Aviation is king at the Port of Portland, but outgoing boss Bill Wyatt explains where marine and industrial are going.

PAMPLIN MEDIA GROUP: JAIME VALDEZ - Port of Portland outgoing director Bill Wyatt in the ground run up enclosure at PDX where airplanes rev their engines to test them. The enclosure baffles the noise so as not to disturb neighbors. Wyatt says marine and landowning functions of the Port are changing rapidly, as ships get bigger and Portland is squeezed for industrial land.

The Port has three legs to its stool — aviation, industrial property and marine — according to Bill Wyatt, who will retire at the end of June after 17 years as Director.

"I'm a great believer in the saying 'If you've been to one port, you've been to one port,'" says Wyatt. Playing up the fact that they are all different — topography, climate, infrastructure, politics — he is pretty good at making the case, piece by piece, for how much potential Portland's port has.

Marine is where the Port of Portland has consistently made the news. Plenty of people have a sense that there's something dysfunctional going on at the Port, with the inability of the International Longshore and Warehouse Union and the port operators to agree on anything, and the subsequent exit of container shipping lines such as Hanjin. The containers mostly go to Seattle now, and Oregon's consumer imports (and exports) go by barge and truck to other ports.

COURTESY: PORT OF PORTLAND - The Port of Portland's non-aviation functions include Terminal 4 (mineral bulks, autos, liquid bulks).

Number's up for Terminal 6?

Wyatt likes to zoom out and give the macro view of the Port, particularly marine, which is at terminals 2, 4, 5 and the notorious 6. The port is "largely a landlord" in marine, not employing people to load ships, more to keep an eye on the people who do and charge them rent.

He gives a speedy but thorough account of what goes on at the terminals.

  • Terminal 2 is the oldest and smallest and does not have a permanent tenant.

  • Terminal 4 has three tenants: Toyota, Kinder Morgan (soda ash) and a bulk liquid importer of molasses.

  • Terminal 5 has long-term tenant Canpotex, which has a giant wooden structure from which potash arrives by train and leaves by ship, and another exporting grains (wheat, corns and soy beans).

  • Terminal 6 is the thorny one. "People associate it with containers (the large metal boxes carried by planes, trains and trucks) but at each ended there is a large automobile customer." Honda is at the east end and Auto Warehouse at the west, which converts Fords for the Chinese and South Korean markets.

    COURTESY: PORT OF PORTLAND - Terminal 6, now without container traffic. In future it may take more autos, or raw steel to be made into natural gas pipeline.

    Now leasing

    The average leases at west coasts ports are 10 to 20 years.

    When Wyatt negotiated his first lease in 2004 it was for Toyota, who invested so much in the property it only made sense for them to have a long lease to recoup their expenditure. That set the tone.

    Columbia Export Terminal is on a 30-year lease. International Containers and Terminal Services, Inc. had a 25-year lease, which it bought itself out of earlier this year out of frustration with the container slow down by Portland's longshoremen.

    "These are long-term leases. We have a mission focused on using these terminals in a way that generates economic activity here that amplifies out role as a gateway to the world."

    That gateway means Portlanders get their Costco tires and farmers are able to send their crops to market.

    "If you live in Portland and own a Honda, it probably came though here. And when a Chinese person gets a Ford with a sunroof and a Bose sound system, it was probably installed here in Portland."

    The idea that the Port has a mission might seem odd but Wyatt describes it as a publicly-owned business. "And we have to respect the global forces that shape our business."

    COURTESY: PORT OF PORTLAND - The former Reynolds aluminum plant, converted from a brownfield site to an industrial park for FedEx and Amazon.

    He explains that the loss of container traffic was in the cards because the industry is moving toward megaships that can just barely squeeze through the newly widened Panama Canal, but would never come to Portland. Portland's channel is just too shallow (43 feet) and crossing the Columbia River bar at the ocean is already enough of a deterrent, before you add two bridges and the 107-mile trip to Portland.

    Putting a good spin on the loss of container traffic, followed by the operator, Wyatt says trouble was avoided when ICTSI signed their 25 year lease.

    "When it was signed it was as a result of some trouble. We were the only public port authority operating a terminal, we had risk and could not see a viable future." He adds "We did not foresee the labor challenges to the extent they materialized. Any time on the waterfront in an environment like this, labor-management relations are going to be at the forefront."

    Does he think labor won the battle?

    " 'Won' is a hard word to use. The hours available for longshoremen to work declined by 30 percent. That means the union members have that many fewer hours to work. I wouldn't call that a victory. Everyone is disappointed how it turned out."

    And anyway, he adds, the ICTSI work was only 3 percent of the Port's total revenues.

    On the one hand, Wyatt says the Port is working to find another operator, because the Port is determined not to assume the risk of running a loading and unloading operation. On the other, it won't be like it was.

    COURTESY: PORT OF PORTLAND - Honda automobiles fresh off the boat from Asia.

    "We're going through a process right now to see what the appropriate future is for Terminal 6. I won't be around, but I am confident there will be niche in-water vessels arriving."

    With the industry moving to bigger ships and being focused on imports, operators want to import to bigger consumer centers — L.A., Seattle, Oakland — rather than little old Portland.

    What they could do at Terminal 6 is give more space over to steel. Looking at a framed aerial photo in the halls of the Port's glassy headquarters at PDX, Wyatt points out rows of steel bars. They go to Evraz which makes them into pipes for the natural gas industry.

    He thinks they could put the intermodal yard to better use and maybe add some more automotive work — again, storing cars or customizing them for export.

    The Port Commission has been having big presentations about changes in the industry. Recently there was one on vessel operations, the next one is on the changing face of cargo.

    He insists that the way the industry has changed in the last five years, whatever happens at Terminal 6 will be different. More niche services, and perhaps another major transpacific player, "But it's not going to be what you saw in the 1980s and 1990s, with three or four ships calling a week."

    He adds, "With the departure of ICTSI, a lot of the ill will leaves at the same time."

    So who will do the work, plugging and unplugging refrigerated containers, if the work returns?

    "It depends, but I don't think it's going to be an argument," is all he will say, politically.

    PAMPLIN MEDIA GROUP: JAIME VALDEZ - Port of Portland outgoing director Bill Wyatt ioutside the Port's HQ at PDX. They sold their downtown building in 2008 and now pay rent to the airport's general fund.


    The story of how the Port authority came into being is also part of Wyatt's marco-level state of the Port view. It began as a dredging operation, and all the dirt from the Willamette and later the Columbia channel went to infill Swan Island, which is now prime industrial land, and then to the Rivergate Industrial area (which is Oregon's largest industrial park.)

    In the 1970s, the Port became a busy landlord, leasing this land to what he calls "a potpourri of industrial, logistics and warehouse businesses." This fit the Port's mission of trying to bring jobs to the region. When there was nowhere left to infill — you can't fill in wetlands any more due to environmental regulations — the Port looked at the land where the old Reynolds aluminum plant sat.

    "Reynolds had just been purchased by Alcoa, they closed the mill and were preparing to fence it off. We said 'If you clean up the superfund site we'll buy it and bring back to life as industrial land."

    Wyatt lists all the municipalities who helped make it happen, and what came next was the FedEx Ground Depot and soon Amazon's 2 million square-foot distribution center.

    "These projects would never have happened unless the Port had stepped up."

    They raised the money to buy the Reynolds land by selling the Port's downtown building and moving into the headquarters (as a tenant) at the airport. "We could not have done Gresham Vista or Troutdale without selling our downtown building," which they did in 2008 at the peak of the market.

    "As I hand the keys over, where do we take this story?" There isn't much more land to turn over to factories: some Willamette Harbor superfund stuff, some in Washington County and Clackamas, and some outside the metro area. Again he stresses any development has to be consistent with the Port's mission, and be something the private sector is not going to do on its own.

    Where next?

    Wyatt calls it his retirement, but he still wants to work, not travel or completely rest.

    "I've logged 3 million miles on behalf of the Port. Getting on a plane doesn't fase me, but I am not in a burning rush to go anywhere."

    Asked if he will go back into politics, he smiles and gives clear answer.

    "Been there. Done with that. You can quote me on that. No."

    Having run the Portland Business Alliance once, perhaps he fancies wrestling with the new merger of Oregon's two statewide business organizations, Associated Oregon Industries and the Oregon Business Association?

    "They've been slow to get started, and I am anxious to see what they will do when they are seeking new leadership, but I am circumspect about talking about that when I still have a job here."

    Joseph Gallivan

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