The Decline of the Port of Portland

Right From the Start

Right From the Start

Tuesday’s Wall Street Journal carried an article about the trials and travails of small ports in an age of increasingly larger supersized cargo ships. The article highlighted Portland and the fact that it is a “river port” more than a “seaport.”

Portland, located about 100 miles up the Columbia River from the Pacific Ocean, enjoyed the reputation of a port protected from the violent storms that pound the Northwest Pacific region, particularly in the winter months. It became not only a flourishing port but also a Mecca for shipbuilding, including barges used to move goods from the heartland to Portland for eventual shipment overseas. However, as international trade grew the demand for larger and larger container ships – particularly those used for container cargo – began to diminish the desirability of the Port of Portland.

For years, the main channel of the Columbia would be dredged to accommodate the larger ships. The Port of Portland increased its size and modernized its machinery for loading and unloading these ships. The Port was one of the more significant engines of economic growth providing hundreds of well paying skilled jobs and thousands of ancillary jobs in related industries. But then things began to change. And the change had as much to do with politics as it did with the size of container ships.

About the time of the election of now disgraced Gov. Neil Goldschmidt (D-OR) the priorities of Oregon’s politics began to change. Protection of the spotted owl supplanted timber production and drove dozens of large and small logging companies and mills out of business. State and federal lands became unavailable for logging and environmental laws regarding water quality and land erosion created barriers even on private lands. Land use planning became the mantra of those in government and even though over ninety percent of Oregon’s land mass remains undeveloped, the restrictions that grew on the remaining ten percent deterred development in urban areas – particularly for industrial growth.

Oregon’s government class became enamored with the salmon as a symbol of the health of Oregon. Succeeding governors – all Democrats – opted for salmon over economic growth. Everything was measured by the impact, real or speculative, on salmon. Dredging the Columbia and Willamette rivers became points of major contention. The delaying tactics perfected by the environmental advocates proved costly not only in terms of time but also in scope. Instead of the government being the neutral arbiter of concerns, it became the advocate for restrictions and where the law was insufficient for government control, additional laws were enacted. It became a pattern for the government class and they became enamored with the growth of government not only for its control over people and business but because it provided government jobs, which in turn built the growth in public employee unions, which in turn provided the financial resources for the government class to be elected and retained, which created the opportunity to repeat the cycle endlessly knowing full well that all would be financed by an increasing tax burden on business and individuals.

And at this point virtually every other environmental, social and politically correct concern is paramount to economic preservation and job stabilization at the Port. It was inevitable as the size of cargo ships grew, particularly for the container business, that Portland would not be able to accommodate their size and that business and jobs would be lost. While that part of the Port’s business was declining, the opportunity to export coal, oil and gas increased. But the priority of Oregon’s government class was uninterested and instead elements of the government have actively resisted the loading of coal and gas in particular thus ensuring that the reduction in the shipping from the Port will remain permanent.

And yet there is another element in the decline of the Port of Portland that was given only a passing recognition by the Wall Street Journal article:

“. . . A labor dispute between dockworkers and the container terminal operator has caused delays in handling goods for much of the past two years.

“In February, South Korea’s Hanjin Heavy Industries & Construction Co. Ltd., which moved the majority of ocean-bound containers through Portland’s Terminal 6, halted service. The other major container-shipping line in Portland, Germany’s Hapag-Lloyd AG, said in early April that it would do the same. After Hapag-Lloyd made its final call, no container ships stopped in Portland until late July, when Westwood Shipping Lines Inc., a much smaller operator, sent a vessel.

“Hapag-Lloyd has no plans to return to Portland. A spokesman cites “a need for efficiency and a competitive product,” as its reason for pulling out. Hanjin could come back if the port sees fewer delays, said Mike Radak, the company’s senior vice president for operations and sales in North America.”

The labor dispute had less to do with management than it did with competing claims of two different unions each of which insisted that it had jurisdiction over certain jobs. This dispute has been going on for about two years with periodic flare-ups of union violence, work stoppages and work “slow downs.” Businesses that rely on the Port for transport and supplies have suffered along with the cargo companies. And while the politicians (all Democrats) could resolve the issue almost instantly, they are beholden to the unions – all of the unions – and as a result they have sat idle while the intramural dispute continues and the shipping business goes elsewhere.

Portland is a victim of changing technology in the shipping business. But rather than adjusting, accommodating and evolving, Oregon’s government ruling class has chosen to do just about everything that will exacerbate the decline of the Port of Portland. The result is that the “quality of life” in Oregon, which should begin with a quality job, will slip further and further into an economy of inherited wealth and minimum wage jobs supporting that wealth.