Wednesday, March 1, 2017

More Deep Water Port Misery as Container Terminal Operator Drops Out of Freight Handling Agreement

ICTSI and Portland Part Company Eighteen Years Early After Labour Fiasco
Shipping News Feature
US – Strange how things work out sometimes in the world of freight and logistics. Just moments after publishing our last story regarding dock workers in Madagascar, linked to a 3 year old tale of a dispute at the International Container Terminal Services (ICTSI) run Port of Portland, the Philippine headquartered group announced it will terminate a 25–year lease agreement to operate the container facility at the Port's Terminal 6 in agreement with the port's owners. A tough few years has seen the terminal operator's Portland based division, ICTSI Oregon lose major several major container shipping contracts as a result of the crippling labour dispute. From March 31, ICTSI Oregon will be relieved of its long-term lease obligations at the Oregon port, and in exchange, the Port will receive $11.45 million in compensation to rebuild business, as well as additional container handling equipment, spare parts and tools at the terminal. ICTSI Oregon CEO Elvis Ganda, said:

“Small businesses, farmers, agricultural producers, shippers and communities throughout the Columbia River region deserve and need a fully-functioning container terminal. Hopefully, this agreement with the Port will make it possible for business to return to the terminal more quickly. However, ICTSI Oregon will continue to address the labour issues that gave rise to its decision to enter into this agreement and will pursue its legal claims against the ILWU.”

The Port signed a lease with ICTSI Oregon in 2010 to ensure a long-term funding mechanism for Oregon’s only deep draft international container terminal. The Port says it will engage with a broad range of stakeholders including ocean carriers, shippers, railroads, truckers, barge operators, terminal operators and labour to create a new plan to bring business back to the terminal. Bill Wyatt, Port of Portland's Executive Director, commented:

“This is the best opportunity to launch a new strategy to restore carrier service for Oregon and Northwest shippers. While the global carrier industry continues to undergo rapid change, we now have a new path to redefine our future in this business and launch new strategies to bring the terminal back to life.”

ICTSI has had a troubled time at the Port of Portland with the International Longshore and Warehouse Union (ILWU) deciding to take action as far back as 2012 by engaging in work stoppages and slowdowns. As a result of the dispute, Hamburg Süd, Hanjin Shipping, and Hapag Lloyd decided to withdraw all sailings to the ICTSI Oregon's facilities in Portland within a four month span between December 2014 and April 2015. Westwood Shipping Lines remained the only container carrier making regular call at Terminal 6, but that company withdrew in May 2016.

Portland is Oregon’s only deep water facility and the 25 year agreement with ICTSI only dates back to 2010 with labour problems arising almost immediately with the original dispute over who should manage the handling protocols of reefer boxes developing into the ongoing go slow which blighted relations with the carriers. The ILWU published a short report on the announcement and seemed somewhat light hearted describing it as ‘splitsville’. Speaking about the situation Oregon Governor Kate Brown said in a more serious tone:

"Container service is key to our trade-dependent economy, and I am confident the Port of Portland will take advantage of this opportunity to re-establish a crucial lifeline to rural Oregon and businesses across the state. Container service at Terminal 6 was one of the first issues I took on after becoming Governor. I still believe Oregon businesses, the shipping community, those who work on the waterfront and the Port of Portland will come together to develop a solution that supports Oregon's economy and creates jobs."

Perhaps whoever takes over this important channel point to the north western United States will ensure that any future labour agreements delineate every facet of what is needed to run a busy container terminal, flexible enough to cope with the changing face of intermodal logistics. Given the history of west coast ports, and our, now proven, predictions that disputes like that at Portland would lead to business failures, this may still be a vain hope.

Photo: Terminal 6 in happier days.