Feisty port tests auto mettle
Terminal 6 takes on Tacoma for increased Hyundai, Kia imports
The Port of Portland is in a tense face-off against the Port of Tacoma over auto imports.
Local port officials are working to persuade HK Logistics America to move its Kia Motors America imports out of Tacoma and consolidate its auto handling at the Port of Portland's Terminal 6 on the Columbia River.
HK Logistics is the company formed to move both Hyundai and Kia cars around the United States.
Meanwhile, Port of Tacoma officials are urging HK Logistics to move its Hyundai operations out of Portland and consolidate there, using as a lure the $40 million
auto terminal they will start building next month.
Portland, the first of Hyundai's North American port facilities, also is the Korean automaker's largest. More than 140,000 Hyundais moved through Portland in 2002, a jump of 30,000 over 2001. This year's total is projected to be 150,000.
Mike Anson, manager of product public relations for Hyundai Motor America, said HK Logistics is reviewing its port consolidation plan. A decision on whether to consolidate business in Portland or Tacoma
isn't due until the fourth quarter of 2004, he said.
The port of Portland's lease with Hyundai comes up for renewal in 2005.
Ann-Marie Lundberg, the Port of Portland's general manager of product development, said the port ÑÊthe largest auto handler on the West Coast and the third-largest auto port in the country ÑÊthinks it has a strong case for consolidating Hyundai and Kia here.
'The crux of our argument to them is going to be logistical superiority,' Lundberg said. 'We have a strong two-way flow of traffic, a critical mass in both truck and rail, land available for expansion and an experienced work force.'
Autos are 'very high revenue freight' for both railroads and steamship lines, she said. And Portland, linked to the main lines of both the Burlington Northern Santa Fe and the Union Pacific railroads, also has good interstate highway connections.
Another advantage, port spokesman Aaron Ellis said, is that Portland, unlike Tacoma, is a freshwater port, which means automakers don't have to protect cars on the dock against salt air.
There also are economies of scale here, he said. American Honda Motor Co. leases facilities at Terminal 6. And Toyota Motor Sales USA, located at Terminal 4 on the Willamette River, a few months ago started work on a $39 million expansion of its facility.
Ford Motor Co., Daimler-Chrysler and General Motors also have facilities in the port's Rivergate complex.
Lundberg said the auto business 'provides a critical revenue stream for the Port of Portland.' The revenue is expected to reach $5 million in the 2003-04 fiscal year ÑÊor about 9 percent of all the port's marine revenues.
Tacoma's port hopes to muscle more business away from ports in Seattle; Vancouver, B.C.; and California. It is spending $210 million to build a 237-acre container terminal that it boasts will be the biggest north of Los Angeles.
Tacoma's container business dwarfs Portland's. Tacoma handled 1.5 million container units in 2002, while Portland's count was 200,298.
Port officials here say they're not interested in battling for container business ÑÊalthough they were delighted by the container traffic in May at Terminal 6, which broke a 9-year-old record.
Terminal 6, Oregon's only deep-draft ocean container facility, saw a total last month of 37,563 TEUs ÑÊa reference to the industry measurement standard of 20-foot-equivalent units. Of that total, 27,422 TEUs were loaded onto ships for export; 10,141 containers carried imports.
The previous record of 35,472 TEUs was set in March 1994.
Part of the boost in container numbers came when a ship operated by the Evergreen line was diverted from Tacoma.
Ellis said Portland markets itself as an attractive alternative for containers: 'If you're suffering congestion elsewhere, you're not going to find that here. Bring your ship in here; we can take care of you, even at the drop of a hat.
'Not many ports can offer that,' he said. 'They're maxed out.'