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Abstract
A recent issue impacting freight shipments in Washington State involves the reduction of container
services at the Port of Portland, Oregon. Prior to this change, export containers filled with hay were
shipped almost exclusively via barge down the Columbia River to the Port of Portland. After reaching
Portland, the containers were then loaded onto one of three ocean container lines: Hyundai, K-Line,
or Hanjin and destined to markets in Japan and China. As of September 2004, Hanjin is the only
remaining carrier that calls at the Port of Portland.
This research effort has collected firm level data on the production, transportation and marketing of
hay in Washington and incorporates this information in the design and development of a
transportation optimization model of regional hay movements. This model is then utilized to evaluate
industry shifts in transportation usage and modal choice in reaction due to these industry changes
after September 2004.
The results indicate that after all barge and hay shipments are eliminated into Portland, region-wide
transportation costs actually decrease initially overall, while some individual producers experience
increased shipping costs. Both rail and truck volumes increase substantially in the absence of
container shipments on barge. The total industry impact is a $6.3 million increase in transportation
costs from the Base Scenario to Scenario 3. Also, once truck rates are allowed to increase due to the
shortage of trucks and the increased demand for truck services, the total transportation cost
increases by $8.7 million.
As trucking rates increase due to the increased demand for trucking services, the industry
transportation cost does increase to $47.5 million, a 15 percent increase from Scenario one and a 22
percent increase from Scenario two. While this increase is significant, it is not as severe or adverse
as previously expected throughout the Pacific Northwest agricultural and hay industry. As expected,
there is greater reliance on rail and truck transportation once barge shipments to Portland are
eliminated.