Horizon Lines and APM Terminals have agreed to a six-year lease extension at the Port of Tacoma, in exchange for rail traffic plans and up to $2 million in improvements, port officials said during a June 24 commission meeting.
Curt Stoner, senior manager of the port’s container terminal business department, explained the details of the agreement and improvements, which include re-roofing four terminal buildings, removing a transload area, repair/replace outdated dock plates and upgrades to the terminal’s office space.
“We don’t expect these expenses to accrue in the current year, but we do expect them in 2011,” Stoner said.
In exchange for the improvements, Horizon Lines and APM Terminals will guarantee 2,750 intermodal lifts per year and active participation in the port’s Truck Emissions Improvement Program.
In 2009, Horizon Lines began requesting proposals for terminal services at the 135-acre facility based on the fact that their services agreement with APM Terminals was due to expire in December 2010.
Last December, the port pitched a proposal to Horizon Lines; considering a contribution of up to $2 million in facility improvements at any port terminal the company chose, if it extended the service contract for a minimum of five years. Last February, Horizon Lines agreed to the proposal and publicly announced they would stay in Tacoma. Both the Horizon Alaska service and Hawaiian PEX service are expected to call at APM Terminals during this period and an estimated 150 direct terminal-related jobs will be retained in Tacoma.
Horizon Lines Director of Operations Ken Gill expressed his excitement for the proposal and a future in Tacoma.
“This is an excellent opportunity to continue our partnership with the Port of Tacoma,” Gill told commissioners. “We have facility improvements included in the proposal that need to be completed to take care of several safety-related concerns.”
APM Terminals, formerly a division of Maersk Line and Sea-Land Service, have been customers at the port since 1985. APM Terminals was formed in December 2002 as a sister company to Maersk Sea-Land. In response to the global economic downturn, Maersk entered into a vessel sharing agreement with CMA-CGA in 2008, subsequently shifting its cargo volumes to the Port of Seattle.
While most commissioners expressed excitement at the shipping company’s commitment to the port, they also approached the improvement proposal with caution.
“I don’t want this agreement to be taken as a routine obligation we’ll always take in the future,” Commissioner Don Meyer noted.
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