Port of Oakland OKs deal with Outer Harbor Terminals, LLC

Lease termination calls for marine terminal to pay rent, utilities, clean-up costs

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The Port of Oakland has agreed to a lease termination with Outer Harbor Terminals, LLC.  The port’s governing Board of Port Commissioners approved the agreement late this afternoon.  It will now be reviewed by a bankruptcy judge in Delaware overseeing Outer Harbor Terminals, LLC’s request for bankruptcy protection.

Outer Harbor Terminals, LLC announced in January its intention to close its Oakland operation, one of five privately operated marine terminals at the port.  Last month it filed for bankruptcy protection.  If the bankruptcy court approves the lease termination agreement, Outer Terminal will close April 29.

The port said it agreed to the termination to devote its full attention to improving service to cargo owners and other customers in the aftermath of the terminal closure. “We’re not pleased to see a terminal close, but this agreement helps ensure a smooth transition for our customers,” said Port of Oakland Maritime Director John Driscoll.  “All of our attention now is on efficiently migrating their cargo to the other terminals in Oakland.”

The port and terminal operator signed a 50-year-lease in 2009.  The agreement reached today would terminate that lease and impose several conditions:

  • Outer Harbor Terminal will continue Oakland vessel and cargo operations through March 31.

  • Outer Harbor Terminal will pay about $6 million in February and March rent to the Port.

  • The terminal operator will clean up debris and remove equipment on the 166-acre property.

  • It will pay the Port $5.1 million for additional clean-up and repair.

  • The port will provide free rent in April to ensure Outer Harbor Terminal remains open for cargo operations until the shutdown.

The port has developed a Continuity Plan to move ships and cargo to adjacent terminals when Outer Harbor Terminal closes.  It has worked with other terminal operators to relocate ships and cargo from Outer Harbor Terminal.  It has also implemented a $1.5 million Transition Assistance Program to extend gate hours at port terminals.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

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