International Container Terminal Services, Inc. (ICTSI), through wholly owned subsidiary ICTSI Oregon, Inc., has formally terminated its 25-year lease agreement to operate the Port of Portland’s Terminal 6.
In a disclosure to the Philippine bourse, the port operator said ICTSI Oregon and Port of Portland on March 8 signed a lease termination agreement with a termination date of March 31, 2017.
ICTSI Oregon will pay Port of Portland a termination fee of US$11.45 million by the termination date, relieving the port operator of its long-term lease obligations.
The agreement comes nearly a year after the terminal was idled by a labor dispute.
With the departure of ICTSI Oregon, the port will again be left in charge of Terminal 6, Oregon’s only container terminal accessible by large ocean-crossing cargo vessels.
ICTSI Oregon chief executive officer Elvis Ganda earlier said they hope the agreement “will make it possible for business to return to the terminal more quickly.”
ICTSI Oregon will also 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 U.S.-based labor group International Longshore and Warehouse Union (ILWU).
The development appears to be a partial victory for ILWU Local 8, which had long resisted ICTSI’s management of the terminal. Legal disputes between the two continue, however.
“This is the best opportunity to launch a new strategy to restore carrier service for Oregon and Northwest shippers,” Port of Portland executive director Bill Wyatt said.
“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,” he added.
The port signed a lease with ICTSI Oregon in 2010 to ensure a long-term funding mechanism for Oregon’s only deep-draft international container terminal.
It said it will engage with a broad range of stakeholders, including ocean carriers, shippers, railroad operators, truckers, barge operators, terminal operators and labor unions to create a new plan to bring business back to the terminal.
The Port of Portland lease is ICTSI’s first venture in the U.S. and is the largest financial transaction in the history of the city’s maritime port, according to the ICTSI website.