Hay and Feed Exporters Leave Port of Portland, Hanjin Shipping Pulls Out – DTN

    Port of Portland - Photo by Aaron Pareki

    After nine months of stalled labor negotiations and the loss of a major customer, the Port of Portland had another setback, losing a second customer at its container-handling Marine Terminal 6 (T-6). The terminal has been operated by International Container Terminal Service, Inc. (ICTSI) since 2011 after signing a 25-year lease with the Port of Portland for operation of the container/break bulk facility at Terminal 6, according to the company’s website.

    On Feb. 10, Hanjin Shipping Co., which accounted for 78% of the business at T-6, officially withdrew from the Port of Portland, saying its last day would be March 4. In a Feb. 11 article, the Associated Press (AP) reported that Hanjin’s pullout wasn’t a surprise. In recent years, the company has been unhappy about the pace of work among longshore workers. “If you are in Portland, you should know why. Can’t afford the expense of operating there. Simple,” Mike Radak, senior vice president for Hanjin USA, told AP.

    The Hapag-Lloyd website said “In an effort to improve the schedule integrity of our Mediterranean Pacific Service (MPS), Hapag-Lloyd took the decision for a permanent omission of the port of Portland, Oregon, effective at the end of March 2015.” With the departure of Hapag-Lloyd and Hanjin Shipping Co., the only remaining shipping line is Westwood Shipping Lines, a smaller shipping company, which specializes in forest products, and containerized and oversized cargo.

    ICTSI Oregon, Inc. released a statement on its website saying, “ICTSI Oregon, Inc. is very disappointed to hear the news of Hapag-Lloyd’s decision to cease its direct MPS service calling Portland. Hapag-Lloyd has been very supportive and loyal to the Portland market. Coupled with Hanjin’s recent announcement to leave Portland and discontinue its Asia service, Hapag-Lloyd’s departure will adversely affect regional businesses that rely on Terminal 6.”

    The news is not good for shippers who relied on the Port of Portland to ship, among other things, agriculture products. SL Follen Company, which exports hay and feed products from the U.S. to Asia and the Middle East, told KOIN News of Portland that costs will rise for their business. “We decided to go temporarily through Texas at an even higher cost to us,” Vince Follen told KOIN 6. “We were probably going to have to go to Tacoma and then truck it down, which meant at least another thousand dollars in through-put costs just to get the cargo back to Oregon.”

    Mike Hajny, vice president of Wesco International, Inc., a hay exporter in Ellensburg, Washington, told DTN in an email that Portland cargo has been an absolute nightmare as of late. “We have a plant south of Salem that is owned by another gentleman, but we market all of his product. Since Hanjin has pulled out, all of the Portland cargo has to be railed or trucked to Seattle/Tacoma. As you can imagine, the rail is over capacity, and trucking from Salem to Tacoma on a daily basis is a logistical headache with the current port situation. The Port of Portland has always been a problem child, but it is going to cause some major changes in pricing structure and product shipment in our business model.”

    According to AP, the ICTSI is trying to attract new lines to the container terminal. That may be a tough sell due to the labor problems between ICTSI and dockworkers. The other issue is the location of T-6. Because it is inland along the Columbia River, it is less convenient than other West Coast ports.

    International Longshore Warehouse Union Sends Labor Contract To Members for Vote

    On Friday, April 3, ILWU Coast Longshore Caucus delegates voted to recommend approval of the tentative agreement reached on Feb. 20, 2015, between the union and employers represented by the Pacific Maritime Association (PMA), according to a press release on ILWU’s website. The proposed five-year contract covers 20,000 dockworkers at 29 West Coast ports.

    All 90 delegates spent the week prior to April 3 reviewing the proposed agreement “line-by-line” before voting by 78% to recommend the proposal.

    “This agreement required 10 months of negotiations — the longest in recent history,” said ILWU International President Bob McEllrath, “but we secured a tentative agreement to maintain good jobs for dockworkers, families and communities from San Diego to Bellingham. Longshore men and women on the docks will now have the final and most important say in the process.”

    The next step will be mailing the proposal to affected longshore union members who will then discuss it at local union meetings. A secret ballot membership ratification vote will be the final step in the process, and the final tally will be conducted on May 22.

    Port of Portland - Photo by Aaron Pareki

    Port of Portland – Photo by Aaron Pareki

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