The Portland Port Commission approved a $3.7 million partial rent rebate program to reimburse terminal operator ICTSI Oregon for continuing losses due to productivity declines from a labor disruption last year.
ICTSI manages Portland’s container facility, Terminal 6. Since last summer, the International Longshore and Warehouse Union has been battling for jurisdiction over what amounts to two jobs that had been worked for years by members of the International Brotherhood of Electrical Workers.
Portland used to operate Terminal 6 as an operating port. The port is not a member of the Pacific Maritime Association, the employers’ group that negotiates waterfront contracts with the ILWU. When ICTSI took over management of Terminal 6 and became a PMA member, the ILWU charged that the two jobs plugging, unplugging and monitoring refrigerated containers should fall under the jurisdiction of the dockworkers union.
The issue has been involved in litigation since last summer. Meanwhile, crane production at the entire terminal has declined and has stayed below historical levels, port spokesman Josh Thomas said.
The port tracked net crane productivity before a National Labor Relations Board hearing into the matter was held in May 2012, and productivity was 25 to 29 container moves per hour. Productivity dropped immediately after the hearing to about 22 moves per hour and has stayed at 22 to 23 moves per hour since then, according to metrics released by the port.
ICTSI has paid a price for the decline in productivity. “Sustained productivity declines resulting from labor disputes at Terminal 6 have caused operating costs to increase,” the port stated in a release.
The purpose of the rent rebate program is to offset a portion of ICTSI’s incremental operating costs attributable to lower productivity. Also, the program will “help preserve and grow Portland’s role as an international container shipping gateway,” the port stated.
Portland is working to retain the services of container lines that call at the port. The maximum rent rebate payment requires that existing container services are retained, and that the carriers call at the same frequency as during 2012.
The port emphasized that no tax dollars are involved in the program. The rent rebates, retroactive to Jan. 1, 2013, will come directly from the $4.7 million in annual rent payments made by ICTSI to the port. The program sunsets at the end of this year, although the port can reduce or cease making the payments if labor productivity improves.
The rent rebate program follows a carrier incentive program approved in January. “It is our hope that all parties involved can come together to reach resolution on the fundamental issues that have necessitated today’s action. We view this as a temporary measure,” said Jim Carter, Port of Portland Commission president.