(The following story by John Gillie appeared on the News Tribune website on October 8.)
TACOMA, Wash. — A new $3 million deal between the Port of Tacoma and the Union Pacific Railroad will bring additional business to the port’s underused South Intermodal Rail Yard.
The deal, approved by the port commission last week, will shift Union Pacific’s domestic intermodal container business from the Port of Seattle’s Argo Rail Yard to Tacoma. Union Pacific is expected to sign the deal soon.
Both ports are happy with the deal, said Port of Tacoma spokesperson Tara Mattina.
The shift of Union Pacific’s domestic container traffic to Tacoma will allow Union Pacific in Seattle to accept more international container traffic for rail transport to the Midwest and the East Coast. The railroad in recent months has declined to provide quotes to handle new international business because it didn’t have the capacity to handle it in Seattle, said Michael Reilly, the Port of Tacoma’s director of intermodal business.
At its new Tacoma location, the railroad will have additional capacity to handle domestic containers beyond what it had handled in Seattle.
Domestic containers are the same as those carried from overseas on ships except their contents originate within the U.S. and are destined for U.S. distribution centers or retail outlets.
The railroad is renting 10 acres of land across Milwaukee Way from the South Intermodal Yard. The port will receive about $70 per container in total lift and facility fees.
The port’s contract with the railroad calls for a minimum of 35,000 “lifts” during the first year of the new facility’s operations. A “lift” is a movement from a rail car to a truck or vice versa.
The 10-year deal calls for an escalating number of lifts each year, thus increasing the port’s income. Under the terms of the deal, the railroad is committed to the first five years of the contract with yearly options to renew through the 10th year.
The South Intermodal Yard was built south of East 11th Street and east of Milwaukee Way in the ’80s when SeaLand Lines moved to the Port of Tacoma. The yard now serves Maersk Line and Horizon Line. The yard area once was the site of the Milwaukee Road’s Tacoma station.
Declining container volume through the yard had threatened business.
The new domestic business will help the port restore the yard to a level closer to its capacity and maintain employment at the yard, said Mattina.
The port will have to use some of the area it now uses for auto storage as the staging area for the new operations.