Port of Oakland Update


OAKLAND, California - The operator of the Port of Oakland’s second-largest terminal filed for bankruptcy Monday. The filing comes less than two weeks after the operator suddenly announced ceasing operations about seven years into a 50-year lease. Ports America announced on January 19 it would wind down operations at the port’s Outer Harbor terminal over the next 90 days, saying it wants to concentrate on other West Coast ports.

However, in court filings presented this past Monday, as Ports America filed for Chapter 11 bankruptcy protection, the company says it has been operating at a loss for years in Oakland and is expecting to have difficulty with immediately paying its utility bills as it winds down its operations, estimated to be about $221,500 per month. For now, Ports America remains in the facility, still owes rent to the port and there is cleanup that required to be done before it permanently leaves Outer Harbor on March 31,

The Port of Oakland has been left suddenly redirecting cargo from Outer Harbor to the port’s other four terminals. While they have the capacity to absorb the excess cargo they will need to introduce some efficiency to avoid backups, The Port of Oakland is moving aggressively to redirect all of the ships and containers to other terminals within the port, to avoid carriers and cargo to seek alternatives and leave Oakland. Whether Ports America’s bankruptcy petition will negatively impact that process is not immediately clear, but port officials state they are “disappointed” and that it indicates a lack of cooperation in the transition on the part of Ports America.

Ports America signed a 50-year lease to operate on the 208-acre facility early in 2009. Most leases at the Port of Oakland last for only 10 or 15 years, but Ports America signed the exceptionally long lease while promising to make improvements to the terminal’s infrastructure.

It is understood that the port is now actively looking for a partner who will help modernize equipment at the terminal. According to a Port spokesperson, there was no investment on their part to the degree required to keep the facility up to date or as modern as it could be, under the Ports America tenure. The port is making good progress in its negotiations with potential partners and is open to a wide variety of uses for the land beyond cargo container shipping. The port hopes to announce a new tenant soon, though the latter may be signing lease(s) for only segments of the property.


Keeping you Updated,

Aaron Poole

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