The plague at the port's Terminal 6: Editorial Agenda 2016

Terminal 6.JPG

Terminal 6 at the Port of Portland, in a file photo from last year.

(Richard Read/Staff)

You could say container shipping collapsed at the Port of Portland's Terminal 6 because of a union problem over who can and cannot plug and unplug refrigerated containers - a preposterous but unresolved labor spat that, owing to work slowdowns on the docks, made major shippers leave. You could, alternatively, say the union's jurisdictional protest is overblown in its business-crushing influence and argue that the Port of Portland, situated 84 nautical miles up the Columbia River from the ocean, is a comparatively remote facility serving small, mostly agricultural, exporters at a time the trans-Pacific shipping industry shifts to megaships docking at accessible, deep-water ports such as Long Beach and Seattle.

Editorial Agenda 2016

The truth lies somewhere in-between. But the present reality is undebatable: Container shipping is dead at Terminal 6, following the pullout in recent weeks of Westwood Shipping Lines. Westwood was the last to tough it out in Portland, as mighty blows to port commerce were dealt last year, when the giants Hanjin and Hapag-Lloyd decided to seek efficiencies elsewhere. This year, Westwood was landing at Terminal 6 but once a month to pick up goods from Northwest producers eager to sell to Asian markets.

It's a vexing situation for the port. Its Terminal 6 operator, ICTSI, faces years more on its lease, and Terminal 6, with its hulking Erector set structures, represents hundreds of millions of dollars of sunken capital costs. More troublingly, the idling of Terminal 6's container operations poses a costly situation for Oregon's growers and producers whose goods had been shipped simply and efficiently from the port.

Those mostly rural enterprises - a core strength of Oregon's agricultural sector - now face a choice matrix: to increase transit times, and adjust harvests or storage times accordingly, by shipping goods via truck or rail to ports in, likely, Tacoma or Seattle. Fuel costs, modality shifts, loading and unloading - all exert financial pressure on goods whose demand prices, for the most part, are set by markets elsewhere. Put another way: An Oregon producer operating on a thin margin could find him or herself in a world of hurt. Meanwhile, port officials and ICTSI scour the territory for a shipper willing to cross the Columbia bar, chug upriver and restore commerce in a regional economy that in some measure depends upon Terminal 6.

Tacoma is home port for Westwood following the shipper's defection, in 2014, from Seattle, though both ports characterized the move as signifying collaboration between the ports to secure market share in trans-Pacific shipping. Collaboration and consolidation at all levels is increasingly the trend. Hapag-Lloyd in recent months joined forces with large Asian and European shippers to reportedly claim a whopping 18 percent of container fleet capacity globally. Such actions, aligned with the rise of megaships, only drive worldwide shipping prices down further - a pinch that stings all the way upriver in Portland. Westwood, with a comparatively small fleet of mid-size ships, said in a statement that making its monthly call in Portland just wasn't penciling out anymore.

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Whither Terminal 6? Port officials describe the region's export market to be a "niche" enterprise serving many small to mid-size shippers. To that end, they have been meeting in Pendleton and elsewhere to discuss with growers and producers how to get their goods to Asian markets in a price-effective manner. That's good, as the first outreach must be to help rural producers stay alive in the wake of Westwood's pullout.

But the port continues to be hobbled by its labor situation, a West Coast-wide union complication in need more than ever of resolution. Mediation sessions are "ongoing and positive," reports Bill Wyatt, the port's executive director. That, too, is good. But a peculiar threading of the needle must occur if Terminal 6 is to restore activity and build vitality: labor peace and a shipper with vessels that can navigate a river environment that in places requires dredging to ensure passage. The Legislature, meanwhile, could explore in its 2017 session whether the business models of some of the port's operations, among them container shipping, need reimagining.

Niche operations are good, particularly alongside the large and profitable import operations of automobiles at the port. But the niche shipping operation to be served by Terminal 6 requires deft and immediate choreography: in labor negotiation; in marketing to Oregon's rural producers; in ready transit solutions that not only meet the needs of producers but, by way of ease and efficiency, help grow their businesses.