Port of Portland reacts to tariff changes

On Monday, the U.S. and China agreed to suspend increased tariffs for 90 days while negotiations continue. Prior to that announcement, the Port of Portland had projected exports and imports to be down 30% in May. We hear from Curtis Robinhold, the executive director of the Port of Portland, and from Tim McCarthy, the chief operating officer of Harbor Industrial, a maritime services company at the Port’s container terminal.

Note: Curtis Robinhold is a member of OPB’s Board of Directors.

Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.

Dave Miller: From the Gert Boyle Studio at OPB, this is Think Out Loud. I’m Dave Miller. Yesterday, the U.S. and China agreed to a kind of 90-day truce in their trade war. For the next three months, U.S. tariffs on Chinese imports will go from 145% down to 30%. Chinese tariffs on American imports will go down to 10%.

What does all of this mean for imports and exports in Oregon? To get a sense for that, we’ve invited two folks from the Port of Portland. Curtis Robinhold is the executive director of the Port. I should note that he is also a member of OPB’s Board of Directors. Tim McCarthy is the chief operating officer of Harbor Industrial, a maritime company that provides labor and operational services at the Port.

They both join me now. It’s great to have both of you on the show.

Tim McCarthy: Great to be here, Dave.

Curtis Robinhold: Yeah, thank you. Good to be here.

Miller: Curtis, first – Fortune had an article last week about the drop in exports from U.S. ports over a recent five-week period. It had this line: “The port with the steepest decline was the Port of Portland in Oregon, which had a 50% drop in exports.” However, they noted, that port “has a small number of shipping containers compared to other U.S. ports.” So first of all, is this accurate, a 50% drop over a recent five-week period?

Robinhold: The drop that was forecast is actually just that – it was a forecast predicted by a third party model. And we don’t think that that is accurate. In fact, through April, our year-to-date container volumes are actually down by 8% and the month of April, actually, volumes were up month-on-month by 18%. So some of that is just the contortions you see in the market with the movement of policy at a national level. Folks are either rushing to get in ahead of a tariff or they’re holding back when those tariffs go up. But we’ll see what happens in May. I suspect a 50% drop is high, especially with the adjustment here this week from the White House.

Miller: Tim McCarthy, how quickly can people who are involved in maritime shipping pivot? I mean, how quickly can shippers react to an announcement like we got yesterday? Can there be a rush where exporters quickly get stuff out of their countries or importers do the opposite?

McCarthy: It always takes some time because the containers have to make it to the port, the bookings have to be identified, and then they have to load them to the vessels and then be delivered to the United States. So there’s always a few week gap. So, for sure, the larger shippers can react quickly. It’s the smaller ones that get affected more so. They can react, but it does take a few weeks.

Miller: A few weeks, but these two countries have given the international trade community more than a few weeks: three months. So are you expecting a huge response, just to get stuff that was maybe being held in warehouses onto trains and trucks, to ports, onto ships and then across oceans? Are you expecting just a flurry of activity in the next few months?

McCarthy: There’s definitely been the conversation where there is going to be an increase. A lot of the big guys will definitely be increasing their volumes while they know and they have stability in what the tariffs are saying. Some of the smaller groups won’t be able to react that quickly. But we do expect there will be a mild increase. In Oregon, it’ll be fairly stable. It won’t be as volatile as the big ports like Southern California, Port of LA, Port of Long Beach. But we do expect that a lot of these companies are gonna take advantage of the stability with the reduced tariff at this time.

Miller: Curtis, why is it that this could have a smaller effect in Oregon? As Tim has been saying, it’s the larger players that can react faster. Smaller ones maybe don’t have that luxury. Why is it that the Port of Portland is more likely to have smaller players?

Robinhold: One of the reasons is, of course, we’re about 100 miles up from the Pacific Ocean. So the vessel size is a little bit smaller. So, if you think about the number of containers that are moving up on a single vessel, you’re just on a smaller scale of impact when these adjustments come. But we’re also lucky to be a pretty well-balanced port, where both exports and imports run about the same level. So that’s really great for shippers. It’s also really great for Oregon farmers and ranchers, for example.

Containers come in from Asia and are sent to wherever they’re going. Let’s say it’s furniture or tires or whatever it might be, coming into the country. Then those empty containers are filled with product bound for Asia and we call that a balance of trade at the Port. For Portland, that’s pretty robust. It’s one of the things that makes it an attractive port and one of the reasons we think it’s an asset that Oregon businesses really need now more than ever. It helps get Oregon hazelnuts, or grass seed, or alfalfa out to markets in Asia and keep those Oregon businesses afloat. And the benefit is that it keeps us, as Tim described, a little more stable than some of those bigger ports that are almost entirely reliant on imports.

Miller: What would it mean for a wheat grower in Eastern Oregon or a hazelnut grower in the Willamette Valley? So, let’s say that they do have a market, that the tariffs have worked out in such a way that there is a market for their goods, but there are fewer ships coming to the Port from Asia, empty and ready for cargo. If that’s not happening, if the balance is different, what would that mean for Oregon producers?

Robinhold: Basically, for Oregon producers, it means they’re gonna have to look for other markets for their goods. I wanna just give you one little distinction here. If we’re thinking about wheat, that usually leaves in a bulk carrier. So that wheat is blown into the hold of a ship where containers, which hold things like hazelnuts and alfalfa, are on a container vessel where those boxes are stacked on top. But both of those exporters are gonna have to try to find other places to get to market.

More likely than not, that means they won’t be able to access that higher premium market that they get in Asia, and they’ll be selling into a lower value or even a non-existent domestic demand. [Like] a friend who farms apples at the Columbia River Gorge talks about, Oregon does not eat as many apples as we produce. So you’ve got to get those apples to market somewhere. And it’s not like my household in Northeast Portland is going to eat 100 apples a day. You’ve gotta get them out to market.

Miller: Right, this is a microcosm of global trade. China is maybe an egregious example, but they can’t consume a tiny fraction of all the stuff they’re making. But the same is true for an apple grower in the Yakima Valley, say, or in Oregon.

Tim McCarthy, just to take the bigger picture here of the Port, I have a feeling many of our listeners will remember the devastating labor dispute 10 years ago or so that eventually led to the closure of Oregon’s only international shipping container terminal. What has happened since then?

McCarthy: Well, it’s definitely different now. We’ve been able to recover and regain the confidence of the market because the ILWU (International Longshore and Warehouse Union), which was the problematic labor group during that time … the relationship has been rebuilt. We’ve been able to actually perform record move counts. And we’re beating most of the West Coast ports for the move count on vessels. That is because of the relationship with the ILWU ...

Miller: If I could interrupt, so that move count can’t be total tonnage, right, because you’re still small? So what is move count?

McCarthy: It’s the amount of lifts that we do per hour. So we always want to maintain at least 30 lifts per hour to keep consistent with the West Coast moves. And we’re always able to maintain, I think our average is, over 30 moves an hour on the vessels. Sometimes it dips due to different constraints on the vessel characteristics. But even during the downturn, because of labor disputes on the West Coast, Oregon is the one labor group now, after the recovery of the labor relationship, where we didn’t actually have a reduction, especially during the negotiations and in recent years. And I think it’s a testament to how the labor relations have been cured in the Portland region.

Miller: As I understand it, up till now, your company has managed labor and some aspects of operations at the Port of Portland. But you are poised to take on more operational responsibilities, to take over a lot of the functioning of the terminal. Why expand your presence at the Port now, at a time when there’s so much uncertainty surrounding global trade?

McCarthy: Yeah, it’s a great question. But overall, we have been operating the terminal from all the labor aspects since 2018, when we restarted the terminal for a rail hub and then expanded into the marine business. That’s what we’re passionate about. I personally have a lot of passion to help regain the Oregon shipping back and grow it back to help all the exporters and the importers in Oregon. We do feel that there’s a need there and for sure there’s highs and lows. We’re in one of the lows right now. We’re dealing with this global trade challenge.

But Oregon needs this gateway and they want it. Anytime that we have a request for people to join any committee or anything else, everybody’s very willing to be involved because they need this gateway to bring their cargo to the market. So we know the need is there. We know that there’s direct service to the Portland region, and then also the Oregon exporters and the farmers. So we have some excitement towards it. For sure, right now is a challenging time and I think it’s short-lived. We do expect that this will recover and that the growth will come back.

Miller: Well, Curtis, before we say goodbye, just to go for some numbers – as Tim was saying, the operating speed rivals, or is maybe better, than other West Coast ports. But the overall numbers really are down in terms of total container units coming into or out of the Port. In 2008, there were 245,000 of these units. Last year there were under 100,000. Are those days over?

Robinhold: Yeah, Dave, we’re optimistic about the future. Tim described it well. We’re bullish. Also, it’s worth noting we’ve got support of the governor and legislative leadership on both sides of the Capitol, really emphasizing that international trade is core to what makes Oregon Oregon. It’s not just business, it’s a way of life. People want to be connected to these markets.

So one of the reasons we’re in this partnership with Harbor is to grow that market to get back to those numbers that we’ve seen in the past. And we’re confident that Harbor’s the right partner to do that. Together, our sense is that we really have a bright future ahead of us for Terminal 6.

Miller: Curtis Robinhold and Tim McCarthy, thanks very much.

Robinhold: Thank you.

McCarthy: Thank you.

Miller: Curtis Robinhold is the executive director of the Port of Portland. Tim McCarthy is the chief operating officer of Harbor Industrial.

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