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See Correction/Clarification at the end of this article.
The Port of Portland’s decision to shut down container services at Terminal 6 came as a shock to many. Just a week prior to the closure announcement April 15, the Port told stakeholders it would maintain container services at the terminal through June of 2025.
Mickey Hawke, the president of the Port’s stevedore company Harbor Industrial, was “disappointed” when he heard the news. Harbor Industrial, a California-based maritime transportation company, has been stevedore at Terminal 6 since 2019.
In a letter sent April 17 by Hawke to the Port’s economic development director, Keith Leavitt, and obtained by the Business Journal, Hawke says Harbor Industrial and the Port were in negotiations dating back to last fall to allow Harbor Industrial to “continue operating the terminal through a lease agreement with the Port of Portland.”
Hawke’s letter indicated that Harbor Industrial’s operator negotiations with the Port were only paused, never terminated. The pause was to allow for the Port to “meet overseas with the Port's two largest container carriers to improve their rates,'' according to Hawke’s letter.
The Port, in responding to a set of Business Journal questions, referred to several letters between Port officials and stakeholders in which the Port said "a large, experienced prospective partner determined the financial risk was simply too great to continue the conversation."
It is unclear who that partner was, but did say that negotiations with Harbor Industrial "have yet to result in actionable lease proposals that are financially responsible for the Port."
Harbor Industrial and Hawke did not respond to several requests for comment via phone and email.
In his letter to Leavitt, Hawke wrote that he expected negotiations to resume in 60 days, or in early January of this year, and added: “Never has the Port indicated to Harbor Industrial that our negotiations or discussions had concluded.”
Terminal 6, plays an "essential role” in the Oregon economy, said Rep. Shelly Boshart Davis, who also owns the trucking company Bossco Trading LLC. It supports 1,500 jobs in Portland metro and generates $20 million in direct and indirect tax revenue for the state every year.
What's more, large businesses such as Nike and Columbia Sportswear use the terminal, as do farmers who distribute the region's most profitable crops and plants.
A history of financial and operational struggles
The Port has faced funding shortfalls and cuts that have resulted in what is projected to be a $14 million shortfall from container service this year. On top of the financial struggle, BNSF Railway terminated its agreement with the Port in 2022. Lawmakers also denied a $10 million request to the Oregon Legislature last session to cover losses, though a renewed request for $8 million has been placed, according to the Port.
In an April 8 letter, the Port told stakeholders that despite the projected loss and financial struggles, Terminal 6 would stay open through next June.
"We made this decision despite some risk because we believe it’s the right thing to do for businesses across Oregon, who need continuity and certainty, and it’s the right thing to do for the state’s economy," Leavitt wrote.
A week later, Leavitt and the Port flipped, telling stakeholders container service at Terminal 6 would close in October, saying “... we have run out of financial options and must take this step.”
This closure does not mark the first time that Terminal 6 has ceased some operations. In both 2012 and 2015, ocean carrier Hanjin Shipping either paused or ended direct service Terminal 6, leaving the region without its biggest direct link to Asian markets and creating a void in one of the port's most valuable businesses.
These carrier exits both came as a result of labor disputes between the terminal’s former operator, ICTSI, and the Local 8 of the International Longshore and Warehouse Union. In 2019, after several years in court, ICTSI was awarded $93.6 million for damages related to slowdowns and work stoppages caused by the local union between 2012 and 2016.
In January 2020, weekly services continued with South Korea-based carrier SM Line for the first time since the 2015 closure.
“To me, that means that there's an option”
Bossco Trading LLC has delivered into and exported products out of Terminal 6 since the 2000s. Boshart Davis, a Republican whose district includes Albany, sent an April 19 letter to the Port’s executive director, Curtis Robinhold upon learning of the decision.
In the letter obtained by the Business Journal, Boshart Davis urged Robinhold to “reengage in negotiations with Harbor Industrial and come to an agreement to bring some certainty to Oregon businesses that rely on the imports and exports from this terminal.”
Robinhold responded to Boshart’s letter April 25, explaining the funding shortfalls, that the prospective partner had dropped out of conversations and that negotiations with Harbor Industrial had yet to be successful "despite exclusive negotiations throughout last year."
Boshart Davis said Robinhold’s letter only reaffirmed what she already thought: that not every single option had been exhausted, because of Robinhold's use of the words “yet to."
“To me, that means that there's an option, to me that means that there's some negotiation opportunity remaining,” Boshart Davis told the Business Journal.
Boshart Davis also pointed Robinhold to the terminal's economic impact. The ecosystem includes such business operators as Keith Lee, who owns Chin’s Import & Export. Lee's business sits less than three miles from Terminal 6 in the North Portland industrial area.
Because of the closure of Terminal 6’s container services, Lee said he’ll have to go to Seattle or Tacoma’s port to obtain his plastic imports. The additional costs Lee said he will incur because of this reroute will have to be passed onto the consumers.
“As a local that's been born and raised here in Portland – a family business that’s been in Oregon for 75 years – I believe in supporting my own community,” said Lee. “But now I ask myself, why?”
According to the Port, it’s likely that all local cargo will have to travel via rail or truck on I-5 to and from Tacoma and Seattle after Oct. 1. The Port also said that two-thirds of exports already move to Puget Sound by rail and truck.
In its letter to stakeholders announcing the closure, the Port acknowledged Terminal 6 as a “critical statewide asset.”
“It is worthy of further discussions to come up with a financially sustainable business model for container service that has significantly more state funding and investment,” the Port wrote.
Correction/Clarification
The original headline referred to Harbor Industrial as the "operator" of Terminal 6, when it is the "operator of container services" at Terminal 6. The original story also mischaracterized the duties of a "stevedore." The story has been updated.