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The Shipping News

The Shipping News Jason E. Kaplan

Global shipping is in crisis. What’s next for the ports of Portland and Vancouver?


From empty shelves at retail stores to news stories about long queues at West Coast ports, the shipping industry hit a crisis point this fall.

By early December, when this issue went into production, the crisis showed some signs of easing, though it wasn’t immediately clear how the holiday shopping season would unfold.

While national media coverage has largely focused on long queues at West Coast ports, the two large public ports in Oregon Business’ coverage area — the Port of Portland and the Port of Vancouver — have not received the same level of attention as their counterparts in Southern California.

And while the crisis is multifaceted — affecting retailers, manufacturers, car dealerships and even restaurants — one way to get a sense of what’s happening is to go to the ports themselves. Technically, a port is anywhere a ship can tie up, and there are many privately owned berths along the Columbia and Willamette rivers. But the Port of Portland and the Port of Vancouver are separate, government-designated port districts — municipal corporations with the primary goal of developing the economies of their respective regions.

The current iteration of the Port of Portland was created in 1970, when the Oregon Legislature merged two much older institutions: a city agency known as the Portland Commission of Public Docks, which was formed in 1910, and the original Port of Portland, a public corporation created in 1891. Overseen by a board appointed by the governor and confirmed by the Legislature, the Port of Portland operates Portland International Airport and maintains four marine terminals on the Willamette and Columbia rivers. It is also the developer of several industrial parks.

The Port of Vancouver USA, located in Vancouver, Wash., was founded by the Washington Legislature in 1912. It contains five terminals, along with the largest mobile harbor crane in North America. Like the Port of Portland, it functions as a public agency and is overseen by three locally elected commissioners.

In 2020, as the pandemic stopped normal trade in its tracks, companies that previously shipped manufactured goods to standard markets found themselves responding quickly to new and urgent needs. Many shifted gears and began delivering nonstandard cargoes like personal protective equipment and other medical gear to sometimes far-flung destinations outside their normal itineraries and ports of call.

COVID-related port shutdowns drastically slowed the movement of cargo, especially in China’s ports. Slowdowns in other ports along the supply chain helped make shipping and delivery times erratic.

Then the shipping industry enjoyed a rebound: Panicked businesses sought to shore up inventories, and homebound consumers turned increasingly to internet purchases. In the past year, manufactured goods have flooded major ports, in the process yielding shippers never-before-seen profits. But the big increase in cargo volume has left even large ports overwhelmed with far more ships to process than they were ever designed to handle.

While the situation remains complicated, port officials in Columbia River’s ports say ship traffic is moving smoothly — though they are sometimes hard-pressed to find enough dockworkers. The spiraling cost of containers has some companies investigating the use of alternative methods of shipment. And it’s possible that the practice of just-in-time inventory management is on the way out.

Here’s what we know so far.

0122 shipping containers2A container ship being unloaded at the Port 
of Portland’s Terminal 6. Photo: Jason E. Kaplan

1. Ship traffic is steady, but ports are short of workers.

Captain Dan Jordan is a Columbia River bar pilot, a master mariner who pilots arriving and departing ships in and out of the river between the river entrance and Astoria. He and his colleagues are the initial link in the local supply chain that brings vessels to the Portland area.

They see the ships firstand guide them on their often turbulent journey between the infamous Columbia River Bar and Astoria. There they hand them off to the next link in the shipping chain: Columbia River pilots, upriver ship-handling experts who guide them from Astoria to their allotted berths. Stevedores at ports then load or unload their cargo.

Jordan says in 2020, approximately 1,500 ships called on Columbia River ports that include Portland, Vancouver, Kalama, Longview, Rainier, Astoria and the Port of St. Helens. That’s about average. About 45% of those ships called on Portland.

While vessel calls at both ports are increasing, so far there is no ship congestion on the river the way there is in other West Coast ports.

According to Alex Strogen, the chief commercial officer for the Port of Vancouver, when it comes to ship traffic, flow is good.

“The carrying capacity of the river is below its maximum utilization. So we are not flirting with what the river can handle. We are nowhere near that,” Strogen says.

However, labor shortages and imbalances on land have caused slowdowns.

0122 shipping alexAlex Strogen, chief commercial officer of the Port of Vancouver  Photo: Jason E. Kaplan

According to Strogen, there’s been land-based congestion at ports, partly due to a shortage of truck drivers as older workers retire. There’s also a dearth of port workers because of the pandemic.

“What we saw was that when the pandemic broke out in March of 2020, it created a break in what had been a historic practice that had lasted for decades. Ports here on the Columbia River shared labor between ports,” Strogen says.

In the past, union workers with the International Longshore & Warehouse Union (ILWU) would travel between ports such as Portland, Vancouver, Astoria, Coos Bay and Longview.

“We could flex up or flex down with the demand of work at a particular port on a particular day. When the pandemic occurred, that process was halted,” he says.

Strogen says the change, while understandable, is posing long-term problems.



“When you look at a local union like Vancouver, we only have 200 men and women that are in the ranks of the longshore union,” he said. “We were entirely dependent on, No. 1, their ability to stay healthy. And No. 2, their ability to come to work and do the business support, because they weren’t getting help from anywhere else.”

After two years of the pandemic, that labor model is still in place. Strogen hopes the practice of sharing labor will return at some point in the future.

Dan Pippenger, the Port of Portland’s chief operating officer, says that at the Port of Portland, he anticipates that new longshore hires would help with alleviating slowdowns on the docks. (The ILWU declined to comment for this story.)

2. The Port of Vancouver caught a second wind in 2020.

The Port of Vancouver had a banner year in 2020, despite the pandemic — a happy consequence, Strogen says, of solid planning and an uptick in business importing components for wind energy.

Other cornerstone cargoes for the port are vehicles — Subaru imports cars to Vancouver — and imported slab steel, used in construction, says Strogen, who is responsible for domestic and international trade marketing for the port, where he has worked since 2017. His prior experience includes two decades in the maritime cargo realm, including past positions with Maersk and APL shipping lines — including a post for APL in the Middle East.

But it was wind energy that saved the day.

“We’d been dutifully working the two prior years in order to gain access to that particular market and cultivated it aggressively,” he says. The strategy paid off. “Vancouver is the single largest wind-energy port on the West Coast. We also happen to be the largest gateway for Canadian wind projects.”

That’s partly because the wind-project components currently in use are now so large that they can’t fit in British Columbia ports. Instead, they’re sent into the Columbia on ships specially designed to carry such big project cargoes. (If you see a ship carrying large white objects, some cylindrical, others long and gracefully curved, you could be seeing wind-energy parts on their way to Vancouver.) Wind-energy project cargoes also go to the Port of Longview.

“In 2020 we were so fortunate. We had the largest wind blade ever brought into North America; it came in here to the Columbia River to Vancouver,” Strogen says. “It was the size of the Statue of Liberty. So it’s just massive.”

Strogen says vehicle shipments to the port declined rapidly during the pandemic, driven by a shortage of microchips that slowed car production. Subaru brings in cars to the port in high-sided, blocky vehicle carriers called RO-RO ships, which stands for “roll-on, roll-off.” The vessels can carry 5,000 to 6,000 cars at a time.

0122 shipping ROROCars are unloaded 
from a ship at the 
Port of Portland.  Photo: Jason E. Kaplan

Other imported cargoes come from places like Japan, China, India, Southeast Asia, Russia and Mexico.

But the Port of Vancouver, like the entire Columbia River cargo system, is much more of an export engine than an import gateway.

Agricultural and mineral cargoes like wheat, corn, soy, potash and soda ash make up a big share of Columbia River exports. The Columbia River/Snake River system, which extends inland to Lewiston, Idaho, is the nation’s single largest wheat export gateway, transporting over 50% of all U.S. wheat to markets overseas.

The Port of Vancouver is also now the last remaining copper concentrate export facility in the U.S. With copper essential for electronics manufacturing, the mineral is in high demand in Europe and Asia. Agricultural products go to places like Japan, Southeast Asia and South America. Soda ash from the Port of Portland and Longview goes to Asia to be made into automotive glass.

3. Portland is the sole gateway for importing shipping containers — and business, while modest compared to other West Coast ports, is up.

At the heart of the global cargo crisis is an item that none of us likely thought about much until now, but which takes center stage in news reports about shipping: the humble — but very important — shipping container.

Shipping containers are everywhere: on trailers hauled by semitrucks, in the parking lot behind any big-box store and on train cars that roll by when you’re driving on I-5. These big, corrugated metal boxes can withstand the relentless pounding of waves during a Pacific crossing. They can carry just about everything, from raw materials to food to manufactured goods.

Among many other types of cargo handled at the Port of Portland, including cars, raw minerals and agricultural commodities, the port handles containers.

In fact, the Port of Portland is the sole gateway for containers on the Columbia. You’ll see container ships at the port’s berths at Terminal 6. Portland has the corner on container cargo on the river partly because of U.S. Customs and Border Protection, which is responsible for container security at U.S. ports. Their scanning equipment is based at the Port of Portland, and that’s where container traffic goes.

According to Pippenger, container-ship arrivals have increased. Pippenger, who has been with the port since 2006 in various roles, says the port has never had an overwhelming quota of container ships, but there are more now.



The port saw a gap in its container service when Hanjin Shipping left in 2016 amid labor and terminal operator disputes. (The company also filed for bankruptcy protection that year.) But four years later, as the pandemic loomed, container ships returned.

“We’ve routinely had one weekly service call, so about four a month. We’ve added another weekly call from a different carrier line, as well as additional charter vessels with containers, two of those per week. So we’re averaging eight to 10 a month,” Pippenger wrote in a November email to Oregon Business.

4. Containers aren’t just for container ships anymore — and escalating container prices are causing shippers to “think outside the box.”

A bulk carrier is a merchant ship designed specifically to transport unpackaged bulk cargo — things like grains, coal and cement. Considered the workhorses of the global merchant fleet, they often have tall posts on deck with arms — cranes for handling cargo. They have huge hatch covers on deck to access cargo holds.

Now they’re carrying containers. Before the pandemic, it was unusual for them to do so, but it’s becoming much more common. That’s because a ship like this can avoid a congested container port and deliver its cargo somewhere else, where backups aren’t a problem. Some big retailers have even chartered such ships to make a container run just for their products.

According to Pippenger, a company called Ocean 7 has chartered such ships for specific customers, and a scattering of them called on the port during 2021.

One of the causes of the recent congestion is that that there aren’t enough shipping containers in places where they’re needed — resulting in a situation where some containers have no cargo inside when they’re in transit.

0122 shipping walmartWalmart containers are unloaded from a ship at the Port of Portland’s Terminal 6.   Photo: Jason E. Kaplan

Efforts continue worldwide to equalize the imbalance in container availability, and that’s happening on the Columbia, too.

“While the number of empty shipping containers shipped back to Asia varies from port to port, we see about one out of every three containers shipped empty,” Pippenger says.

Some ships are carrying empty 53-foot containers.

“In this situation, the cargo is the 53-foot containers,” Pippenger says. “These containers are brand-new, constructed in China and coming over here for use in the domestic market.”

And on the flip side, some segments of the container-shipping market are gradually shifting away from using containers at all — enabling some customers to bypass congested ports.

One of the key drivers of the current crisis is the spiraling cost of shipping containers: as of mid-November, a container that cost $2,000 to ship before the pandemic can now cost $20,000.



This has led to a shift toward shipping goods that might normally be moved in containers using more old-fashioned methods that hail back to the era before containers were invented in the 1950s. This is referred to in the industry as “break-bulk” cargo — a category that includes things like big pieces of equipment such as wind-energy components; or heavy machinery; or pallets, boxes or crates of things that are simply loaded on the ship.

“So we’ve seen customers take things like aluminum ingots, which had to move inside a standard container, and we see them take those out and start moving them via break-bulk into the Port of Vancouver,” Strogen says, “these massive super sacks of chemicals that would otherwise be moved inside a container. We’ve had requests for everything from brake pads to holiday decorations. Moving cargo in crates, you would never have seen that.”

The rise in container rates has driven costs up for everything else, port officials say.

For instance, Strogen says, the cost to ship wind-energy components from Asia to North America has doubled or even tripled.

That’s because shippers can make more money hauling containers, so they want to be compensated for hauling other kinds of cargo that would not normally cost as much.

“You’re much more interested in taking that container because that is a heck of a lot easier to get on and off my ship quickly and effectively. Because as an ocean carrier, I only make money if I’m moving,” he says. “If I’m in port, even if I’m working cargo, I’m not moving. And so they’d rather get in and out. And they can do that much quicker carrying containers than complex bulk cargoes like wind-energy components, or steel slabs, those types of commodities. It just makes more business sense if you get high-paying containers on the ship. So, as a result, we’ve seen the price for wind components increase dramatically.”

5. The future is uncertain.

While container shipping on the Columbia has increased, Pippenger says the Port of Portland so far has not seen ships specifically diverted from their planned itineraries to avoid other West Coast ports, in part due to lack of water depth — or draft.

Strogen says big container lines like Maersk and CCMA will never send their largest ships here.

“We simply don’t have the ability, from a draft perspective, to handle these massive modern-day container vessels,” Strogen says. We’re kind of the smaller end of the scale, in terms of what we can safely handle here. So that’s really precluded us from being able to offer the economies of scale [to big shipping lines].”

But he says that Portland, to a certain extent, is offering an alternative for some shipping lines. “We’ve seen MSC, Mediterranean Shipping Company, call here at Portland. They historically would not have called here unless there was severe congestion at their other ports of call. And so I think the Port of Portland certainly has served as an emergency-relief valve.”



While the Columbia River’s ports are unlikely to compete with their larger counterparts, the industry is in flux — and some permanent changes may be on the horizon.

Before the pandemic, retailers, because of the clockwork supply chain, got used to being able to order inventory and receive it quickly and reliably — known as “just-in-time” inventory management. This enabled retailers to, effectively, use the ship as their warehouse, cutting costs.

That dependable supply chain is, at least temporarily, a thing of the past.

“We have become so accustomed to the supply chain working so well, despite them literally reaching halfway around the world,” Strogen says. “And this has been the first time, globally, in my 20-plus-year career, where I’ve seen that supply chain truly break down.”

That means warehouse space will be in demand going forward as business owners decide they need to stock up and keep inventory close.

“We are already seeing a very hot warehouse market here on the West Coast of the United States,” Strogen says. “And I think that you’ll see that will be even further boosted by this growing demand for ‘safety stock.’”



As this issue went into production in late November, logistical and policy changes were happening daily, and it was difficult to predict what conditions would look like by January.

In a sign of just how severe the global backlog in cargo remained pre-Christmas, in late November Bloomberg News reported that Amazon was projected to spend about $4 billion — likely the company’s profits for the holiday season — chartering ships and planes to get cargo directly from Asia to the U.S., not to mention its massive on-the-ground network of delivery personnel, and huge holiday hiring strategy to add workers. Amazon hopes to maintain customer trust, but it’s a revealing indicator of what it takes to get around the current cargo mess.

Strogen says from a broad perspective, the issue is similar whether you talk about containers coming into the country or locally here into the Columbia River. Ports were never meant to handle this much cargo at once.

“I think the best way you can think about this is to imagine one of the freeways of Los Angeles, one of the 12- or 14-lane super freeways,” he says. “And that is the transpacific trade, crossing the ocean. You have this high volume of products racing across the Pacific. And then it comes down to like a two-lane, maybe a four-lane road. They were never designed to handle the sudden spike of demand that we’re seeing now.”


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