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UPDATE: Mayor calls for both sides in labor dispute to settle their differences

Photo Credit: KOIN 6 NEWS - A Hanjin ship at the Port of Portland. The Port of Portland is warning of regional economic damages from the withdrawal of Hanjin Shipping from Terminal 6, Oregon’s only deep draft international container terminal.

The South Korean-based company has notified port officials and terminal operator ICTSI Oregon, Inc. that it plans to withdraw direct call service from Portland on March 9.

In an email statement, Hanjin Senior Vice President, Chief Commercial Officer & Chief Operating Officer Mike Radak said the reason is simple: the company “can’t afford the expense of operating” in Portland. He was referring to persistent shipping delays related to the ongoing labor dispute between ICTSI and International Longshore and Warehouse Union.

“Hanjin has been a vitally important and longtime carrier in our market, and this will be a tough loss for our region,” says Bill Wyatt, executive director for the Port of Portland. “We have made every attempt to prevent this outcome.”

Elvis J. Ganda, ICTSI's North American CEO, accuses the longshoreman's union of deliberately driving Hanjin away from the port.

"The ILWU’s long-term campaign to undermine the success of Terminal 6 has now cost Portland a major economic contributor to our local economy and will ultimately risk the jobs of rank and file union members," says Ganda, who notes a federal judge has held the union in contempt for work slowdowns.

Mayor Charlie Hales issued a statement Wednesday urging both sides to settle their differences.

“I’m troubled by the reports that a labor dispute between the International Longshoremen and port operator ICTSI allegedly has led to a decision by South Korea’s Hanjin to suspend operations in Portland. Hundreds of jobs and millions of dollars in wages hang in the balance. It is my hope that both sides quickly come to a fair and equitable solution to the dispute, and that Hanjin reverses its decision to withdraw from Terminal 6. The sound business factors that first led Hanjin to make Portland a hub for incoming and outgoing international commerce remain true. Portland is the right place on the West Coast for Hanjin to conduct its business. A solution to the Terminal 6 dispute, reached quickly and equitably, could spur the shipper to alter its decision," said Hales.

Hanjin, which has used the port since 1993, has contracts with the area’s largest shippers. It handles nearly 80 percent of the container volume at the port’s Terminal 6.

More than 900 businesses depend on the port to get their goods to and from international markets, and the Hanjin service supports an estimated 657 direct jobs and $33 million in wages annually.

The departure leaves Hapag-Lloyd and Westwood Shipping as the remaining direct calling carriers. The withdrawal will not impact the port’s other marine business lines such as autos, grain, minerals, steel, project cargo or liquid bulks.

The port has a 25-year lease with ICTSI Oregon, Inc. for the container terminal that will remain in place, but port officials say there are short and long term impacts of losing direct call container service.

After March 9, shippers in the region who used the Hanjin service will need to use rail or truck transportation to reach other ports at a higher cost per container.

Port officials say they will remain engaged in conversations with Hanjin Shipping, ICTSI Oregon, Inc., shippers and others in coming weeks to explore potential solutions and next steps.

“We are concerned for local importers, exporters and the hundreds of good family wage jobs that depend on this vital service,” says Wyatt. “It will take considerable effort and cooperation, but we will do our best to recruit a new transpacific service like Hanjin.”

KOIN 6 News contributed to this report.

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