Business dramatically up in Tacoma, down in Portland

By Peter Buxbaum, AJOT

The port of Tacoma published some remarkable breakbulk numbers at the end of the third quarter of this year. Year-to-date breakbulk tonnage was 83.5 percent ahead of last year's pace. In fact, the 198,000 tons seen through September far exceeded any full-year totals dating back at least to 2007.

The same cannot be said for the port of Portland, Oregon. There, breakbulk is off 15.6 percent year to date. If the current pace continues, Portland will be off the breakbulk pace of recent years going back to 2008, other than 2009, when tonnage hit a trough, by 12 to 15 percent.

Several other Pacific Northwest ports, including Everett, Longview, Vancouver, and Grays Harbor, compete for breakbulk cargoes. In the case of Tacoma and Portland, both ports have carved our specialized breakbulk niches that are dependent on a small number of customers. The good news for Tacoma is that its customers have elected to expand their relationships with the port in recent years. In Portland's case, the business of its primary breakbulk customer comes in waves, and so, too, the port's.

The port of Tacoma handled 198,415 tons of breakbulk cargo through the first nine months of this year, as compared to 108,101 tons during the same period last year. These figures are comprised almost exclusively roll on-roll off cargo in the form of construction and agricultural equipment. It does not include automobiles, which are figured separately, and which was actually down 4.1 percent during the first three quarters of 2012.

The port of Portland handled 692,815 tons of breakbulk cargo this year through September as against 820,496 during the same period last year. Full-year breakbulk tonnage for Portland totaled 977,233 tons in 2009, 393,002 tons in 2009, 945,935 tons in 2010, and 941,120 tons in 2011.

"The port of Tacoma's breakbulk business is driven by servicing two major carriers: Wallenius Wilhelmsen Logistics and World Logistics," said Larry St. Clair, the port's director of non-container business. "WWL increased vessel calls at Tacoma over the last two years from two per month to between six and seven per month."

WWL's eastbound and westbound round-the-world ro-ro services each stop in Vancouver every ten days. "Tacoma is not engaged in project cargoes," said St. Clair. "We rely on regular liner services and this has greatly benefited the port. Project cargo vessels can vary in their arrival dates and it is sometimes hard to say when the cargo will land on the dock. These liner services, on the other hand, are very precise in their schedules. They are in port for eight or nine hours, unloading in the morning and loading in the afternoon, and then they are gone."

All of the shipments handled by WWL and World Logistics are ro-ro cargo. "We have only one crane available to us at the end of our breakbulk terminal," said St. Clair, "so we are not doing lift-on and lift off."

Caterpillar, John Deere, and New Holland equipment are frequently seen being loaded and offloaded at the port of Tacoma. "We see big increases during the agricultural season," said St. Clair. "We see a lot of excavation equipment coming through the port and headed for as far away as Australia. Just about all of the ro-ro cargo is excavation, earth-moving, and agricultural equipment."

Imports of ro-ro cargo are almost as strong as exports at Tacoma. "Sometimes we see equipment from the same manufacturers coming in and going out," said St. Clair. "Caterpillar equipment may be coming off the ship in the morning because some of this equipment if manufactured overseas. Then we see Caterpillars rolling on board in the afternoon." Tacoma's breakbulk infrastructure includes an 1800-foot berth, 22 acres for staging and receiving, and 100,000 square feet of covered storage.

The port of Portland's breakbulk business revolves primarily around steel slab, rail, and coil. "We also handle occasional shipments of logs and large project cargo including hydroelectric turbines, transformers, and generators," said Sebastian Degens, the port's general manager for marine and terminal business development.

Portland's breakbulk business has been down in the last year. "There is substantial competition for breakbulk cargo in the region," said Degens. "The preferred master plan alternative is to continue to provide breakbulk and project cargo shipping opportunities for domestic and international cargo at Terminal 2, a public terminal in the inner harbor, while investigating industrial uses to maximize the underutilized yard areas for warehousing, storage, or truck transfer."

Portland used to operate several breakbulk terminals and was more of a significant breakbulk player. "There has been shift to containerization and this led to a consolidation of our breakbulk facilities," said Degens. "At this point we have two terminals, Terminal 2 and Terminal 6, that handle breakbulk in any significant volumes."

Terminal 6 handles inbound steel for EVRAZ North America, the port of Portland's primary breakbulk customer. "They bring in plate and slab steel that goes to support one specific fabrication facility," said Degens. "They have a plate and coil plant and a pipe welding facility in the proximity of our marine terminal that supplies gas pipeline projects around the U.S. and Canada. They don't have their own importing capability so this works out well for them."

Breakbulk tonnage at Portland is dependent upon EVRAZ's demand, which in turn is dependent upon the level of pipeline construction activity around North America. "That level varies," said Degens. "They source steel from all over, including China, Brazil, Mexico, and Vietnam. They also import product from a mill in Canada which arrives directly at the terminal by rail. That tonnage is not included in the breakbulk numbers that are reported." Portland also handles some project cargo, mostly imports headed to Canada's industrial heartland.

"Terminal 2 is one of the most modern and efficient multi-purpose cargo facilities on the West Coast, with a large lay down area," said Degens. "Terminal 2 handles project and general cargoes. Also, for the last 20 years we have had contracts with the Burlington Northern and Union Pacific railways to bring in steel rail form Japan to supply their maintenance projects. That is also handled at Terminal 2."

The port of Tacoma is in the process of making improvements to its breakbulk infrastructure. By the end of this year the port will have spent $600,000 on wharf improvements. It is also making improvements to how how traffic flows through the yard.

The port is considering expanding and possibly relocating its breakbulk terminal if it determines that needs to expand. "Last year," St. Clair related, "we had to open up another eight or nine acres to accommodate a large number of John Deere combines and cotton pickers. If we see that kind of situation frequently, that will drive us to look for a larger location to handle breakbulk in order to gain efficiencies." No decision on this issue has yet been made.

Despite disappointing recent numbers, Degens is optimistic about the possibility for growing the breakbulk business in Portland. "We are very committed to making our Terminal 2 very competitive," he said. "It has not lived up to its potential since it was constructed in the 1980s. We are aggressively marketing it and we are getting more requests and hearing greater interest."