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Tiny Coos Bay positions itself as an answer to global freight bottlenecks

Published on: 09/22/2022

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Lots in the north point of Coos Bay were once piled high with lumber, as ships waited by the docks to take wood products overseas.

But today, many of Oregon’s lumber mills have contracted or closed. With them have gone the ships by the dock, and many working-age locals have moved away, too.

Some local officials say a $2 billion plan for a major shipping terminal in the city could change all that. They say the port could bring all manner of imports to the Pacific Northwest and then the rest of the continent, and send Oregon crops and other exports overseas. And, they say, it could employ 2,500 to load and unload as many as 1.2 million shipping containers a year.

The idea is gaining support, and not just locally. Oregon senators Ron Wyden and Jeff Merkley, along with Rep. Peter DeFazio, are asking for $1.24 billion in federal infrastructure funds.

“The Mega Grant program was meant to support major infrastructure with regional significance,” Merkley said, referring to a grant program housed in the U.S. Department of Transportation. “We realized in these last two years that we do not have enough port capacity on the West Coast. It has been a huge part of our supply chain challenge, and this project would increase that West Coast capacity by 10%.”

Wyden said he expects a decision by year’s end.

Backers envision the Port of Coos Bay would be mentioned in the same breath as the much larger ports of Los Angeles-Long Beach and Seattle-Tacoma. But Coos Bay, 80 miles from the nearest interstate and more than 200 miles by road from the state’s population center in Portland, might not seem the likeliest candidate for a major shipping terminal.

Experts say smaller ports are not unheard of, however, and Coos Bay’s location might give it some surprising advantages. It offers easy access to the massive ships crisscrossing the Pacific Ocean. Trips to and from certain major ports in Asia, like Shanghai and Yokohama, are nearly 700 miles and 650 miles closer from Coos Bay than Los Angeles-Long Beach, respectively.

David Kratochvil, a logistics expert who chairs the Supply Chain and Logistics Management Council at Oregon State University, said that the port could make up for its smaller size with a novel business strategy.

“They’re not going to be a Los Angeles, they’re not going to be a Seattle,” Kratochvil said. “They have to look at the logistics aspect and you’d have to design what I would call a logistics port … where things move immediately on arrival and there’s no delay.”

Kratochvil said port officials’ prediction they would handle 1.2 million containers a year is probably a bit high. He said the Coos Bay channel can likely only accommodate one or two cargo ships parked for offloading at a time, slowing down the containers handled per day.

Nonetheless, if Coos Bay were able to attract customers with small-volume, high-priority shipments, it could carve out a valuable niche.

“I think Coos Bay has a chance, offering something that nobody else does,” Kratochvil said. “Everybody’s looking for it.”

PORTLAND’S STRUGGLING PORT

Boosters are pitching the idea as one way to avoid bottlenecks like the one caused by COVID-19 delays in 2020. And that may be a compelling pitch.

“Most people are wanting to get it done in one day — unload first and then loading the empty back on,” said Daniel Wong, global logistics professor at Portland State University. “That’s what makes it attractive for a steamship line wanting to call on your port. If I’m operating a large steamship line and you make me sit there for four days, I’m losing money.”

But it wouldn’t be the first time Oregon has tried to be a major player in ocean shipping.

Dwindling returns at the Port of Portland’s container terminal show the potential risk for such a venture, especially if the port does not have solid partnerships with international shippers. And labor unrest has the potential to upend terminal operations, as did a dispute between the longshore workers union and a private operator brought on by the Port of Portland.

“Let’s not forget the lessons of less than 10 years ago,” Wong said. “That was devastating.”

The Port of Portland was first opened in 1974, but by 2004, major carriers began backing out, citing high costs for outbound transportation.

Things continued downhill for the port in 2011, when they brought on a private terminal operator — International Container Terminal Services Inc. — which clashed with the International Longshore and Warehouse Union. The union staged a series of work slowdowns beginning in 2012.

In the years that followed, the container terminal lost virtually all its business and has yet to recover previous cargo volume even after ICTSI cut ties with the port in 2017 and the port began to recruit shipping companies back.

Reducing the state’s reliance on the Port of Portland is part of the pitch for the Port of Coos Bay, Wyden, Merkley and DeFazio said in their letter advocating for funding.

“It would be a complementary piece of Oregon’s port dynamic along with the Port of Portland,” Wyden said. “The Port of Coos Bay also can accommodate container ships that could never cross the Columbia bar.”

A GROWTH OPPORTUNITY

Coos Bay has long been looking for a new line of business to help make up for the timber industry’s decline. Most recently, a proposal for a liquefied natural gas terminal and pipeline failed to win supporters. As the Jordan Cove Energy Project grew less and less likely, priority shifted to the container terminal.

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Source Url :https://www.oregonlive.com/business/2022/09/tiny-coos-bay-positions-itself-as-an-answer-to-global-freight-bottlenecks.html

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