On Monday, April 21 Councilor Tan and I attended the Port of Portland’s annual report to the community. The keynote was named “Gateway to the Globe” and it did show the vast reach of the Port’s businesses. Here are the highlights from Bill Wyatt’s remarks.
Gateway to the Globe
Bill Wyatt Introductory Remarks
Monday, April 21, 2014
As you saw in our video a moment ago, our airport is going gangbusters. We were voted America’s Best Airport by Travel and Leisure Magazine readers and we’ve reached an all-time high of 15.1 million passengers. Plus, we see those numbers continuing to grow as our airline partners increasingly see value in Portland routes.
And, we are not resting on our laurels. We’re planning great things for our terminal to stay on the leading edge—a new ticket lobby, reformatted Oregon Marketplace, revamped concourses and, of course new carpet. The carpet is the sign of home for many Portlanders who snap photos of their feet to announce their arrival or departure. And, as you’ve probably noticed, the carpet project has gone viral. The new carpet and the old now carry on a conversation on both Twitter and Facebook, socks and T-shirts are selling like hotcakes and there are even rumors of a new bicycle helmet and carpet tattoos!
Shifting now to the air cargo side, the picture is less bright. As an example of how our region is buffeted by the winds of global economic forces, a significant worldwide decline in international air cargo has resulted in consolidation of many all-cargo carrier routes including Asiana Cargo’s. The airline, which left the Portland market last year, consolidated its service in Seattle even though we still have very strong demand here. We’re working hard to replace that service which is so vital to our agricultural and high tech industries, so stay tuned.
On the marine side we’re seeing exciting new investment by our tenants at the marine terminals approaching a quarter of a billion dollars. That alone signals industry confidence in the movement of bulks and autos from our region. In addition to the auto import business, we’re now exporting Fords to China. Interestingly, while I was in China last week, I noticed that this business was highlighted in a center spread in China Daily.
On the downside, labor issues continue even though we received good news from Hanjin that they will maintain their Portland calls for now. I want to acknowledge our guests from Hanjin here today– Mr. Y.H Jung, head of Hanjin Shipping North America and his team, Rich Nuzzi, Chris Sur, Tom Yu, and Jeff McEwen. To each of you I offer my sincere thanks for your continued support of the Portland calls. I cannot over emphasize how important each and every one of those ships is to the Port and the communities we serve.
Over the course of the past several months we have had very candid discussions with Hanjin senior management both here in the U.S. and in Seoul. I assure you that the continuing issues have my full and undivided attention along with that of Oregon Governor John Kitzhaber as well as ICTSI-Oregon and the ILWU who are also represented here today.
Clearly, we must find a way to resolve the lingering problems. There is simply too much at stake. In addition to the vital access this service provides to global markets, it also provides more than 1,000 local family wage jobs. I ask you, what size headline would run in the Oregonian if a new employer announced it was bringing 1,000 new living wage jobs to our community?
The Hanjin service is worth retaining and growing, worth the concessions it will take on all sides, worth the commitment it will take to be open to new possibilities for success for all concerned. Let’s roll up our sleeves and get it done. Another blow to the Port this year was the unfortunate fact that our state lost its opportunity to build a new bridge across the Columbia that would have removed a bottleneck for both people and products.And the final blow, the Port had to abandon, for now, our efforts to annex West Hayden Island for future marine development. I still have faith that the day will come when wise people in the region will move this project forward.
I have made no secret of the fact that the outcome of the West Hayden Island annexation process was disappointing. The lack of appropriate zoning and new forms of mitigation the city proposed would have priced the 300-acre parcel at double the cost of other industrial land in the region, effectively pricing West Hayden Island and its unique maritime assets out of the market for private investment.The result: less industrial land, lost jobs, lost recreational and habitat development, and missed tax revenue for our city and region, as well as missed opportunity to take advantage of the Columbia River navigation channel deepening, as other ports up and down the river have already done.
Since the deepening of the channel–a $180 million, 20-year project– ports in the Lower Columbia and their private tenants have invested, or will invest, more than $3 billion in new or improved facilities. Had we the land, a significant portion of that would have occurred at our own port. Take the Port of Longview for example.Their new $230-million EGT grain facility annually pumps about $2 million in property taxes into the local economy benefiting schools, roads and other essential services. Construction of the facility created 200 jobs and about 50 employees now work at the site.
The important thing to note here is that EGT came to the Port of Portland first. We scoured Portland’s waterfront, checked and double checked existing Port of Portland properties, but we just couldn’t come up with the land to accommodate the facility. It was the same story when CECC, a methanol manufacturer, came knocking.
Again, lost jobs, lost business and lost tax revenue for our city.
All of this has made me question how much our city values its historic role in the manufacture and transportation of products and how truly committed this city is to growing our regional export-based economy. And, it brings me to my main topic today–the broader subject of trade—the manufacture and transport of goods and its role and value in our economy, both historically and in the future and what we must do to secure that future.
There are four key reasons why all of you should share my concern about this topic. First, it was this region’s exports that helped pull Oregon out of the recent recession. As has been reported in PBA’s Value of Jobs work and the studies by the Brookings Institution, Greater Portland is one of only a few metro areas to have doubled export value during the last decade.
Before the recession, metro Portland doubled exports in four years, reaching $20.6 billion in 2007. In recession-hit 2009, we dropped to $14.6 billion, but by 2012 we were back up to $18 billion in exports. Not all of those exports went through the Port of Portland but what concerns me more is how high this number could have been had we been ready, like other ports, to seize the opportunities of a recovering economy.
Second, I believe our city and state owe it to our citizens to plan for all types of jobs, not only for college graduates, but also for the 27 percent of all Portland high school students who don’t graduate and the other 30 percent who graduate, but never go on to college. If we fail to create jobs that are accessible to a diverse workforce, our society will become further stratified with a growing gap between rich and poor.
Nearly a half million Oregon jobs are supported by international trade; in the city of Portland about 268,000 jobs. Occupations related to the manufacturing and transportation of products provide a great opportunity for those lacking high school or college degrees. That is because wages are higher in this sector. Blue collar workers in exporting firms vs. non-exporting firms in the same sector earn wages that are 20 to 40 percent higher.
More over these jobs are a major source of upward mobility for communities of color. In 2008, manufacturing and transportation made up 18 percent of jobs held by people of color in Multnomah County, compared to 10 percent of the jobs for white employees. Portland does great in creating opportunity at the edges (in retail and food service on one end and creative/high tech on the other end, for example) But we are losing the well-paying jobs in the middle.
Third, for the individual company in today’s unpredictable economy, diversified markets can be the difference between sustaining and growing a vibrant endeavor and declining prospects. With 95 percent of the world’s consumers living outside of the U.S. and a stagnant domestic market, foreign exports directly represent an opportunity for companies to access new buyers, increase sales, and create jobs. Seventy five percent of Intel’s revenue, for example, is international and, according to the Brookings Institution, there will be $31 trillion in consumption worldwide by 2020.
Fourth, I believe we truly are the Port AT Portland, serving the entire state.
All of us must be mindful that if rural Oregon, as well as partners throughout the region, aren’t successful, our city and state are going to have an increasingly difficult job of funding the things that contribute to overall quality of life—like social services, schools, public safety and parks. To us at the Port, there is no urban/rural divide. Our promise to farmers in Pendleton is just as strong as our promise to high tech engineers right here in Portland. The Port provides access to markets via sea and air for the entire region and state.
Further, it is Oregon’s tradition of trade that has served as a foundation for the growth of industry here today.
Poised at the confluence of two major rivers, Portland began as a trade center and decisions made throughout our history have bolstered that position and shaped our economy. Let me take you back in time to some critical decision points in our history of trade and what it has meant to just one of our targeted industry clusters—outdoor gear and apparel.
Back in 1860, a year after Oregon’s statehood, Senator Henry Corbett served as one of the leaders of the Oregon Steam Navigation Company, a floating transportation and product delivery network along Oregon’s rivers.
In 1865 Mayor Henry Failing, who later served as President of the Port of Portland Commission, authorized the city’s purchase of its first dredge to ensure larger ships could ply the Willamette. In 1883, Senator Corbett successfully lobbied for federal funding for a transcontinental railroad to run through Portland and in 1891, the Port of Portland was formed.
Our fate as an international manufacturing and trade center was sealed and Portland thrived.
By the mid-1920’s Portland had become the manufacturing and marketing center of Oregon with flour mills, sawmills, wool mills and small clothing businesses. Key to their success was the infrastructure to move products to market. By 1921 Portland had ten rail lines and 36 steamship lines. Our first commercial airport opened on Swan Island in 1927. Huge cargoes including lumber, wheat, flour and apples moved down our river. Key among them was wool, which was our region’s top export, and Portland was the second largest wool manufacturing city in the United States.
Our city led the West Coast in the export of raw wool as well as manufactured woolen products. Between 1920 and 1921, wool shipments from Oregon, Washington, Idaho and Montana through Portland grew from 543,000 pounds to 22 million pounds. During this time, Oregon also became known as the world’s largest manufacturer of knitted swim suits thanks to Jantzen founded in 1910 and whose suits were favored by America’s Olympic athletes in 1920. In 1917 the company produced 600 bathing suits and by 1925 that number increased to 431,000 per year.
Pendleton Woolen Mills, founded in 1863 and known for its blankets expanded into woolen suiting and wool sportswear. White Stag, founded in 1884 went on to pioneer the concept of ski clothing as fashionable rather than just functional athletic apparel in the 1930s. Fast forward to today where Pendleton still produces woolen fashion and home décor and where other sheep and cattle ranching enterprises are still putting Oregon on the map.
Consider the story of Dan and Jeanne (Jeannie) Carver whose 35,000-acre,143- year-old ranch in Wasco County and its Imperial Stock Ranch yarn was sought out for Ralph Lauren’s US Olympic team opening ceremony sweater this year. In 2000 the Carvers went from just producing wool to producing yarn and some consumer goods—teaming up with retailers like The Real Mother Goose that has an airport store at PDX. They also worked with Norm Thompson, another outdoor gear and apparel pioneer, to develop fabric and apparel items for the “NT” line of clothing.
And then the call came from Ralph Lauren. Let’s listen for a moment as Jeanne (Jeannie) tells her story.
(Jeanne Carver, recorded remarks….)
So, let’s just say things are looking up for Imperial Stock Ranch. Doors are now opening all over the world and yarn sales have doubled. For the Ralph Lauren project alone, 6,250 pounds of yarn were ordered and more than 5 million yards of yarn were spun.
We should note that sheep and wool aren’t the only things Imperial Stock ranch produces. Their 35,000 acres also produces cattle, hay, grasses and wheat—shipped through the Port of Portland I might add–and it is these products that provide more than two thirds of the Carver’s income.
While Imperial Stock Ranch was not the only Oregon company at the games– it reminds us of the importance of the global marketplace to small and large businesses–and really, to all Oregonians–and the pride we can take from something home grown, authentic and traceable back to its roots in our shared history.
(Jeanne Carver, Recorded remarks…..)
It cannot be disputed that the largest local names in the outdoor gear and apparel business-Nike, Columbia Sportswear, and adidas did—and still do–play a critically important role in the growth of the industry–an industry that today employs more than 14,000 workers with a total payroll of 1.2 billion and an average wage of more than $80,000 per year.
But it is important to note that it was the heritage firms who helped provide a strong talent pool, established trade lanes and built a nurturing environment for expanding or start-up companies.
Early pioneers like Pendleton, Imperial Stock Ranch, White Stag, Jantzen, Columbia Sportswear, and Norm Thompson laid the foundation for the growth of a tremendous industry here, an industry where supply chain and transportation logistics have played and will continue to play a critical role.
We are all standing on the shoulders of companies like these.
Whether shipping materials and products via air or sea, or flying via PDX’s nonstops to markets and suppliers all over the world, the Port of Portland is still serving this industry and plans to continue to do so.
Today we are largely an import Port for this industry sector with about 3,000 containers of shoes and apparel imported in 2013 through terminal 6. But as local companies diversify, or like Imperial Stock Ranch, find new market opportunities, we need to continue to ensure cost effective access to those global markets.
The question I pose today is; what existing enterprises will have new doors opened and require efficient access to customers and suppliers across the globe?
What new industries will rise from Oregon’s strong raw materials, manufacturing and design foundation to serve the generations yet to come?
Where will they manufacture their products and how will they move them?
Only by making smart investments in our trade and transportation infrastructure, in land on which to grow industrial jobs for all levels of employment; only if we continue ensuring our roads, rivers, rails, runways and real estate support the production and movement of goods, can we maintain Oregon’s tradition of trade, build upon Portland’s historic role as a trade gateway and leverage both for a bright future.
The city’s export strategy and its recent selection to participate in Brookings’ initiative on metro foreign direct investment is a good start. The Export Strategy aims to double exports by 2017, add 21 billion dollars in foreign sales and create 100,000 new jobs.
But, my concern is that our economic development strategies are not closely tied to our transportation and industrial land use strategies and hence, these worthy goals may not be realized. We must embrace the vision of our early city leaders and build upon their forethought and investment.
A recently conducted survey has shown that 80 percent of respondents believe that international trade will become more important to Oregon’s economy. They also feel that providing a variety of family wage jobs is the most valued economic development benefit when it comes to international trade. And, a strong majority wants their elected officials to be working in partnership to promote international trade.
Now we just need more of those voices to enter into the debate.
In the months ahead I ask for your active support for trade and transportation infrastructure investment, land to grow jobs and ensuring economic opportunity for all citizens. Portland is once again at a trade and transportation crossroads.
Shall we abandon our past or use it as a foundation to build a bright future filled with opportunity and choice for our kids?
Shall we leave rural Oregon to fend for themselves or provide the cost effective transportation options they need to succeed?
It is up to us.