Port, Union Pacific will pursue operating agreement

The Port of Tacoma Commission authorized Port Executive Director Timothy J. Farrell Oct. 2 to sign a lease and operating agreement with Union Pacific Railroad.
When signed by both parties, Union Pacific (UP) will handle a minimum of 35,000 container intermodal lifts at the Port’s South Intermodal Yard. Activity is expected to begin later this year.

According to Port of Tacoma Director of Intermodal Business Michael Reilly, the agreement allows UP to expand its presence in Tacoma by moving the Railroad’s domestic service from its Seattle Argo Intermodal yard, freeing capacity for additional international business. “In addition to providing additional business activity for the South Intermodal Yard,” explained Reilly, “this agreement strengthens the diversity of our Port’s intermodal business by significantly adding to our base of domestic container movements.”

“This agreement allows both Union Pacific and the Port of Tacoma to utilize our respective assets more effectively to better serve our respective domestic and international customers.” Said John Kaiser, Union Pacific Vice President and General Manager – Intermodal. “We appreciate the willingness of the Port of Tacoma to work closely with us to create a win-win solution that promotes future growth in the Puget Sound area.”

The lease term is five years with five one-year renewal options. UP will lease 10 acres with provisions to expand up to 25 acres during the term of the lease. The Railroad will guarantee a minimum of 35,000 intermodal lifts during the first year of operations and 45,000 lifts for the second year. Thereafter, the minimum lift guarantee will be increased by 5 percent per year. Lift fees charged to UP will be based upon Port of Tacoma costs from Pacific Rail Service.

The South Intermodal Yard is one of four intermodal rail yards at the Port of Tacoma. The 17-acre (6.9-hectare) facility, with more than 8,500 feet (2,591 meters) of track, is located along Milwaukee Way, adjacent to APM Terminals. In addition to UP business, the facility serves Maersk Line and Horizon Lines business.