Port Keeps Hyundai Auto Import Business

PORTLAND-The Port Commission on Wednesday approved a long-term lease with Auto Warehousing Company for Hyundai’s auto-import business. The 10-year, minimum $12.8-million lease deal follows on the heels of similar deals with Honda and Toyota that maintain Portland’s position as the largest auto-handling port on the West Coast.Auto Warehousing Company is the auto processing services provider for Glovis America, Inc., which handles logistics for both Hyundai and Kia. Glovis recently asked Northwest ports to submit proposals for consolidating Hyundai and Kia’s Pacific Northwest auto imports at one facility. The Port of Portland currently handles Hyundai imports and the Port of Tacoma handles Kia imports. A number of Pacific Northwest ports submitted consolidation proposals, including the Port of Portland, but after reviewing the proposals Glovis decided to continue importing through both Portland and Tacoma. The 10-year lease in Portland is for 130 acres and may be extended by 15 years in five-year increments. A source at the port tells GlobeSt.com the lease rate is $14.25 per vehicle for the first 108,000 vehicles and then $8 per vehicle after that. The minimum annual rent is $1.28 million, which equates to about 90,000 vehicles. Hyundai, which began importing autos through Portland in 1990, imported 133,979 autos through the Port in 2004 and expects to import 115,000 autos through the port in 2005. In exchange for the long-term lease commitment, the Port will provide $10 million in capital improvements including 46 acres of new paved auto storage, new drainage, lighting, security fencing, and striping.”Hyundai brings about 110 auto ships into Portland each year generating 220 tug boat trips, 220 six-to-eight-person linesmen crews, and 440 river and bar pilot trips,” says Port Marine Marketing General Manager Bob Lipscomb. “That’s a lot of high-paying transportation jobs. And those are just the jobs required to get their ships to our dock.”Last fall, American Honda Motor Co. inked a long-term lease deal with the port for its 61-acre auto processing facility here. The company signed a 10-year lease (not including three five-year options) that will start out generating almost $1.4 million per year for the port and then escalate every three years based on the Consumer Price Index. In consideration of the lease, the port committed to undertake as much as $10 million in near-term capital improvements. In 2002, the Port approved a 15-year, $21-million lease agreement with Toyota Motor Sales USA for its 82-acre auto-processing operation at Terminal 4. In consideration, the Port agreed to invest $9 million in facility upgrades and dock work at the terminal.