Terminal six sprawls across more than 450 acres between North Marine Drive and the Columbia River. It's the most modern and profitable of the Port of Portland's four operating marine terminals. Towering over the dock are seven cranes, their bull-rails rearing up 190 feet in the air. These steel creatures look like they might break away at any moment to wage war on some George Lucas-inspired battlefield.

There's a rhythm to the activity here. Trucks crisscross the dock; others queue up below the cranes to deliver their cargoes. A spreader beam drops from a crane and clips onto a container. The box is lifted onto the Tokyo-bound vessel, adding to the patchwork of red, white and blue containers stacked six stories high on deck. The choreography unfolding at T-6 offers a tiny glimpse into the intricacies of moving goods in the international marketplace, where on-demand delivery -- even if the product is headed to a Shanghai retailer 4,000 miles away -- is a must to remain competitive.

For thousands of businesses in the Pacific Northwest -- from Nike importing sneakers from its Chinese contract manufacturers to Oregon fishermen exporting sardines to customers in Korea -- the port is a critical bridge to and from Asia. Ten million tons of homegrown crops, bulk minerals, automobiles, timber and other waterborne cargo move across port docks each year.

The port has so far managed to ride out the economic storms raging across the Pacific and at home. Its market niches -- auto imports, agricultural exports -- are doing well. But threats loom on the horizon.

Consolidation in the shipping industry has created a cutthroat global market. A wider Panama Canal,Êwhich might happen in the next decade, could entice steamship lines to sail directly to ports on the East Coast and Gulf of Mexico, bypassing the Northwest altogether. All the ports on the lower Columbia -- Portland, Longview, Vancouver -- face navigational challenges, including a channel that's not as deep as those of competing coastal ports and higher piloting costs to get over the treacherous Columbia bar. Finally, Portland's small population compared to other West Coast markets limits its ability to attract container traffic, the biggest moneymaker in the business.

"Container companies are willing to suffer inconvenience to go to the big load centers," says Bill Wyatt, the port's executive director. "They will not suffer inconvenience to come to Portland, so we have to play it smarter."

Port boosters are counting on the Army Corps of Engineers to eliminate one of Portland's most serious inconveniences -- its shallow approach from the sea. Despite serious financial and environmental questions about the project, port officials say they're confident that in the end the Corps will dredge the Columbia channel from 40 feet to 43 feet to allow the next generation of fully loaded big ships to make it to Portland. Not to do so, port leaders say, would doom the region to second-class maritime status and make the port unable to compete for the most lucrative export and import business.

Over the next 20 years, the port will attempt to further develop its niche markets and capitalize on its efficiency compared to more congested West Coast mega-ports. Key selling points are Portland's easy access to highway, rail and barge links, plus available land in the region for port-accessible distribution centers.

But these advantages alone won't keep the Port of Portland from being swamped by larger rivals. It's clear that the future growth of the port, and the financial survival of farmers and businesses that rely on it, will depend on more collaboration among Columbia River ports.

Even more critical will be cooperation between the ports of Portland, Seattle and Tacoma. Rather than fighting one another tooth and nail for business, a Pacific Northwest port authority flexing its collective muscle could deliver a whopping competitive advantage. And the lobbying strength of Northwest ports bringing a unified message to Washington, D.C., could attract more federal dollars to the region for badly needed highway and bridge upgrades.

Trying to create such a partnership also raises big challenges. "It would be like asking Gresham or Beaverton to merge with Portland," says Paul Chilcote, a former senior director of intermodal transportation at the Port of Tacoma. Still, considering the population density advantage of Southern California, the cost to the Pacific Northwest of not exploring a united front, no matter how complex and daunting, could prove devastating in coming decades.

More automobiles, wheat and bulk minerals move through the Port of Portland each year than through any other West Coast port. Waterborne cargo increased from 7 million tons in 1980 to almost 12 million tons in 2000. The port's recently adopted Marine Terminals Master Plan calls for doubling that amount by 2020.

More than 4,000 people are employed directly at the port terminals, while related maritime companies create another 34,000 jobs. The port operates seven business parks and the airports in Portland, Hillsboro, Mulino and Troutdale. It generated $203 million in state and local tax revenue in 2000.

Four times more goods are shipped out of Portland than come in each year. That's due mainly to the steady flow of grain and agricultural products being delivered to outgoing ships on barges from Eastern Oregon, Washington and Idaho and on trucks driving up the Willamette Valley. Another major contributor is bulk minerals (potash, which is used as a fertilizer, and soda ash, an ingredient in glass-making), which are brought in by rail and poured directly into ships' holds.

Rail service is key to Portland's success. The Burlington Northern Santa Fe rolls down the north shore of the Columbia River into Vancouver. The Union Pacific streams through the Gorge on the south bank into Portland's vast rail yards. Together, the two lines provide importers and exporters with the most efficient and affordable means of transporting goods to and from the American heartland.

For instance, it costs $250,000 to bring 110 rail cars loaded with soda ash into Portland along the Columbia Gorge, says Wyatt. "To take that same train over the Cascades [and into Puget Sound], you need to add three more engines, so it becomes cost-prohibitive."

The Snake and Columbia river barge system, meanwhile, delivers exports to Portland from as far as 500 miles inland, providing farmers a cheap way to get their produce to Asian markets. But there's a downside to the river system. To float upriver to Portland, steamship companies have to pay for a bar pilot to navigate the treacherous Columbia River bar and a river pilot to guide the ship through the channel. As a result, it's more expensive to call for cargo in Portland than in other West Coast ports. "Truthfully, it's a small fraction of their overall costs," says Ogden Beeman, a maritime consultant who was marine director in Portland in the 1970s. "But it's a great point to beat us up on."

The auto import business has become a profitable niche for Portland, one it plans to expand. It's a perfect matchup. The ships carrying autos draft no more than 35 feet and fit comfortably in the current river channel. Rail service through Portland then moves cars efficiently to Midwest and East Coast markets.

Toyota recently renewed its lease at the Port of Portland and will continue to import cars through its 86-acre facility at T-4 for at least another 15 years. Hyundai, Honda, Ford and General Motors also have operations in Portland, and the port plans to go after the Kia account, currently held by the Port of Tacoma, when it's up for renewal in the next two years. The port hopes to boost the number of autos moving across its docks from 385,000 in 2000 to more than 500,000 by 2020.

With leases ranging from 15 to 25 years, auto tenants offer stability. Revenue generated from autos is small ($4.9 million in 2001) compared to the container business ($38.8 million), but it does help support capital improvements and business development. Plus, the auto business keeps the railroads happy and investing in their infrastructure by providing a steady stream of eastbound cargo.

The port has set aside 237 acres to accommodate expansion in its auto business. And West Hayden Island, an 825-acre port-owned tract in the Columbia channel near both rail lines, could eventually be developed as an auto facility. However, environmentalists and Hayden Island neighbors have organized against any development, and the property is currently being held in strategic reserve.

Land availability could end up being one of the Columbia River ports' best selling points. Competing West Coast ports -- especially those in Southern California and the Puget Sound --Êare facing a serious land crunch and are more interested in expanding container volume than attracting land-intensive auto tenants.

Meanwhile, a surplus of industrial land -- especially on the Washington side of the Columbia -- could make the region a West Coast hub for the distribution operations of U.S. retailers importing finished goods from Asia. Virginia-based Dollar Tree Stores recently broke ground on a 650,000-square-foot distribution center in Ridgefield, Wash., about 15 miles north of Portland, that will bring increased container imports into Portland and help ease the export imbalance for steamship companies.

Portland's biggest challenge going forward will be in the lucrative container business. The port owns just 1% to 2% of the West Coast market -- even though containers are projected to account for 69% of Portland's marine revenues this year (see the port of portland by the numbers, p. 20). The best-case scenario laid out in the port's Marine Terminals Master Plan calls for more than doubling container volume by 2020. Scratching out any gain, though, will be tough. The container business is fickle, and competition is brutal. With no loyalty to any one port among steamship companies, and contracts lasting just one to three years, business can be snatched away in a moment. And Portland's inland location and its relatively small population put the port at a distinct disadvantage.

"Every single steamship line calls at L.A. and Long Beach. That's where the people are," says Beeman. "There's no population here and no big drive to bring containers here."

What does draw container ships to Portland is exports. Steamship carriers hunting for bulk cargo to fill their ships before heading back to Asia can find a ready supply in Portland, with its steady stream of farm and mineral exports, and the revenue they gain far outweighs the time and money expended sailing up the river. That's been the case recently. The problem is that when there's ample cargo available in other West Coast ports, "steamship companies may drop Portland because they can fill their ships elsewhere," says Beeman.

The challenge for Portland is to turn its size into an advantage by catering to smaller carriers that might not be as welcome at larger, more congested ports, because they take up space and generate less revenue.

Portland recently landed South American carrier Maruba/CCNI, which began calling in Portland in May. The Nordfalcon, one of the smallest ships coming through the port, will drop off wine, coffee and pine lumber twice a month and pick up hay, animal feed, frozen french fries, forest products and grass seed. The new service helped make May a record month for container service at the port.

"We're a small enough port, with robust physical infrastructure, so Maruba is not considered a nuisance here," says Carl Warren, business development director at the port. "That's the type of carrier we want to attract."

Portland's share of the container market could also get a boost from value-added agricultural exports. If demand continues to increase in Asian markets for Oregon-grown organic and sustainable produce, "it could be a nice revenue generator for the shipping lines and would provide a real incentive for container ships to come to Portland," says Beeman.

Going it alone in the international maritime marketplace is becoming increasingly risky. It's even riskier for the Port of Portland, already at a disadvantage because of its smaller population and upriver location. As competition increases, a pumped-up status quo -- new auto tenants, smaller container ships and distribution centers -- isn't going to be enough to keep the Port of Portland growing and thriving. What might, though, is cooperation among Columbia River and Pacific Northwest ports.

Creating such an alliance would mean overcoming deep-rooted interstate and port rivalries, political constraints (Oregon port commissioners are appointed, Washington's are elected) and many other consolidation challenges. But there is a precedent. Collaboration among Columbia River ports dates back to the installation of hydroelectric dams beginning in the mid-1950s, and recently six lower river ports joined together to lobby the Army Corps of Engineers to deepen the channel.

But competition on the lower Columbia is fierce. Collaboration on mutually beneficial projects is the easy part. What's not so easy is to jointly allocate marine business based on who does what best, or to send a potential Port of Portland customer across the river because a rival Washington port has the perfect shovel-ready site. Consider the bidding war that broke out over Danish windmill manufacturer Vestas. Close to signing a deal to locate a major production and distribution operation at the Port of Portland, Vestas then expressed doubts about the amount of land available for expansion. Port officials in Longview and Vancouver pounced at the chance to lure the company across the river and entered into active discussions with Vestas. In the end, nobody won. Vestas' plan is now on indefinite hold due to global economic conditions and uncertainty about federal wind energy subsidies. "We have gone head to head with Portland, and we will continue to do so," says Larry Paulson, executive director at the Port of Vancouver USA. "There's always the concern that Portland is the big boy on the river, and they are. We've had discussions about how to work together, but it's not easy."

A regional consortium among the ports of Portland, Seattle and Tacoma would be even trickier to convene and manage.

"All three ports are somewhat paranoid of one another," says Chilcote, the former transportation manager in Tacoma. "[Cooperation] is something we've debated in Seattle and Tacoma for years, and it's tough."

That doesn't mean it's impossible. Puget Sound ports have worked together to ease congestion, and Chilcote sees no reason why Portland shouldn't be included in future discussions addressing rail, freight and highway infrastructure. And the Port of Vancouver has had discussions with Portland about how best to develop Vancouver's Gateway industrial property to avoid overcapacity of marine facilities in the region.

Such discussions could lay the foundation for more formal partnerships and even a single governing body. "It's clear to me that the future is eventually one port on the Columbia River," says Port of Portland Commission president Jay Waldron, who also supports collaboration between Columbia River and Puget Sound ports.

"Our competitors are Vancouver, B.C., Oakland, L.A. and Long Beach," says Waldron. "We could leverage our advantages to a greater degree working together." As the already crowded Southern California ports become more squeezed for space, he says, the need for less congested outlets to move goods will increase. The Pacific Northwest could be the ideal escape valve.

"Until it's defined in practical terms, you'll never get anywhere. The devil is in the details," says Jim Brennan, a mari-time consultant with Norbridge Inc., in Virginia, who's worked with every major Northwest port. "But if the airline, railroad, container shipping and trucking industries can find ways to cooperate, why can't the ports?"

It's the year 2030, and regional members of the powerhouse Northwest Port Authority are sitting down for their quarterly meeting. At the table are the agency's executive director, local representatives from the lower Columbia River and Puget Sound member ports, officials of environmental groups and Native American tribes. On the agenda: Identify land for an international fuel cell manufacturer interested in siting a distribution center in the Pacific Northwest, expand the solar-powered grain-loading project at the Port of Pasco, review strategy to win back the Hanjin account (with ships calling at Seattle, Tacoma and Portland) from Oakland.

This scenario may seem farfetched today, but by thinking regionally when planning for the future, Pacific Northwest ports could better withstand external challenges and be better positioned to compete against ports in California.

The thrust of any Northwest partnership would have to be expanding the overall market for maritime trade, says Mike Thorne, former executive director of the Port of Portland and now the chief executive of the Washington State Ferries. "It doesn't help any port if you take a fixed amount of activities and spread it around. An effective partnership could be built around how [the ports] could serve a broader market. That's a foundation for joint efforts.

"If we agree on a vision, it can't stop at state boundaries," Thorne continues. "In Idaho, Oregon and Washington, there needs to be a more global picture as to how to serve the region's needs. If you don't do that, you're not going to succeed."

In a region that embraces green business practices and salmon restoration, it's no surprise that the Port of Portland often finds itself at odds with environmental groups. "The port has used the river as a dumping spot with no regard to water quality and fish health," says Don Sampson, executive director of the Umatilla Tribe in Pendleton and past

Director of the Columbia River Inter-Tribal Fish Commission. "Only recently have environmental concerns come to the forefront," he says.

The port adopted an Environmental Management System in 2001 and hired its first director of environmental affairs last year. Since then, according to the port, it has become one of the region's top-10 purchasers of green power, increased the number of alternative-fuel vehicles in its fleet by 24% and initiated five water conservation projects.

But no amount of green ink can change the fact that the port is one of the largest landholders in the six-mile Willamette River Superfund site. And the bitter legal battle waged over the plan to deepen the Columbia River channel to 43 feet has left a stream of angry watchdog groups in its wake.

A healthier balance must be struck between industrial development and environmental preservation, says Sampson, whose tribe uses the port to export grain. He suggests the port establish an environmental fund to enhance monitoring of cargo, recruit sustainable tenants, pay for shellfish restoration and other projects. And, he says, if Columbia River ports ever do operate under a single governing body, members of tribes and environmental groups should take part. Nina Bell, director of Northwest Environmental Advocates, which sued to stop channel deepening, thinks the only way the port can be a long-term asset to the region is for it to turn its business plan on its head. "The port has to be willing to clean up and restore the huge environmental messes it has made in past decades," Bell says. "It's going to have to focus more on niche markets, rather than trying to be the 'Wonder Port of the West,' which it can't be even if the channel is deepened by 3 feet. The port isn't going to vanish, but it is going to have to figure out a way to prosper without huge growth."

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Copyright 2003 Oregon Business magazine