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Portland ’ s T6 ( pictured ) is forecasting a $ 13.7 million loss in 2024 following a $ 13.2 million loss in 2023 . Port of Portland
“ The port has always struggled with financial issues in the container business ,” Leavitt said . “ When we forecast the general fund , the math isn ’ t working . Fixing the container business isn ’ t going to make the math work .”
A hard landing
Portland ’ s container business experienced a hard landing after pandemic-driven volume growth petered out , resulting in increasing losses . The COVID-19 pandemic — and the resulting need for alternative US ports to ease the pressure on congested primary gateways — seemed to have given Portland a second wind after several years of cargo declines linked to labor unrest .
Between 2000 and 2005 , the port handled more than 300,000 TEUs annually , but following ILWU work slowdowns that began in 2012 , shippers began taking their business elsewhere , with annual throughput bottoming out at 299 TEUs in 2017 , according to PIERS , a sister product of the Journal of Commerce within S & P Global .
The 117,852 TEUs of containerized cargo that crossed Portland ’ s docks in 2022 was 46.5 % more than in 2021 and the most since 2014 . But in 2023 , volumes tumbled 23.5 % as congestion eased and supply chains normalized , and the decline continued into 2024 , with throughput slipping another 7.3 % year over year through February .
And despite the 100-plus-vessel queues seen during the worst of the pandemic congestion , carriers continue to concentrate services in Los Angeles and Long Beach ; the ports handled 74.5 % of containerized cargo flowing through the US West Coast in 2023 , up from 71.6 % in 2013 . During the meeting , Leavitt said T6 had already cut its gate operations to four days a week , which “ shippers
were not happy about ,” and that capital projects have been delayed to stem the financial losses . To survive , T6 will need a third-party terminal operator that has the “ carrier network to drive more volume into Portland ,” he said .
Due to the forecast losses for 2024 , Portland Executive Director Curtis Robinhold sent a letter in January to the Oregon state legislature seeking a $ 10 million grant to “ maintain container shipping services ” at T6 during the coming fiscal year . While that request had the support of the state ’ s top lawmakers , the aid package failed to pass in Oregon ’ s last legislative session .
Leavitt , however , said the port cut the request to $ 8 million because the port has successfully negotiated with its two container lines , Mediterranean Shipping Co . ( MSC ) and SM Lines , on new lift rates at T6 that are “ materially higher ” than what they originally agreed to , allowing the port to seek a smaller aid package .
But Leavitt said the port will need the aid to be approved ahead of the June expiration of the current agreement with MSC and SM Lines because shippers and carriers are negotiating contracts that will determine where trans-Pacific cargo will enter and exit the US for the remainder of 2024 .
“ We are making a full court press between now and the end of May with the Oregon legislature ,” Leavitt said , adding that the rate concessions from MSC and SM Lines are a favorable sign for the health of state ’ s container business .
The rate concessions “ reflect the carriers stretching out and keeping the business alive ,” Leavitt said . “ We wouldn ’ t be here if we didn ’ t have some optimism about coming out the other end of this year .”
email : michael . angell @ spglobal . com
22 Journal of Commerce | May 6 , 2024 www . joc . com