Makers sound off about the state of freight in Oregon.

TRIBUNE PHOTO: L.E. BASKOW - Although the loss of container service is a small percentage of the Port of Portlands business, there are other long-term effects on businesses throughout the Pacific Northwest.How about a drop yard between Eugene and Corvallis?

Or chopping a few feet out of rail car chassis?

Or how about just a website?

These were some of the ideas floated at the first of six workshops around the state to help develop and promote alternatives to the container shipping companies that have left the Port of Portland.

More than a hundred producers, shippers and administrators gathered July 24 at the Airport Sheraton to figure out how to get goods to market, and specifically, what’s going on with the Port of Portland.

In April, Governor Kate Brown signed a Trade and Logistics Initiative, one of the results of which was this series of workshops. They are being sponsored by Business Oregon, the state’s economic development department; the Oregon Department of Agriculture, the Oregon Department of Transportation, and the Port.

The two largest container shipping companies serving Terminal 6 — Hanjin and Hapag-Lloyd — announced they were pulling out several months ago because of an ongoing labor-management dispute between operator ICTSI Oregon and the longshoreman’s union. No replacement shippers have yet been found.

Life after Hanjin has proved frustrating for many of the area’s importers and exporters, who relied on cheap travel by ship compared to train and truck. In many cases goods have to make the extra step to the ports of Seattle/Tacoma, or Oakland, by road and rail, which adds a layer of cost.

Business Oregon’s Director,

Sean Robbins, just days before announcing he was stepping down and moving back to Wisconsin, pointed out that it’s not just Portland that’s having problems.

“People all around the country delving into the crisis at their local ports. It’s not unique in Portland, but it’s exacerbated.”

The problems everywhere are rising shipping costs, truck chassis shortages, and upriver barge and highway traffic congestion.

West coast labor issues are just an “additional layer.”

He sympathized with small business owners who must wear many hats including VP of Logistics.

“The Intels, Nikes and Fred Meyers of the world have lots of capital and lots of people to help them figure this out. Ninety percent of exporters in the state are small businesses and they don’t necessarily have that.”

He said the room needed to look at the global trade environment, including “bigger ships, labor and automation issues. And we need to take a look at our regulatory infrastructure and policy.” Oregon has to think globally and with one eye on Asia.

Part of the problem is that the west coast has been tainted by the wider labor dispute.

But, Robbins added, “Labor is not the primary issue for us here today. We’re here to develop very concrete solutions that position our state in the future.” He asked everyone to think about the conversation in a 25-year light — not just the next two to three years.

At Terminal 6 only a couple of hundred containers a month come now, compared to thousands last year. Curtis Robinhold, who will take over from Bill Wyatt as the next Port of Portland Director, praised the Port’s “continued investment” in Terminal 6’s cranes, meaning they are still being maintained in the event new carriers decide to call.

The hunt is on, but it sounds slow going. He said there are 38 lines on the Trans-Pacific service route. Eighteen of them fit the requirements of the Columbia River.

“We’re focused on three or four, actively engaged and doing visits with the support of Governor Brown.”

Robinhold was clear: “On the T6 labor management dispute, until we have a successful remedy we really are going to have a hard time recruiting service.” He said they need to get their issues resolved and move on.

Loss for labor

If labor wasn’t the primary issue of the day, the emcee, Peter Friedmann, ignored the memo. Friedmann is a lobbyist with Lindsay Hart LLC who specializes in federal regulation, legislation and federal agency actions.

Friedmann said the Port of Oakland is “hell.” He pointed out that 82 percent of container traffic on the west coast comes through the Ports of Long Beach and Los Angeles, where two unions are fighting each other.

“An interunion squabble is one place you never want to be in the middle of,” he said. The threat is a loss of trade to the east and south east. Chinese imports into the east coast and the Gulf of Mexico now exceed imports into the west coast for the first time.

“Nothing we produce in Oregon can’t be produced elsewhere,” he warned. “Filberts can come from Turkey. Hay, lumber, there’s competition from around the world. None of this cargo is hostage, it would be good if all the players understood that. I said to Bobby McEllrath (president of the ILWU), ‘If this keeps up, what are your kids going to do for a living?’”

Friedmann said agriculture exporters and ILWU are meeting now, in a no-pressure environment, with no media and no government entities present.

“The agriculture exporters are meeting with the longshoremen at various west coast ports, to develop a better mutual understanding of how the activities of the longshoremen impact the competitiveness of US exports in the world market.”

TRIBUNE PHOTO: CHRISTOPHER ONSTOTT - Oregon suppliers of agricultural and industrial products were anxious at the rising cost of road travel and the inflexibility of rail travel. Doing everything by ship would be much easier.

On the road again

And that website? Patti Summer is a Customs Broker and founder of Global Trading Resources.

“It’s really become a problem: we need coordination of accurate information between carriers and the terminal and the truckers,” she said. A wait time of five hours can hurt a shipment. Summer was recently hit by a per diem bill that amounted to $2,200 for a container that was not accepted for a month.

“It cost me and I had no control over it,” she said. “If the State Department of Transportation can have a sign that says ‘accident 20 miles ahead,’ why can’t the same thing be available to truckers” for times in and out of ports?

Car production is centered in the south east. Nike and Adidas have distribution centers in the southeast, to be near their customers. The west is sparsely populated. Ports such as Charleston can handle 44 containers an hour; Savannah, 42. “On the west coast it’s 27 and 28 per hour on a good day,” said Friedmann.

Several people talked hopefully of building a drop yard between Eugene and Corvallis. There containers would be transferred from truck to rail cars, which is cheaper.

It’s no surprise that people are disgruntled. In July, an annual report from Ball State’s Center for Business and Economic Research, showed Oregon’s logistics drop a grade from bad to worse. In the 2015 Manufacturing and Logistics Report, CBER director Michael Hicks says, “It was a mixed year for Oregon, which saw its grades in manufacturing industry category drop from A to B, in the logistics industry category from C to D+.”

Gary Cardwell is chief executive officer of Northwest Container, which has 90 acres at the port. His company runs trains up to Seattle and Tacoma six days a week. It takes 36 hours to get them unloaded and reloaded.

One problem he sees is commercial driver licenses are not available until you are 21, but the sort of people who would go into truck driving — 18-year-old high school graduates — are passing the industry by because they don’t want to wait.

“We have a great concern about that gap, with people finding careers other than trucking,” said Cardwell.

According to Peter Friedmann, there are 35,000 trucking jobs vacant in the USA, and truck driving has a turnover of 90 percent per year.

“The biggest cost is recruitment,” he marveled. He also suggested the US have a national standard, since certain big trucks are not allowed in California. Triple axle trucks have to be split up costing more driver time.

He said railroad lobbyists spend a lot of time fighting legislation that would change that, but also said it was a union issue. “It’s the teamsters: more trucks, more jobs.”

He singled out regulations that limit driving hours.

“We have all sorts of activism now by our Federal government, such as restart provisions and other brain-dead ideas which force trucks off the road between 1 a.m. and 5 a.m. These are the manufactured problems we have to address,” said Friedmann.

Afterwards, Greg Borossay of the Port said, “There was some consensus in the room that options to lean on the two major class one railroads (Union Pacific and Genesee & Wyoming) will be an important thing.” One improvement would be a peel-off yard where truckers can come in and not be held up. They could also do their “match back” which means returning with a full load. “It could be a road service or a shuttle train service in the Eugene Springfield area,” he said.

Railroads are interested in longer trains and longer distances. You would need an extra 12 trains a week to carry the containers to the Puget Sound that used to come out of Terminal 6. But they’re not long trains, they’re more like shuttles.

Cardwell, of Northwest Container, runs a train from the Port of Portland’s Rivergate to Tacoma and Seattle. Exports like hay, lumber, waste paper, and scrap metal head north. Imports to Portland are consumer goods coming to Fred Meyer, Doc Marten, Xerox Nike, Rite Aid.

Cardwell said afterwards, “There are solutions. What you heard today was the past. Until May it was a disaster out there, now we’re in August things are going to run a lot smoother.”

He said he was hoping all the groups would build a back-up option. “Oregon didn’t have a backup plan. The Port of Portland was it. We have to build that secondary plan now, which in my opinion is rail. A lot of times until there’s a disaster you don’t know where the holes are.”

He’s hired 37 people and invested $5 million in equipment in six months, and could use some more help.

He submitted a proposal to ODOT to retrofit the wells on his train cars so they can carry two containers at once. It would mean cutting the well of his rail car and shortening it to make it stronger. The work would be done at Gundersen in Eugene. But Cardwell can’t afford to pay for more than 25 percent of the work.

The state, through Connect Oregon, would need to pay the rest.

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