Monday, December 15, 2014
Port of Portland continues carrier subsidies
The Port of Portland will extend its subsidies to container shipping lines so they don't stop calling at its container terminal facility, which is used extensively by agricultural exporters.
On Dec. 10, the Port of Portland commission voted to pay up to $4 million in subsidies to Hanjin and other carriers, which are at risk of avoiding the facility due to slow container productivity numbers.
Oregon’s agricultural exporters hope to keep the container terminal open, since they would otherwise have to ship farm goods more expensively through the more distant ports of Seattle and Tacoma.
The subsidies were approved over the objections of the ILWU, which is engaged in a dispute with the contractor that operates the terminal, ICTSI Oregon. The terminal operator accuses the union of staging slowdowns that threaten its relationship with carriers.
According to International Longshore and Warehouse Union, the subsidies are mitigated by the higher rates that ICTSI charges the carriers.
Movements of containers on and off ships have dropped from about 26 per hour in 2010, when ICTSI signed its contract with the port, to about 13 per hour now, said Greg Borossay, senior manager of trade and cargo development for the port.
The reduced productivity convinced the port to begin paying per-container subsidies to ocean carriers, which see slowdowns as unacceptable due to tight loading schedules in Asian ports, he said.
At Borossay’s urging, the commission agreed to extend the subsidies through 2015 at a rate of $25 per-TEU, with the possibility of an incentive payment of up to $25 per-TEU if they increase volumes.
Mike Stanton of ILWU said the subsidies are a waste of resources because ICTSI recently began charging carriers $120 more per container.
"We don’t have a competitive market here," Stanton said. "ICTSI has a monopoly on this market."
For more of the Capital Press story: www.capitalpress.com
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