Port of Portland Seeks Subsidies to Keep Container Business Afloat

By Erik Siemers, January 9, 2013, Portland Business Journal

Fearing the loss of its container business, the Port of Portland on Wednesday will ask port commissioners to approve spending up to $1 million in payments to shipping companies to ensure they continue calling on Portland.

The program, they said, is aimed at offsetting expected cost increases from International Container Terminal Services Inc., the company that operates the port’s Terminal 6 container business, as a result of continued low levels of production from a still-simmering dispute with longshore workers.

Under the Container Carrier Incentive Program, the port would pay $10 per container to carriers calling Portland, capped at $1 million in total. The program would expire at the end of the year.

The program will be followed by another request next month to rebate portions of ICTSI’s lease payments in an effort to help control rising costs.

Both initiatives would follow a pair of similar incentive programs approved last summer while the port and ICTSI squared off with the International Longshore and Warehouse Union over whether its workers or those of the electrical union had the rights to two jobs plugging, unplugging and maintaining refrigerated container units.

The dispute effectively stalled the port’s container business for most of a month in mid-summer, leading to long lines of tractor-trailers outside the terminal gates and briefly prompting the port’s two biggest shipping carriers — Hanjin and Hapag-Lloyd — to cease calling on Portland. The slowdown also helped stall the state’s economic growth, according to University of Oregon economists.

Between June and August, the port paid $175,000 to carriers as an incentive to continue calling on Portland. It also adopted a cost-sharing program with ICTSI to help the company cover revenue lost from the labor dispute. The port was authorized to spend up to $4.7 million, though it ended up rebating just $2.7 million to ICTSI from its rent.

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