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Port of Portland Intermodal Service
Grows, But Still Loses Money

by Mateusz Perkowski
Capital Press, April 23, 2019

While Terminal 6 revenues are covering its operating expenses -- primarily labor -- the facility is
still losing money due to overhead costs such as insurance, utilities and stormwater management.

Truck-to-rail operations at the Port of Portland have picked up, but the facility continues to lose money has it faces potential competition from another facility planned in the Willamette Valley.  (Port of Portland photo) Productivity problems have receded into memory at the Port of Portland's container terminal as it's ramped up truck-to-rail operations for Oregon farm exports.

Terminal 6 is now in its second year of operating as an intermodal facility where containers are loaded from trucks onto trains bound for the ports of Tacoma and Seattle.

Traditionally, the facility was a key transit point for moving containers directly onto ships, but labor tensions were blamed for work slowdowns that drove away ocean carriers from using the facility several years ago.

Since then, conflicts between the longshoremen's union and the port were resolved after the departure of a controversial third-party terminal operator, resulting in the launch of intermodal services in early 2018.

"It's been an excellent reset of relations and it's been manifesting itself in the productivity of the operation," said Ken O'Hollaren, the port's marine marketing director. "We've demonstrated we can operate productively."

Last year, about 37,000 containers moved through the intermodal facility at Terminal 6, which also saw the return of limited ocean shipping service with regular calls from vessels owned by the Swire company.

The facility also handled "one-off" deliveries of wind turbine components and specialized containers that were a "great opportunity" to demonstrate its capabilities, said O'Hollaren.

The hope is that efficient operations and a well-functioning workforce at Terminal 6 will convince additional ocean carriers to offer direct shipping of containers to Asian markets.

Aside from labor strife, the port's upriver location restricts the size and number of vessels that can serve the facility.

However, port leaders remains optimistic due to the facility's improved operations and the stabilization of the financially turbulent maritime shipping industry.

"We're using that experience in our marketing efforts. We have something positive to point to," O'Hollaren said. "We do see an opportunity for what we call a niche carrier."

While Terminal 6 revenues are covering its operating expenses -- primarily labor -- the facility is still losing money due to overhead costs such as insurance, utilities and stormwater management, he said.

The terminal has lost more than $2 million this year even as the business has expanded and rail activity exceeded forecasts, according to the most recent monthly report from Curtis Robinhold, the port's executive director.

The port received a $12 million payment from the former terminal operator, ICTSI, upon the severance of a lease in 2017, which has served as working capital for the facility.

Although the money is intended to provide a cushion until Terminal 6 can achieve profitability, the facility won't stop operating if it runs out, O'Hollaren said. "It's more of a goal than a hard-and-fast deadline."

Terminal 6 already has a rival intermodal facility in Portland -- Northwest Container Services, which previously said the port's venture has cut into its business -- and may face another competitor further south in the Willamette Valley.

The Oregon Transportation Commission is deliberating whether to award a $25 million state grant to a site in Brooks or in Millersburg, both of which aim to provide intermodal services away from Portland traffic.

The commission recognizes it's possible another intermodal facility may hamper the viability of existing ones, said Martin Callery, a commission member and former Port of Coos Bay official. "We still have to look at how that competitive environment is going to be impacted."

Lawmakers directed the Oregon Transportation Commission to make a decision on the $25 million grant for a mid-Willamette intermodal facility, but that doesn't mean anyone will necessarily obtain the funds, said Tammy Baney, the commission's chair and Deschutes County commissioner.

It's possible the commission will decide against funding either site after conducting due diligence, Baney said. "We're not talking about building a field of dreams."

Related Pages:
Here's Why Portland Won't Get New Shipping Container Service Anytime Soon by James Cronin, Portland Business Journal, 5/9/16

Mateusz Perkowski
Port of Portland Intermodal Service Grows, But Still Loses Money
Capital Press, April 23, 2019

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