Container service will remain at the shipping facility thanks to a new long-term agreement with private operator Harbor Industrial.
Container shipping will remain in Portland for at least the next seven years as officials this week agreed to terms with a California company to operate the Port of Portland’s Terminal 6.
Last year, the future of the terminal — the state’s only active international container terminal — was in doubt as the port struggled with reduced cargo volume, the loss of BNSF rail service and increased operational costs.
On Wednesday, the port’s appointed commissioners unanimously approved a lease agreement with Harbor Industrial Services Corporations with four options to extend the deal in five-year increments.
The process to find a private operator for Terminal 6 stretches to 2018 but in the end, the port settled on a firm that’s no stranger. Harbor Industrial currently operates the terminal in a partnership with the port.
“With this agreement now in place, we are in a stronger position to provide regional shippers with the stability they need to grow their businesses, which in turn will drive economic growth and strengthen the local economy,” said Harbor Industrial CEO Tim McCarthy.
Following Wednesday’s vote, assembled supporters and commissioners burst into applause.
Harbor Industrial will officially take over container service at Terminal 6 on Dec. 31.
For many Oregon businesses, T6 is a vital gateway for the global marketplace — for major exports like hay, grass seed, hazelnuts, tires, apparel and wine. In total, Oregon exports $42 billion of goods and services per year and the 420-acre terminal facility handles cargo for some of the state’s largest businesses.
Martin Son, president of NH-Hay, an Albany-based company, which shipped 90,000 metric tons of hay and straw through the port last year, praised the new lease agreement.
“Terminal 6 plays a critical role in keeping our operations running smoothly and helping us stay competitive globally.
Under the lease with Harbor Industrial, the port effectively becomes the facility’s landlord, responsible for maintenance and upkeep. Harbor Industrial’s “rent” will be determined by the amount of cargo that moves through the terminal, though the company is required to make payments of at least $27 million during years three through seven of its lease.
“This critical infrastructure supports 1,500 family wage jobs across the state of Oregon,” Teresa Carr, the port’s director of business development and properties, said at Wednesday’s meeting of the Port of Portland commission. “It’s a really critical asset for us to maintain, with significant economic impact.”
“Scores of businesses throughout Oregon rely on Terminal 6 to ship their goods,” Kotek wrote in a statement Wednesday. “Oregon communities will be better off because we came together and worked toward this shared goal.”
In addition to the lease, Harbor Industrial agreed to purchase seven cranes at the facility.
The deal had been announced in December and was contingent on the Legislature approving funds for capital improvements. In June the Oregon Legislature supported the effort by approving $20 million for capital improvements at the terminal, called for in Gov. Tina Kotek’s recommended budget.
Most U.S. container ports are managed through similar arrangements with private operating partners, according to the port’s statement. “This approach keeps the service intact, while keeping costs to the public manageable and predictable,” the statement reads.
Click here to subscribe to Oregon Business.
