume at Terminal 4.
   The port also has had some success in attracting breakbulk and project cargo.
   A Swire Shipping service to Australia and New Zealand calls Portland about every 35 to 40 days to load Western Star trucks made by Daimler in Portland. It loads the trucks using container cranes, placing them in general cargo ship holds partially loaded with wood pulp.
   Last year the port also discharged parts for some 50 wind turbines arriving on three ships. The parts were trucked about 140 miles to a site near Arlington, Ore., where a wind farm is being constructed.
   O’Hollaren said since the departure of ICTSA the port is acting as the terminal operator and using a subcontractor called Harbor Industrial to directly employ longshoremen and provide direct supervision.
   “The longshore productivity and the relationship is 180 degrees difference from what it was just a very short time ago. So without that reset in the relationship with the ILWU, none of this would be possible. I can’t emphasize that strongly enough,” he said.
   The port is highlighting the recent positive experience with the ILWU in its effort to attract new business.
   The port has reduced the operating loss at Terminal 6 from $6 million in the fiscal year ending June 30, 2018, to a projected $3.4 million in the fiscal year ending June 30, 2019.
   It hopes to reduce that further in several ways that could include attracting one or two transpacific container services; a container service from Latin America that could offer an alternative to overland transport from Mexico or Central America into the Pacific Northwest; or more breakbulk and automotive cargo.
   Portland’s bulk cargo volumes remain strong.
   Grain volumes were 3.8 million tons, down slightly from the 4 million tons handled a year earlier.
   O’Hollaren said tariffs and recent flooding in the U.S. Midwest have been disruptive to agriculture exports, but he said Portland’s supply chain is “second to none,” including both barge and rail services and the Columbia Export Terminal at Terminal 5.
   Mineral exports last year were nearly 8 million short tons, up from 6.9 million tons in 2017. O’Hollaren said the Portland Bulk Terminal, also at Terminal 5, is utilized by the Canpotex consortium, which uses it to export potash from Saskatchewan. The facility doubled capacity with a new shed to segregate different grades of potash and saw 20 percent growth last year.
   Terminal 4 also has facilities for exporting soda ash from Green River, Wyo., and importing liquid fertilizer, as well as an old grain elevator that is expected to be demolished and redeveloped.
   Leavitt also said the port has “the courage to get out of things that are not working.” He said the best example of that is the port’s decision to look at the possibility of alternative uses for one of its breakbulk facilities, Terminal 2.
   Last year, a group trying to bring a major league baseball team to Oregon signed a letter of intent with the port to develop a ballpark at Terminal 2.
  “Whether it ultimately works from a baseball stadium standpoint, it’s a long way from knowing,” said Leavitt.

Chris Dupin

Chris Dupin has written about trade and transportation and other business subjects for a variety of publications before joining American Shipper and Freightwaves.