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A Hanjin Shipping Co. vessel calls on the Port of Portland's container terminal, which supports about 2,000 jobs. Managers of the Seoul-based shipping line will decide whether to stop calling on one of four ports: Portland, Seattle, Vancouver, B.C., or Prince Rupert, B.C., according to port officials.

(Benjanmin Brink/The Oregonian)

Hanjin Shipping Co. plans to stop calling on one of four West Coast ports: Portland, Seattle, Vancouver, B.C., or Prince Rupert, B.C., officials at the ports of Seattle and Prince Rupert confirmed Tuesday.

Port of Portland officials have been lobbying hard for Hanjin to keep its service, which the company announced in October it would halt this month because of high terminal charges and low productivity by longshore union workers.

Oregon importers and exporters have been nervously awaiting a decision. If Hanjin pulls out, they will have to pay $500 to $1,000 extra to send a container by truck or rail to and from ports in Washington or California.

But as Hanjin managers evaluate the Port from a new angle, comparing it to the three other destinations, Portland could suffer in the ranking.

Portland is by far the smallest of the four ports, in terms of cargo volume, which is measured in TEUs, or 20-foot-long container units. It handled 179,000 TEUs last year, compared to 536,000 at the Port of Prince Rupert. The Port of Seattle handled 1.57 million TEUs in 2013, and Port Metro Vancouver handled 2.6 million last year through November.

The Port of Portland’s container terminal is 100 miles up a river, requiring a bar pilot to bring a ship across the Columbia River Bar and another pilot to steer it upriver. The Columbia River shipping channel is dredged to a depth of 43 feet – shallower than the other three ports, which can accommodate larger, more heavily loaded ships as vessel sizes continue to increase.

And Portland has become notorious in shipping circles for its nasty labor-management problems, which have snarled cargo and caused vessels to bypass the Port at times as a federal judge ruled that union longshore workers intentionally slowed operations.

Gov. John Kitzhaber tried to get members of the International Longshore and Warehouse Union to speed cargo handling by persuading electricians to give longshore workers disputed jobs. But productivity figures released by the Port of Portland show that results have been negligible (see chart above), as the longshore union accuses terminal operator ICTSI Oregon Inc. of mismanagement.

Portland versus Prince Rupert

If the relatively small ports of Portland and Prince Rupert are the most likely to be dropped, however, the River City does have some favorable points.

Hanjin, which has called on Portland for two decades, only began vessel calls at Prince Rupert in 2011. Portland is a strong export port, with local goods producers that enable shipping lines to balance the flood of containers arriving from Asia. The exports mean Hanjin doesn’t have to spend money transporting empty containers by land to Portland for shipping back to Asia.

Prince Rupert’s trade is not nearly as balanced, port statistics show. The Canadian port is mainly a transit point providing rail connections to and from eastern Canada and the Midwest. But Prince Rupert is closer to Asia by sea than the other three ports, offering shorter shipping times.

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Port of Prince Rupert managers have not mounted the full-court press on Hanjin that Port of Portland officials have waged for months. Bill Wyatt, Port of Portland executive director, and other Port officials have met repeatedly with top Hanjin managers in Asia. In the Far East, business leaders still value personal connections, longstanding relationships and demonstrations of commitment.

But Seoul executives haven’t told Port of Portland managers of any plans to drop one of the four ports from their Pacific Northwest Hanjin Express Service, said Sam Ruda, the Port’s chief commercial officer.

“I don’t doubt for a minute that they are evaluating all their global services,” Ruda said. He noted Hanjin recently announced it would pull out of the trans-Atlantic market.

Drewry Group, an international maritime research and advisory company, concluded a recent analysis of Hanjin Shipping's finances with a prediction.

“Other financially troubled carriers will look to follow the example of Hanjin and pare back their networks, with their peripheral trades the first to go,” said the Drewry Container Insight report. “Maintaining global market coverage is now something only the carriers with the deepest pockets can afford.”

-- Richard Read