A container ship is loaded at the Port of Portland’s Terminal 6.

The Port of Portland’s container terminal is no mystery to its new operator, which expects its firsthand knowledge of the business and workforce to help reverse the facility’s financial losses.

Harbor Industrial, a maritime services company based in Los Angeles, has been involved in running the port’s Terminal 6 for nearly seven years, so it’s already familiar with its day-to-day functioning, said Tim McCarthy, the company’s chief operating officer.

“Direct experience at the facility has allowed us to build a model that works really well for our business,” he said. “For us, it’s a really simple transition. We’re already doing the work there.”

Though the terminal’s money troubles have persisted in that time, McCarthy said he’s confident Harbor Industrial can bring the container business to solvency once it begins leasing the facility next year.

Role change

Until now, the company’s been hired by the port for stevedoring, or moving goods from vessels to the dock, which involves managing longshore labor at Terminal 6. As the operator, however, it would assume control over the facility in return for making lease payments to the port.

“Ultimately, we take on the risk and reward of the terminal,” McCarthy said.

As a private company, Harbor Industrial will have lower overhead costs and benefit from the synergy of providing engineering, maintenance and cargo-handling services at numerous other facilities, he said.

“We’re working within about every port on the West Coast,” McCarthy said.

Harbor Industrial can modernize equipment, negotiate with ocean carriers and otherwise adapt terminal operations more rapidly than the port, which has a more drawn-out decision-making process, said Leal Sundet, secretary and treasurer of the International Longshore and Warehouse Union’s Local 8, which works at the facility.

“They’re in a better position than the port was. The port is very bureaucratic, Harbor is very nimble,” Sundet said. “They can react faster than a large bureaucracy.”

McCarthy said the company has already helped revive the container business at Terminal 6 by “traveling around the world bringing back the shipping lines,” as well as its ability to “fix the labor problem.”

Kotek steps in

Major ocean carriers had stopped calling on the terminal between 2015 and 2020, owing to container-handling slowdowns stemming from conflicts between the previous operator and the longshoremen’s union.

Earlier this year, the port announced it would once again shut down the container business, citing its anticipated losses of $13.7 million for the year and its inability to secure a terminal operator.

The news alarmed agricultural exporters, who rely on the terminal to ship hay, straw, seeds and other farm goods to Asian ports, and prompted Gov. Tina Kotek to seek additional funding for the facility.

Based on her commitment, Harbor Industrial has now agreed to become the terminal’s operator so long as lawmakers agree to spend $20 million on capital improvements.

Fears about the future prospects of Terminal 6’s container business made ocean carriers reluctant to rely on the facility. “They lost trust that it was going to stay open,” McCarthy said.

Returning stability to the terminal will go a long way toward making it profitable, as more cargo destined for the Portland metropolitan area will arrive directly by sea rather than being trucked or railed in from other ports, he said.

Currently, the facility handles less than 30% of the region’s incoming cargo, but that proportion will likely rise steeply once ocean carriers are convinced of the facility’s durability, McCarthy said.

“We see the opportunity to recapture a big part of that other 70%,” he said. “The natural flow of that cargo will come back very quickly.”

McCarthy said his optimism is based on Terminal 6’s longstanding reputation for agricultural exports, which allow ocean carriers to be paid for the return journey to Asia rather than hauling back empty containers.

“They like export terminals,” he said.

The deal between the port and the Harbor Industrial is contingent on the $20 million for capital improvements, and would be further bolstered by $15 million included in Kotek’s proposed budget for dredging of the Columbia River, which is necessary to maintain its navigability.

Kotek, a Democrat, had also planned to seek $5 million for the container business’s short-term operations from the Joint Legislative Emergency Board this year, but that proposal was delayed by lawmakers and ultimately scrapped.

Instead, the port said it’s counting on the governor to make that money available from her strategic reserve fund and the legislative budget rebalancing process in 2025.