Thursday, January 10, 2013

Portland Commission Approves Per Container Subsidy

The Port of Portland Commission has approved a temporary incentive plan to boost business at its struggling Terminal 6 facility.

Under the plan, which was approved on a 7-2 vote Jan. 9, a $10 per container subsidy will be given to carriers calling at the facility, with the amount to be doled out capped at $1 million. The money will come from rental payments made to the port by terminal operator ICTSI.

“This program is justified as a means of helping sustain the mission critical nature of the container franchise to shippers in the State of Oregon and throughout the region,” according to the port’s general manager of marine business development, Sebastian Degens.

Terminal 6 experienced substantial decreases in both vessel and gate productivity beginning in early June 2012, something the port blames on a labor dispute over jurisdiction over the hooking and unhooking of refrigerated containers. Although the National Labor Relations Board eventually ruled that the International Brotherhood of Electrical Workers employees should perform the disputed work, not International Longshore and Warehouse Union employees, the port says that decreased and inconsistent terminal labor productivity has continued and added considerable additional expense for ICTSI and ultimately for the carriers calling at Terminal 6.

While parties do believe that the labor issues and accompanying terminal productivity levels will eventually improve, that does not appear likely in the short term, according to Degens.

The port now says the per-container incentive is needed to help facilitate implementation of long-term terminal use agreements. Under the action approved by the commission, the incentive expires at the end of 2013.