Tuesday, February 11, 2014

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Port of Portland to pay Hanjin Shipping to stay at port

The Port of Portland plans to pay up to $4 million more to persuade Hanjin Shipping and other shipping lines to keep calling in the face of ongoing labor problems and weak terminal productivity.

Port commissioners will vote Wednesday on an incentive plan to pay Hanjin and other shipping lines $20 per-container moved through Portland up to a certain threshold. Carriers would get an added $25 payment for each increase in the number of containers they transported.

The incentive plan is being considered as Hanjin officials are poised to decide any day now whether to continue weekly vessel calls at Portland, and it is the most generous package the port has given shipping lines since labor disputes erupted in 2012.

"This is part of our concerted effort to keep Hanjin here," said Sebastian Degens, port general manager of marine business development. "I'm optimistic that it will be successful."

Hundreds of Northwest exporters and importers depend on Hanjin to carry cargo to and from Asia. But Hanjin has suffered heavy global financial losses and looking for ways to cut costs. Hanjin managers said the company may end calls on Portland or Seattle, or at one of two ports in British Columbia: Vancouver or Prince Rupert.

The incentive plan expected to be adopted Wednesday at the commissioners' monthly meeting doubles a $10-a-container carrot that the port gave container carriers last year, although that program was capped at $1 million.

But the 2014 incentive package would give nothing to the port's terminal operator, ICTSI Oregon Inc., which received $2.7 million in 2012 and $3.4 million in 2013. Those payments, essentially in the form of rental rebates, were attributed to losses stemming from disputes that the port and ICTSI had with the International Longshore and Warehouse Union.

"Given the enormous significance of Hanjin being on the edge of its decision, we thought moving all of our incentive payment this time to the carriers would be the most meaningful way we could do the retention," Degens said.

For more of the Oregon Live story: oregonlive.com

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