Expanded air, marine and cargo traffic give officials reason to smile

After two years of fiscal instability following the Sept. 11, 2001, terrorist attacks, which knocked the global economy and the world's ports off their pins, the Port of Portland is beginning to find its bearings again.

With a newly adopted $665.7 million budget going into effect July 1, the port's chief financial officer said he sees a reason for optimism.

'We've been making quite a bit of investment for the future that's starting to pay off,' said CFO Ed Galligan.

The world economy was floundering even before 9-11. Then a lockout last fall that shut down all West Coast ports caused its own problems, and so did an overall drop in airline traffic.

'The past two years have probably been the most unprecedented times I can recall at the port, just relative to the challenges we've faced,' said Galligan, who has been the port's CFO for 14 years.

The new budget is the port's smallest in several years. The budget was $698 million last fiscal year and $669 million for the previous 12 months. The fiscal 2000-01 budget was $737 million but included funding for expansion at Portland International Airport.

Surveying budget history, Galligan said, 'Probably most important is that the region has in essence a brand-new airport.' The airport, he added, has a new direct light-rail link to the urban area.

Both Galligan and port spokesman Bob Applegate said several events boosted the port's profile this year, including the addition of air carriers Lufthansa German Airlines and Mexicana, which provide nonstop direct service from PDX to Germany and to Mexico.

Applegate said Lufthansa and Mexicana 'both seem to be doing quite well; we're pleased with the use of the foreign services so far.'

At PDX, 'the fact that we have a little over 85 percent origin and destination traffic provides a very strong base for us here,' Galligan said, 'as opposed to the hub airports such as Denver, Salt Lake City and Atlanta.'

More sea trade begins

Adding Lufthansa at PDX didn't just boost passenger counts. The airline also is carrying cargo to and from Europe, which already has increased the tons of deplaned air freight at PDX in 2003 from 210 tons to 353 tons, a 68 percent jump.

'Actually, it really creates not only a stronger passenger service but a cargo service, too,' said Rick Aizawa, the port's air cargo marketing manager. The German carrier's daily direct flights to Europe 'complement other freighter operations,' he said.

Much of the air freight in and out of Portland consists of high-tech components. 'When that is down, our air cargo figures tend to be impacted,' he said. 'Compared to the late 1990s, we're still trying to get back up to those numbers. It will take some time.'

On the marine side of the port's operations, South American steamship line Maruba/CCNI began regular calls, offering biweekly service between Portland and Asia. The line also brings in imports from South and Central America.

Applegate said the port's ability to generate new revenue will come through increased container traffic and creating an import distribution strategy that will boost import business in a port that's now strongly export-oriented.

There's also room for auto imports to grow, he said. The port currently is the third-largest auto importer in the United States.

Growth has obstacles

Still, Galligan hesitated to describe the port's business as stable. 'All of our lines of business are subject to the dynamics of the economy, whatever's going on in the economy,' he said.

On the West Coast, marine port business is growing increasingly competitive, with the Port of Tacoma working actively to woo business away from the Port of Seattle, for example.

'Frankly, we try to stay away from that kind of competition,' Galligan said. 'What we are trying to do here is provide competitive service for the manufacturers and producers who need to get their goods out of the region on a cost-competitive business.'

Galligan said Washington ports have a 'huge, huge advantage relative to tax support.' The Port of Seattle has the largest tax support of any North American port, pulling in $58 million in property taxes in 2003, while the Port of Portland will get $7.1 million this fiscal year.

Forced to deal with the economic shocks of the past few years, 'we really have become an adaptive organization, and I mean that from an operating standpoint,' Galligan said.

Contact Jeanie Senior at This email address is being protected from spambots. You need JavaScript enabled to view it..

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