INTERNATIONAL Container Terminal Services, Inc. (ICTSI) last week signed a 25-year lease agreement with the Port of Portland, paving the way for the terminal operator’s entry into the US market.
Under the terms of the agreement, ICTSI will operate the port’s Terminal 6 container and breakbulk facility, paying the port $8 million at closing in addition to the annual rent payment of $4.5 million. Rents are subject to annual increases based on the consumer price index. As terminal volumes increase over time, ICTSI will also pay the port additional incremental revenue per container moved.
The agreement is expected to boost annual capacity at the facility to 400,000 TEUs.
The Port of Portland will provide security at Terminal 6, with the local chapters of the International Longshore and Warehouse Union and the District Council of Trade Unions continuing to work at the terminal.
The deal covers provisions such as detailing infrastructure upgrade needs and who pays, and agreement from ICTSI not to operate another terminal on the US West Coast. ICTSI also agreed to join the Pacific Maritime Association employers’ group which will relieve the port authority of time-consuming contract negotiations with dock workers.
“Improving access and capacity for exporters and importers and increasing volumes are the priorities of the Port and ICTSI. We have the capital and the international connections to make that happen,” Marcelo Suarez, ICTSI Senior vice president, said.
“We have been aware for several years that the Port of Portland and ICTSI had complementary business goals. And, as we have gotten to know the City of Roses, we’ve been looking forward to the possibility of becoming part of this community,” Suarez, who will carry the overall responsibility for the company’s operations in the Americas, said.
Elvis Ganda will be ICTSl’s Oregon-based chief executive. Ganda comes to Portland with significant experience in terminal operations, ocean carrier management and port authority administration. Most recently, Ganda was president of California United Terminals in Long Beach, California.
The Port of Portland has long aimed to connect the region to the national and global marketplace. Many key existing customers such as shipping lines, railroads and airlines are located outside the region or outside of the US and are private sector companies. Every ton of container cargo that comes through the marine terminals generates a local economic impact of $70.
