Port of Portland to Cease Container Operations Due to Low Profitability
In a recent announcement, Port of Portland officials revealed their decision to halt container operations starting in October. This move comes as a result of the low profitability of the business, with port executives deeming the continuation of the State of Oregon’s only container terminal beyond September as a financial luxury.
The failed attempt to secure an operator for the terminal, coupled with a decline in cargo movement, has led to significant losses for the Port of Portland in recent years. With a deficit of over USD 30 million incurred in the last three years, projections indicate a further shortfall of 14 million by 2024.
A series of labor disputes over the past decade, along with the challenge of navigating 100 miles upriver to reach a relatively small market, have rendered Terminal 6 uncompetitive for container operations. Despite acknowledging the facility’s importance to the region, senior port officials reluctantly announced the decision to cease container handling.
“We know that this terminal is a critical asset at the state level. It is worth continuing the debate to arrive at a financially sustainable business model for container service that has significantly more state funding and investment,” stated Keith Leavitt, director of trade and economic development at the port, in an email to stakeholders.
The Port of Portland ceased serving container cargo in 2015, following the departure of key services that represented a significant portion of operations. This decision was partly influenced by worker delays in handling shipments, leading shipping companies to withdraw their services.
Following legal disputes between port workers represented by Ilwu and Ictsi Oregon, the Filipino-origin company operating the facility at the time, a Federal Judge ruled in favor of Ictsi Oregon, awarding them compensation. Despite initial setbacks, SM Line resumed weekly container service in 2020, providing a brief boost to the terminal amidst pandemic-related port congestion.
However, the termination of the connection between Terminal 6 and the ports of Seattle and Tacoma by railway company BNSF further hindered container movement, contributing to the ultimate decision to discontinue container operations at the Port of Portland.