Port of Portland managers want to lease Terminal 6, Oregon's only container-shipping yard, to a company from the Philippines that manages numerous terminals abroad.
PORTLAND — Port of Portland managers want to lease Terminal 6, Oregon's only container-shipping yard, to a company from the Philippines that manages numerous terminals abroad.
International Container Terminal Services Inc., based in Manila, can do a better job running the Columbia River terminal that ships and receives cargo worldwide, the managers say. Port officials confirmed the lease proposal Monday after an inquiry from The Oregonian but said they would not make the terms public until later this week.
Port commissioners will consider the proposal during a public meeting at 9 a.m. May 12 in the Port's new headquarters at 7200 N.E. Airport Way.
The 25-year agreement would shift operating and marketing, but not security, to the independent firm, which would be required to invest in improvements. Port managers have struggled for years to attract and retain shipping lines, because of the terminal's location about 100 miles from the Pacific Ocean.
The sprawling terminal, upriver from the Columbia's confluence with the Willamette River, handled more than 87,000 40-foot containers last year. From 30 to 250 longshoremen work each day at T6, as it's known, depending on shipping activity.
"The ability to have your terminal in the hands of someone that's a global player really has a lot of merit," said Sam Ruda, Port director of marine and industrial development. "Our challenge and goal at the Port was really to find the right partner."
The Port commission's nine members, appointed by the governor, will decide whether to place the state's main marine hub in the hands of a foreign company that has never run a U.S. operation. Port managers will argue that a globally connected company can drum up more business, marketing the benefits of a newly deepened Columbia River shipping channel that allows passage of bigger ships.
The arrangement would fundamentally differ, officials said Monday, from the Dubai Ports World proposal in 2006 to sell management businesses in six U.S. seaports to a company based in the United Arab Emirates. That project attracted international attention and became controversial when opponents argued the sale would jeopardize U.S. national security.
The Portland deal, they said, would be a lease rather than a sale and would bring the Port in line with other West Coast ports that outsource terminal operations. The Port already leases terminals to private companies, including Japanese and Canadian firms.
Port managers began considering leasing T6 four years ago, they said. Terminals were then hot properties as the economy boomed and trading companies scrambled for West Coast shipping space.
But the Port suspended its search for operators as cargo volumes tanked during the recession. A little over a year ago, Ruda said, Port managers began confidential negotiations with International Container Terminal Services.
The Manila company runs half a dozen terminals in the Philippines, including one in Subic Bay, the famed location of a former U.S. Navy base. It also operates terminals in countries including Brazil, Poland, Indonesia, Syria, China and Ecuador.
Established in 1987, the company rapidly expanded from its start running the Manila International Container Terminal. The company, listed on the Philippine Stock Exchange, declared gross revenues from port operations of $422 million last year. It has said it plans to acquire new terminal concessions in the Americas, Asia, Australia, the Asian subcontinent, the Middle East, Africa and Europe.
"They handle U.S. military cargo today, and household goods of military personnel, by virtue of the fact that this company also has the terminal lease in Naha, Okinawa," Ruda said. He said Port managers visited terminals operated by the company in the Philippines and operations being developed in Argentina.
Under the proposed agreement, he said, the company would lease Terminal 6 container and break-bulk operations, but not auto facilities. The company would pay an annual lease fee plus some reimbursables to the Port for services including security.
"It makes the container business look a lot more like the other arrangements that we have at the Port," Ruda said. Other ports also lease out container yards, he said, such as the Port of Seattle's Terminal 18.
Ruda said he didn't expect significant job losses to result at the Port, a public agency that operates largely on business revenues. The new operator would apply to replace a separate entity that runs a $20 million longshore payroll.