Port of Portland Executive Director Bill Wyatt said Wednesday that replacing Terminal 6’s largest shipping line could take more than two years. Portland is a largely unattractive port right now, he said, because of years-long antagonism between the longshore workers’ union and the port operator that has consistently driven down the number of ships that can get in and out.

“I can’t say it was shocking news, because when you see the production reports at the terminal every week, as I have, and see the impact of this very, very low productivity, it’s obvious something had to give and something did,” Wyatt said that the port commission meeting Wednesday.

The port was officially notified in an email at 3 p.m. Tuesday that Hanjin Shipping Co., which moved 80 percent of the ships through Portland’s container terminal, would stop service by March 9.

Earlier Tuesday morning, The Oregonian/OregonLive reported that Hanjin dropped all calls to Portland from its schedule and sent letters to shipping companies that pay the line to carry products between Asia and Portland to the same effect.

Hanjin plans to continue serving Portland by train and truck, but send ships to the Seattle port.

The two remaining shipping lines, Hapag-Lloyd and Westwood, make up about a third of Terminal 6’s work currently.

About 657 longshore jobs will disappear along with Hanjin’s service, estimates the port, accounting for about $225,000 in pay per day.

The International Longshore and Warehouse Union officials blamed port operator ICTSI Oregon for losing Hanjin through mismanagement.

“Hanjin’s stated departure from Portland rests solely on ICTSI’s inherent refusal and failure to nurture customer relations,” said ILWU spokeswoman Jennifer Sargent. “ICTSI’s only interest is to leverage its regional monopoly for maximum short term and unit company profit. Its customers are secondary.”

Relations between the union and ICTSI Oregon, who took over operations from the Port of Portland in 2010, have steadily deteriorated. They have been to arbitration several times and local union members stopped work as recently as Friday and Monday to demonstrate a grievance against ICTSI Oregon for sending them home from work three days in 2014.

The West Coast’s contract negotiations are layered over long-simmering Portland-specific strife. Most recently, a demonstration by the local union Friday and Monday coincided with the West Coast port operators sending suspending business throughout the 29 ports over the weekend.

Through all of this, a Hanjin Copenhagen ship sat waiting to be unloaded for four days while another of the shipping company’s vessels steamed up the Columbia River. Hanjin — the ninth-largest shipping company worldwide — threatened to leave Portland before, but the Port of Portland convinced it to stay with $20 per container payments to shippers who use the line.

This time, Hanjin had enough.

Regional impacts

At a Port of Portland commission meeting Wednesday morning, Wyatt told a standing-room-only crowd that Hanjin’s withdrawal won’t impact his organization as much as it will the Oregon export and import community.

“I’m not going to tell you that suddenly the stores are not going to be stocked, you won’t be able to get your favorite iPhone or whatever, but for the people in the community and the state who depend on this service for their business operations, it’s very consequential,” Wyatt said.

Hanjin was an essential piece for farmers and manufacturers as far away as Lewiston, Idaho, who would send cargo to Terminal 6 to be loaded on to Hanjin ships.

Business Oregon Director Sean Robbins estimated Wednesday that about 5,000 jobs and hundreds of thousands of dollars in money that could go toward salaries will be affected by losing the South Korea-based shipping line.

Hanjin carried nearly all of Oregon’s exports bound for Asia, a region that includes 7 of Oregon’s top 10 trading partners. Likewise, large Northwest-based companies, such as Fred Meyer and Columbia Sportswear, import a lot of stock from Asian growers and manufacturers.

Likely, Robbins said, those big companies will be fine. Even small farmers have started working around the congestion at the Port of Portland, by trucking food and trees to Tacoma and Seattle in Washington or south to Long Beach, California.

But the shipping companies who depended on Asian trade to pay their employees will be smarting for awhile. “Those are dollars that aren’t going to go to hiring and salaries, they’re just going to get eaten up by trucking and air freight cost,” Robbins said.

National and local strife overlap

Shippers have been increasingly vocal about their frustrations with the congestion since contract negotiations started between the International Longshore and Warehouse Union, which provides dock workers at 29 West Coast ports, and the Pacific Maritime Association, whose members run the ports.

The negotiations started after the previous five-year contract expired in July 2014, and are reaching a climax now.

The Pacific Maritime Association announced last week that the port operators were making an “all-in” offer that would include 3 percent raises over 5 years and increased pension. According to the association, the average dock worker makes $147,000 per year in salary, $35,000 a year in employer-paid health care and an annual pension of $80,000. The association’s offer would raise the pension by 11 percent.

Union officials say they are close to reaching a deal, but no details have been forthcoming about when that might happen.

Wyatt said Wednesday that he expects a lockout in the next few days. The lockout would mean that port operators would close the gates to the ports, saying that they can’t pay workers who are not productive.

The union officials say they are not slowing down or stopping work intentionally.

Portland Mayor Charlie Hales said in a statement Wednesday that he hopes Hanjin officials will reverse their decision if the labor dispute is fixed.

 “Hundreds of jobs and millions of dollars in wages hang in the balance,” Hales said. “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.”

Even if a contract is reached soon, Wyatt said ICTSI Oregon officials constantly pound the pavement to drum up more business, but it’s a hard sell — now harder, with Hanjin’s vote of no confidence.

ICTSI CEO Elvis Ganda said in a statement Wednesday that he will try to find another shipping line to Asia. But he placed the onus on the dock workers to make it possible, saying they’ve spent years sabotaging the first and only U.S. headquarters of the Philippines-based ICTSI.

“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,” Ganda said.

— Molly Harbarger

mharbarger@oregonian.com
503-294-5923
@MollyHarbarger

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