Hanjin plans to leave Port of Portland

Pullout by South Korean shipping line would be blow to area economy

By

Published:

 

PORTLAND (AP) -- A South Korean shipping line that badly needs to cut costs plans to leave the Port of Portland, threatening the Northwest economy, increasing costs to big importers and putting at risk the viability of the port's international container terminal.

Hanjin Shipping Co. Ltd., the Port of Portland's biggest trans-Pacific container carrier, has made plans to pull out of Portland, The Oregonian reported.

The move would jeopardize the international container terminal because prices could increase substantially for the remaining two carriers.

Port of Portland managers said Friday the decision may not be final, and pledged to do what they could to retain Hanjin or find a replacement.

"They have reached out to us," said Sam Ruda, Port of Portland director of marine and industrial development. "Their senior vice president of sales, marketing and operations wants to come out here within the next two weeks and certainly talk to the Port and (ICTSI Oregon Inc., which operates the terminal.)"

Hanjin's service represents about 80 percent of the container terminal's volume, said Josh Thomas, a Port spokesman. He said the service supports an estimated 771 jobs in the region.

A Hanjin letter sent to customers Thursday and obtained by The Oregonian did leave an opening for reconsideration.

"Hanjin Shipping will continue to review the resumption of direct call service based on changing circumstances," it said.

Hanjin, which began its Portland-Asia service in 1994, pulled out at one point in 2001 and returned three or four months later.

Portland has always been an expensive port, as shipping companies have to hire pilots and take the time to bring their vessels 100 miles up the Columbia River for relatively low container volumes. But a festering longshore labor dispute and increased terminal charges also appear to have taken a toll on Hanjin.

Jeff McEwen, Portland manager for the South Korean shipping line, said container handling costs and low longshore labor productivity helped make Portland too expensive.

"The actual charges have substantially increased, and when productivity doesn't meet our norms," McEwen said, "the cost goes up even more."

The longshore union and the port operator, locked in a contract dispute, blamed each other for Hanjin's decision.

Hanjin has lost more than $100 million this year.