Port of Portland to halt container operations at Terminal 6

The Port of Portland, Oregon, plans to cease operations at its cargo container handling facility in North Portland’s Terminal 6, citing the collapse of negotiations to lease the site to a third-party operator.

While the terminal will maintain automobile imports and exports, along with break bulk cargo handling, container shipping services are slated to cease by October 1st.

Terminal 6 is a multipurpose, 419-acre facility featuring five ship berths. The container facility comprises a 125-acre container yard, housing seven container cranes, including four post-Panamax models. Data from the port also shows that the facility features a fully grounded reach stacker operation with 620 refrigerated container connections.

It is Oregon’s only international shipping container terminal, and it serves as a vital link connecting the state’s consumers and industries, spanning agriculture, seafood, and retail, to global markets.

However, the container shipping facility has grappled with sustaining container operations since the departure of its previous terminal operator, International Container Terminal Services (ICTSI), in 2017 amidst labor disputes.

The long-running dispute between the International Longshore and Warehouse Union (ILWU) and ICTSI over the failed operation of a container handling facility at the terminal was resolved earlier this year with a pay-out of US$20.5M to the terminal operator following ILWU’s bankruptcy.

Despite a steady increase in volumes since 2019, the port has incurred significant losses exceeding US$30 million from container operations over the past three years, projecting a US$14 million shortfall for the current fiscal year. To address this, the port has been seeking state assistance to bridge towards a more sustainable long-term solution.

“The port does not have the funding necessary to sustain the operation, and we have made the difficult decision to cease operations as of October 1, 2024. We have notified the carriers, Harbor Industrial (our stevedore), as well as our staff, and we have also notified Governor Kotek and legislative leaders. Obviously, we did not expect this outcome, but it’s important we face it quickly given contract considerations with carriers,”  Keith Leavitt, the port’s chief trade and economic development officer, said in a letter to importers and exporters.

“Over many years, the Port has done everything possible to support this service and find creative funding solutions. Last week, a previously promising third-party operator ended negotiations suddenly, and leaving no other option than the extremely difficult decision to end container service at Terminal 6.” 

As explained by Leavitt, the port is now focused on partnering with shippers, workers, elected officials and the community to help support ways to get Oregon goods to markets. 

“Without container service, it’s likely imported and exported local cargo would travel via rail or truck on I-5 to/from Tacoma and Seattle, just like it did when former T6 operator ICTSI paused container operations. Two-thirds of exports already move to Puget Sound by rail and truck,” Leavitt added in a comment to WorldCargo News.

The port has been working with importers and exporters throughout Oregon, lawmakers, and other partners to secure a financially sustainable path forward through a long-term, third-party lease, while simultaneously negotiating increased rates with ocean carriers and requesting an $8 million investment from the Oregon Legislature to sustain container operations during lease negotiations.

According to Shelly Boshart Davis, a member of the Orgen House of Representatives, Harbor Industrial is interested in the lease from the Port of Portland to operate Terminal 6.

“I urge the port to get back to the negotiating table and work out a deal that will bring some certainty to Oregon businesses that rely on this international shipping terminal,” Davis said, calling port’s decision premature.

Despite the benefits container shipping brings to small businesses and the regional economy, Terminal 6 faces distinct challenges, including its remote location 100 miles from the ocean, a comparatively smaller consumer market, and limited depth in the Columbia River hindering access for the largest ships in the industry. While Terminal 6 experienced robust growth during the pandemic, recent setbacks such as the loss of rail service partner BNSF have compounded challenges, as disclosed by the port authority in March 2024.

The decision is anticipated to have significant financial ramifications, as expressed by shippers during recent public hearings, highlighting concerns about the impact of seeking alternative transportation arrangements on the competitiveness of Oregon companies.

Terminal 6 contributes $20 million annually in tax revenue to the state and supports 1,500 jobs in international cargo operations.