Oregon’s Port of Portland Gets State Funds to Maintain Container Ops

Portland Oregon
SM Line began operations to Portland in 2020 (Port of Portland)

Published May 17, 2024 5:41 PM by The Maritime Executive

The Port of Portland, Oregon’s only ocean-going seaport, announced it will reverse course and not suspend container operations. The move came after the state’s governor, Tina Kotek, released a letter on Thursday reporting she would provide stop-gap funding and would include long-term funding for channel maintenance in the state’s budget. In total, she is proposing $40 million in future support to the port and its container operations.

“Farmers, union members, shippers, and business leaders have all asked me what the state can do to keep this important service in place,” Governor Kotek wrote in announcing her decision. She said the port and specifically the container service provides a competitive advantage for Oregon growers and other businesses which would have been forced to truck their shipments hundreds of miles to neighboring ports.

In April, it leaked out into the media that the port authority had sent a letter to shippers informing them that it would be ending container operations at the port as of October 2024. The port reported losing $30 million from the container operations over the past three years, including a projected $14 million shortfall this year. They said talks with an independent operator had collapsed and that they had no other choice but to end container service at the T6 Terminal but would maintain the bulk, RoRo, and other operations at the port.

“The port has been working to rebuild container service since taking over the operation in 2018, following a temporary shutdown under former operator ICTSI,” the port authority writes in its response to the governor. “Without direct state support or a financially acceptable third-party lease, container operations have not been sustainable.”

The governor said it was important to send a strong signal to the state’s business partners and as such she would ask the legislature for $5 million in September to stabilize near-term operations at the port. It is part of an overall $40 million investment she said the state would be making to support the continuation of container service.

In offering the funding and support, the governor said she understands that the port’s location makes container operations economically challenging. She cites the limitations of an upriver port within a relatively small metropolitan area, saying she understands they can not fix those limitations. She however calls on the port authority to use the state’s commitment and to pursue an aggressive strategy to make the container operations sustainable for the long term.

“I expect the port to pursue all viable strategies for making T6 operations sustainable over the long-term,” writes the governor.

In addition to the stop-gap funding, she said she will include an initial investment of $15 million for dredging of the Lower Columbia River. She says the state previously committed nearly $28 million but notes the federal project is due to expire in 2025. She expects up to $70 million will be required in a new round of investment for the river. 

She also recognizes the high cost of repairing and replacing needed infrastructure at the port to support container operations. As part of the 2025-2027 recommended budget, she will also support a $20 million investment in a capital program to support container operations.

The Port of Portland has had a difficult history with container operations. They attracted ICTSI to operate the terminal but the company became embroiled in a dispute with the union that ultimately led to the company walking away and a long legal battle. The legal battle was recently settled, but the port had attempted to run the container terminal. It attracted several lines including SM Line during the pandemic offering an uncongested alternative.

Port officials came in for strong criticism from the union, elected officials, and others when they confirmed in April the decision to suspend the operation. In a press release, they said they were grateful to the governor for the declaration of support and for helping to maintain the operation.