Port operator International Container Terminal Services, Inc. (ICTSI), through its wholly-owned subsidiary, ICTSI Oregon, Inc., and the Port of Portland have agreed to terminate in March a 25-year lease agreement to operate the container facility at the Port’s Terminal 6.
This development comes nearly a year after the terminal was idled by a labor dispute.
In a regulatory disclosure, ICTSI said the agreement allows ICTSI Oregon to be relieved of its long-term lease obligations effective March 31, 2017, pending approval by the Port Commission.
With the departure of ICTSI Oregon, the Port would be left once again in charge of Terminal 6, Oregon’s only container terminal accessible by large ocean-crossing cargo vessels.
Under the agreement, ICTSI will pay the Port $11.45 million and return the $10 million in equipment it purchased when it took over management of the terminal, Port of Portland executive director Bill Wyatt said on Monday.
“We were not very excited about the prospect of sitting around for the next five to 10 years with an empty terminal just collecting rent,” Wyatt said. “It became clearer and clearer this was not going to get resolved anytime soon.”
“Small businesses, farmers, agricultural producers, shippers and communities throughout the Columbia River region deserve and need a fully-functioning container terminal,” ICTSI Oregon chief executive officer Elvis Ganda said in a statement.
“Hopefully, this agreement with the Port will make it possible for business to return to the terminal more quickly. However, ICTSI Oregon will 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 ILWU (International Longshore and Warehouse Union).”
The development appears to be a partial victory for the 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’s 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.
Wyatt continued, “I also want to thank Governor Kate Brown for her long-term engagement on shipper solutions. The trade and logistics initiative will be invaluable as we assess future options at Terminal 6, a process in which the Governor will be an integral player.”
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.
The Port said it will engage with a broad range of stakeholders, including ocean carriers, shippers, railroads, truckers, barge operators, terminal operators and labor, to create a new plan to bring business back to the terminal.
The Port of Portland lease is ICTSI’s first venture in the US and said to be the largest financial transaction in the history of the city’s maritime port, according to the ICTSI website.
