by Lloyd's List
29 August 2024 (Lloyd's List) - ANY viable future for Portland’s container port will rely heavily on public funding, a new business plan published by the port argues.
Portland’s Terminal 6 has had a turbulent few years. Volumes at the terminal were below 1,000 teu between 2016-2019, hitting zero in 2017 as a result of a labour dispute.
A resurgence followed between 2020-2022, but the port revealed it had been running at a loss of $30m for the previous three years in April 2024.
The port announced earlier this year that it would be cease operations in October 2024, but intervention by the Governor of Oregon kept hopes of a recovery alive.
Were the terminal to close completely, the port’s business plan estimates Oregon businesses would incur costs of $19.2m in extra trucking charges to move goods via Seattle or Tacoma in Washington.
In addition, moving goods through the Puget Sound would result in an estimated extra 12,801 tonnes of carbon emissions per year.
To keep the container terminal open, the port said it needs $40m of state funding in by 2025. This will largely be spent on modernisation projects and maintaining the channel in the Columbia river.
The business plan made direct comparisons with the Californian ports of Los Angeles and Long Beach, as well as Seattle and Tacoma, which all benefit from significant public funding. At present, 96% of Portland’s revenue comes from private sources.
Crucially, the port’s plan rests largely on finding a third-party operator in 2025, which will have a target of doubling container volume to 120,000 by 2032.
This is possible, freight consultants Tioga Group said. A project carried out on behalf of the port found that every shipper contacted moves as much cargo through Portland as possible and would move more if vessel space allowed and more foreign ports were served.
Only two lines, SM Line and Mediterranean Shipping Co, call at the terminal now. The plan offers examples of several new routes that could call at Portland, linking the US west coast port to Southeast Asia, South America and China.
But Portland is 100 miles upriver, requiring more fuel, more time, plus pilotage services. The port said pricing would need to offset increased vessel costs, which are again higher because draught restrictions in the Columbia river prevent the biggest boxships from calling.
The importance to Oregon’s businesses is clear: “all cargo cannot flow through mega-ports on mega-ships — you also need niche ports”, the port said in its plans.
But it will need to convince container lines to return to Portland and its own state government to dip into public coffers if it is to survive for this decade and beyond.
