The Port of Portland has requested $10 million in one-time state funding to help cover financial losses at Oregon’s only international shipping container terminal that imports and exports products worldwide.
The Port of Portland on Tuesday submitted the request to lawmakers in advance of the five-week legislative session, which starts Feb. 5. The facility, Terminal 6, has endured years of losses and faces a projected $14 million loss this year, according to the port’s letter to lawmakers on the budget committee.
The terminal connects the world with Oregon’s consumers and industries, including agriculture, seafood and retail. And its work extends beyond shipping containers. The terminal also handles imported and exported cars and other large, heavy materials.
“Given the strategic nature of this service for the state and the clear public benefit, the port has endured financial losses so the terminal would remain available for Oregon importers and exporters,” the port’s Executive Director Curtis Robinhold wrote in the letter. “This practice has never been financially sustainable. Facing a projected loss of $14 million this year, we are requesting necessary gap funding as we negotiate rate increases with carriers and seek a third-party terminal operator for a long-term lease.”
Container operations at Terminal 6 support 1,500 direct and indirect jobs, including workers with the International Longshore and Warehouse Union, terminal operators, trucking firms, railroads, steamship agents, freight forwarders, and marine construction companies, the letter said. The terminal generates more than $20 million annually in state and local tax revenue from wages and businesses.
The Capital Chronicle obtained a copy of the letter, in which the port warned that “without other funding to offset ongoing losses associated with container operations, we will be forced to begin conversations about ending container service at T6.”
However, the letter also said the terminal would continue to handle other cargo even if container shipping stopped: “It’s important to know that no matter what happens with containers in the future, T6 will remain a working marine terminal.”
Wide responsibility
The Port of Portland oversees three airports, four marine terminals and five business parks.
Port officials said they want to keep the terminal operating.
In a statement to the Capital Chronicle, Keith Leavitt, chief trade and economic development officer for the port said: “We know container operations at T6 are important for Oregon businesses and our region’s economy – which is why we’ve been doing everything possible to maintain this service. We are committed to continuing to work with our shipping community, other industry stakeholders and legislative leaders as we determine what’s next.”
The request comes amid other crises in Oregon that need funding, including affordable housing and drug addiction. At this point, lawmakers are not promising to fund the port project.
“It’s certainly important for Oregon’s economy to maintain robust container shipping capacity,” said Sen. Elizabeth Steiner, D-Portland and co-chair of the Joint Committee on Ways and Means, which handles budget requests. “This request will be taken into consideration in the context of other requests being made for the short session, including for housing affordability and addressing the drug crisis.“
Besides financial woes, Terminal 6 faces other challenges. Among them: the limited 43-foot depth of water in the Columbia River navigation channel; the relatively small consumer base compared to West Coast cities like Seattle or Los Angeles and the 105-mile transit for ships from the ocean to Portland.
The request comes after years of challenges for the terminal. In 2011, the port started a 25-year lease with International Container Terminal Services, Inc. after losing more than $100 million during the prior decade. Then in 2012, a labor dispute between two unions over who was responsible for work related to refrigerated containers caused work stoppages and legal challenges.
After a study, the port and operator terminated the 25-year agreement in 2017 and the agency started to study how to find a sustainable business model for container shipping. In 2018, officials recognized that a container-only operation is not financially workable.
Other efforts have started and stalled over the years. In 2018, BNSF Railway started a regular service of delivering ocean containers to and from Seattle and Tacoma ports. In June 2022, the railway terminated its intermodal operations there, citing a lack of rail cars and high operating costs. That led to decreased revenues for the terminal.
In April 2023, the port reduced the days the terminal gate is open from five days a week to four to cut back on costs.
The port is planning community forums in the coming months with the shipping community.
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