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Oregon’s Port of Portland to Suspend Container Operations as Losses Grow

Portland Oregon container terminal
Portland will suspend container operations due to mounting financial losses (file photo)

Published Apr 16, 2024 7:01 PM by The Maritime Executive

 

Oregon’s only ocean seaport, the Port of Portland, informed shippers yesterday that it plans to suspend container operations as of October 1. Like many smaller, regional ports, volumes increased during the pandemic as they provided an alternative to the congested major seaports but as the industry returned to normal volumes, Portland has seen its financial losses grow.

Port executive Keith Leavitt wrote to shippers saying they had decided to suspend the operation after negotiations with a potential third-party operator collapsed last week. He said they had not expected this outcome but without the prospects of an operator, mounting financial losses, and the lack of financial support from the state, they needed to suspend container operations. The port will continue to handle its RoRo car and vehicle operations as well as break bulk and heavy cargo.

The port cited its fixed costs saying that it had made it difficult to expand the container service and more costly for shippers using the port. They had hoped to have a larger operator that could spread the costs over broader operations. They said while volumes had steadily increased since 2019, the port has lost more than $30 million from the container operations over the past three years, including a projected $14 million shortfall this year.

While Terminal 6 has berths for five vessels and seven container cranes, including four Panamax cranes, port officials acknowledged the facility “faces a number of unique challenges.” It is more than 100 miles from the ocean and the Columbia River has limited depth to accommodate the largest vessels. In addition, they said it is a relatively small consumer market and they were further hurt by the loss of a rail service partner BNSF that had provided a connection to Seattle and Tacoma.

Suspending the container operation will be especially difficult they said for the agricultural and seafood sectors which use the port. They will have to truck goods through other ports, raising costs. Container operations also supported as many as 1,500 jobs in the region.

As late as last month, port executives were holding out hope that they could maintain the container operation. They had asked the state for $10 million in support but lowered the request to $8 million after meeting with carriers who committed to helping with the operation. The goal however was a long-term lease with a third-party terminal operator.

It is not the first time the port has had problems with its container operations. In 2010, it made a deal with ICTSI to operate the container terminal but the company became embroiled in a labor dispute that dragged on for years. The labor slowdown began in 2012 and by 2015 carriers were leaving the port. ICTSI pulled out of Portland in 2017. The International Longshore and Warehouse Union (ILWU) filed for bankruptcy in 2023 due to the dispute but finally reached a settlement agreement with ICTSI in 2024.

The port became its own manager for container operations. In 2020, they marked the return of container service including an agreement with SM Line.

Lawmakers failed to include the financial support in the state’s new budget but left open the possibility of future discussions. Port officials said they were still looking for future alternatives but currently, they do not have the funding necessary to maintain the operations.