With Port’s Carriers Gone, Shipping Costs Increase For Businesses, April 10, 2015, Oregon Public Broadcasting

[vc_row][vc_column width=”1/1″][vc_column_text]by Conrad Wilson OPB

German-based container carrier Hapag-Lloyd announced it’s left the Port of Portland this week.

It’s the second container carrier to leave the port in the last month, meaning the state’s only international container terminal has lost nearly all its business.

For businesses in the Portland area, Hapag-Lloyd’s departure is just adding to the difficulties put into motion by last month’s loss of South Korean based carrier Hanjin Shipping.

“It’s just become more complicated to have goods manufactured overseas and have them imported into Portland.” David Kahl is president of Ergo Depot, which makes a standup desk.

Kahl’s company is among the many that relied on the Port of Portland’s container services and are now trying to figure out how to import as well as get their products to overseas markets.

Specifically, Kahl relied on Hanjin. And in fact, OPB interviewed him a few months ago and wanted to check back to see if he had found a way to get more desk frames in stock.

Surprisingly, things have improved for him largely because he’s getting what he needs through the port in Seattle.

Walking around his distribution center in Portland, there’s a lot more in it than there was two months ago.

“So we’re slowly catching up to the kind of stock level that makes sense for us,” he said. “We’re still probably about six or eight weeks away from catching back up to the big absence of product we had for so long.”

The latest carrier to leave, Hapag-Lloyd, was the carrier businesses and farmers used to get goods from the Port of Portland through the Panama Canal and on to customers in South America and Europe.

Along with Hanjin, the two carriers connected the region to international trade routes. And they made up almost all of the Port of Portland’s container business.

Steve Johnson, a spokesman with the Port of Portland, said like Hanjin, Hapag-Lloyd left, in part because of a local labor dispute that resulted in long loading and unloading times the carriers faced while in port.

“The impact from Hapag will largely be the farmers in (Eastern) Washington and Northern Idaho that send agricultural goods like beans, lentils and peas down the Snake and Columbia River to the Port of Portland via container,” Johnson said. “Those containers then get loaded onto the ship and they go to the Mediterranean ports where the customers await.”

On Wednesday, the Port of Lewiston in Idaho announced it would suspend the barge service that floated those containers loaded with agricultural products down river to Portland. The service has been in place since 1978.

“Without the Hapag-Lloyd ship at the Port of Portland there’s no containers to barge between the two points,” said Greg Zanavich, the business development manager for grain cargo at Tidewater, which ran the barge service between ports.

He said the company carried about 90 containers per week, meaning fewer trucks on the road.

“All that cargo’s going to find another avenue to get to port,” he said.

Tidewater is working with the Port of Lewiston to re-start the barge service at another port along the Columbia River. From there the containers would move by truck or train to the Ports of Seattle and Tacoma.

But for now, farmers in Eastern Washington and Idaho will need to truck their goods to port.

“There’s simply not enough trucks out there available for this additional commodities to be able to move them,” said David Doeringsfeld, manager at the Port of Lewiston. “In talking to our customers, they’re expressing concerns that over the next few months, they could see inland transportation costs increase anywhere from 60 to 100 percent.”

Trucking companies say they’re booked weeks in advance. That means delays for business owners like David Kahl, who sells the stand up desks.

“We at least have two out of the three colors in stock so customers can get either the grey or black frames that we offer,” he said. “We’re out of stock on the white right now and we’re waiting for that container, which has been offloaded in Seattle and we’re just waiting for a trucker.”

Getting things halfway back to normal has come with a price, Kahl said. Shipping his containers from the factory in Taiwan to Seattle and then trucking them to Portland has increased his overall import costs by 35 percent.

“Essentially were paying for a trucker and his rig all day,” he said.

On top of that, he’s had to hire a logistics company to help navigate Portland’s increasingly complex shipping landscape.

Kahl said his goal is to expand his business in Portland – a city he said he loves. But if he had to do it all over again, he said he probably would’ve based his distribution center near San Francisco.

Click here for audio[/vc_column_text][/vc_column][/vc_row]