Port of Portland to Suspend Container Operations

Financial Challenges Force Oregon Seaport’s Decision, Impacting Regional Economy

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Oregon’s singular oceanic seaport, the Port of Portland, announced yesterday its intent to halt container operations effective October 1. Amidst the surge in volumes witnessed by many regional ports during the pandemic, Portland grappled with escalating financial losses as normalcy returned to industry volumes.

Port Executive Keith Leavitt conveyed to shippers that the decision stemmed from the breakdown of negotiations with a potential third-party operator, culminating in an unforeseen predicament. With mounting financial deficits exacerbated by the absence of a viable operator and lacking state financial backing, the suspension of container operations became an imperative. Notwithstanding, the port remains committed to managing RoRo car and vehicle operations alongside break bulk and heavy cargo handling.

Attributing its predicament to fixed costs, the port lamented the impediments to expanding container services and the resultant burden on shippers. Endeavoring to enlist a larger operator capable of defraying costs across broader operations, the port witnessed a cumulative loss exceeding $30 million from container operations over the past three years, with a projected $14 million deficit anticipated for the current fiscal year.

Terminal 6, equipped with five berths and seven container cranes, confronts distinctive challenges, including its inland location over 100 miles from the ocean and constrained depth along the Columbia River, unsuitable for accommodating larger vessels. Furthermore, its relatively modest consumer market compounded by the termination of rail service by partner BNSF, linking to Seattle and Tacoma, further hampered operations.

The suspension of container operations, particularly detrimental to the agricultural and seafood sectors reliant on the port, mandates alternative transportation routes, inevitably inflating costs. Moreover, the cessation impacts approximately 1,500 regional jobs previously supported by container operations.

Despite harboring optimism until recent weeks, port executives’ appeal for $8 million state aid, following negotiations with carriers, fell short of securing long-term viability. Recalling the labor dispute with ICTSI in 2010, which ultimately led to the withdrawal of carriers by 2015 and ICTSI’s departure in 2017, the port assumed self-management of container operations. Although container service resumed in 2020, lawmakers’ omission of financial provisions in the state budget underscores the present uncertainty, compelling port officials to seek sustainable alternatives in the absence of requisite funding.

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