Port: Controversial terminal operator leaving
A potentially major step toward resolving the region's terminal container shipping nightmare happened Monday.
No cargo container boxes have moved out of the Port of Portland's Terminal 6 for years because of a dispute between its private operator and the union that provides most of the labor. According to a 2016 study, the shutdown cost Oregon exporters about $15 million a year in increased costs to deliver their products to other ports.
But on Feb. 27, the Port announced the terminal operator has agreed to leave.
According the Port, ICTSI Oregon Inc. has mutually agreed to terminate its 25-year lease agreement to operate the facility at Terminal 6. The agreement allows ICTSI Oregon to be relieved of its long-term lease obligations effective March 31, pending approval by the port commission.
In exchange, the Port will receive $11.45 million in compensation to rebuild business, as well as additional container handling equipment, spare parts and tools at the terminal.
International shipping companies stopped visiting the terminal after ICTSI accused the International Longshore and Warehouse Union of intentionally slowing work to protest its involvement there. The local union has been at odds with ICTSI for several years, accusing the Philippines company of being anti-union.The conflict caused all international shipping lines to stop serving the Port.
"Small businesses, farmers, agricultural producers, shippers and communities throughout the Columbia River region deserve and need a fully-functioning container terminal," ICTSI Oregon Chief Executive Officer Elvis Ganda said in a statement issued by the Port on Monday. "Hopefully, this agreement with the Port will make it possible for business to return to the terminal more quickly. However, ICTSI Oregon will continue to address the labor issues that gave rise to its decision to enter into this agreement and will pursue its legal claims against the ILWU."
Port Executive Director Bill Wyatt said the agreement is the best opportunity to launch a new strategy to restore carrier service for Oregon and Northwest shippers. "While the global carrier industry continues to undergo rapid change, we now have a new path to redefine our future in this business and launch new strategies to bring the terminal back to life," Wyatt said in the statement.
Wyatt also praised Gov. Kate Brown for working towards a solution. "I also want to thank Gov. Kate Brown for her long-term engagement on shipper solutions. The trade and logistics initiative will be invaluable as we assess future options at Terminal 6, a process in which the governor will be an integral player," Wyatt said.
In a subsequent statement, Brown said, "Container service is key to our trade-dependent economy, and I am confident the Port of Portland will take advantage of this opportunity to re-establish a crucial lifeline to rural Oregon and businesses across the state. Container service at Terminal 6 was one of the first issues I took on after becoming governor. I still believe Oregon businesses, the shipping community, those who work on the waterfront, and the Port of Portland will come together to develop a solution that supports Oregon's economy and creates jobs."
Portland Business Alliance President and CEO Sandra McDonough called the development positive.
"Oregon is one of the most trade-dependent states in the nation with nearly half a million jobs tied to international trade. A healthy Port of Portland is essential to our region's ability to grow those jobs and keep economic ties with foreign markets. We now have an opportunity to work together on new, creative strategies for improving shipping access for Oregon and Northwest products, making this good news in the long run for importers and exporters throughout the region," says McDonough.
The port says it signed a lease with ICTSI Oregon in 2010 to ensure a long-term funding mechanism for Oregon's only deep draft international container terminal. The Port will engage with a broad range of stakeholders including ocean carriers, shippers, railroads, truckers, barge operators, terminal operators and labor to create a new plan to bring business back to the terminal.
The ILWU did not immediately respond to requests for comment.
For a related Portland Tribune story, go to http://tinyurl.com/zry38l9.