Coos Bay Port Hopes to Land Big Shipping Hub

By Richard Read, The Oregonian, Portland, Ore.

Apr. 4–Despite its cosmopolitan name, the Oregon International Port of Coos Bay primarily sends wood chips to Japan, loading bulk vessels instead of the container ships that shuttle fancier products worldwide. A single train track completed in 1916 connects the small port to Eugene, 120 miles away.

So it may come as a surprise that the U.S. arm of Danish shipping giant A.P. Moller-Maersk Group is considering Coos Bay for a terminal that would handle a new generation of megacontainer ships. APM Terminals North America Inc. could ultimately spend about $700 million building a modern shipping hub on the bay’s North Spit, Oregon legislators say.

Company representatives declined to comment, and Coos Bay officials won’t confirm the reports, citing a confidentiality agreement. But the officials say the general concept, which would include upgrading the rail line, could turn into something handsome.

“This is a frog, and we continue to keep kissing this frog in hopes that it’ll be something better than a frog,” says Martin Callery, the Coos Bay port’s director of communications and freight mobility. “We’d like to see it turn into a prince, but we have to be realistic about it.”

Steamship companies are scouring North America’s West Coast for port locations because Asia’s exploding exports threaten to overwhelm existing cargo hubs. Asia-Pacific container traffic is expected to increase by 50 percent before 2020, and to double by 2035. Already ports from Los Angeles to Vancouver, B.C. — and their shipping lanes and rail lines — are backing up, necessitating expansions until they run out of land and transport links.

So the Coos Bay port commissioned a study this year outlining a terminal that could initially handle more than twice the Port of Portland’s current container volume. The terminal, which would open in about 2014, would eventually handle enough freight to fill a million tractor-trailer trucks a year. The study predicted terminal operations at their peak would create almost 2,500 jobs at an average $52,000 annual wage.

Those numbers excite residents of Coos County, which has struggled to develop its resource-based economy.

But the plan faces various obstacles. The rail line would require tens of millions of dollars in improvements, Callery says, and steamship companies tend to avoid ports that lack competing railroad companies.

Ocean carriers also tend to invest in larger cities that offer markets for goods, instead of unloading containers that must mainly be transported thousands of miles inland. And the new jumbo ships require deep water — more than 50 feet deep, compared with Coos Bay’s authorized 37-foot draught.

Yet international port experts such as Ogden Beeman, a Portland-based maritime consultant, say Coos Bay could actually surmount those obstacles given industry growth projections. “If they can overcome the rail situation and the channel-depth situation,” Beeman says, “maybe it’s viable.”

Oregon Sen. Joanne Verger, D.-Coos Bay, is co-sponsoring legislation that would appropriate $5 million for permits and environmental assessment of dredging. Senate Bill 21 would authorize $55 million more for dredging, if the U.S. Army Corps of Engineers gave the go-ahead with matching federal money.

Rep. Arnie Roblan, a fellow Coos Bay Democrat also sponsoring the measure, says APM Terminals managers described the port as their No. 1 choice six weeks ago, during a meeting with legislators in Salem. A decision could come within four to six months, Roblan says. A rival site in Mexico also remains in the running, Verger says.

Port of Portland managers, who might be expected to see the terminal as competition, said Tuesday that they would welcome it. A dredging project is expected by 2009 to deepen the 40-foot Columbia River shipping channel to 43 feet. That’s far short of the jumbo ships’ required depth, meaning that Portland and Coos Bay would occupy different business niches, says Sam Ruda, Port of Portland director of marine and industrial development.

Astoria, which could be seen as another candidate port, can only look on in envy. The port at the mouth of the Columbia lacks the land area for a giant terminal, let alone the necessary water depth and rail and road access, says Ron Larsen, Port of Astoria acting director.

But Larsen says of APM Terminals executives: “I would certainly love them to come and talk about it.”

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