PRESS RELEASE – FOR IMMEDIATE RELEASE
Oregon Port of Willamette Releases Independent Financial Assessment – Conclusion: Brooks Set Up for Success
February 13, 2019
Salem, OR – The Oregon Port of Willamette has released an independent financial assessment which supports the prospects for economic success for its proposed intermodal facility in Brooks, Oregon. Strategic Rail Finance, a Pennsylvania company which develops business plans and analyzes financial prospects for rail-related projects, reviewed all of the Oregon Port of Willamette project proposal for Brooks and concluded: “Strategic Rail Finance concludes that the business solution offered by Oregon Port of Willamette can be successful for Seattle/Tacoma shippers, vessel operators, and other key stakeholders.”
“We already had a positive financial model from the FCS Group, which supports our position that this intermodal facility will not only reduce congestion and carbon emissions by putting freight onto rail, but will also be a profitable business operation,” said Kevin Mannix, Executive Director of the Oregon Port of Willamette. “The state brought in a third-party review by a company known as the Tioga Group, and they raised concerns as to certain financial aspects of the operation for our Brooks project as well as the project in Millersburg,” noted Mannix. “While we disagree with the analysis by the Tioga Group, we decided to get a comprehensive independent analysis by another company. We asked them to treat the TIOGA issues as legitimate, even though the Oregon Port of Willamette challenges that Tioga analysis,” Mannix added.
Strategic Rail Finance carried out a comprehensive review and concluded: “Our independent modeling and assessment has determined that the baseline Oregon Port of Willamette submission provides for acceptable financial results across all conventional perspectives and remains positive…”
Strategic Rail Finance added: “an inland intermodal port which is aligned with the Port of Seattle/Tacoma is a viable business solution so long as there is a sizable market capture in the Willamette Valley and so long as intermodal trains can gain direct and efficient access to on-dock port terminals in Seattle. The solution is proposed to counter current over-the-road drayage between Willamette Valley markets and Seattle, an operating environment which is currently impacted by significant highway and port district congestion, driver shortages, and resulting high drayage costs.” “We note that the Linn County Commissioners are considering providing a $250,000 per year subsidy to the Millersburg project for 10 years as a backup plan in case the Millersburg project is not financially successful,” said Mannix. “Our Brooks project is located in Marion County and I have written our Marion County Commissioners that we seek no county subsidy for the Brooks project. We can address any issues which arise and maintain a financially strong program. The start-up grant from the state is all that we need.”
One of the features of the Oregon Port of Willamette project which was unknown to the Tioga Group when they conducted their review was that Cordele Intermodal Services (CIS) has agreed to operate the intermodal facility in Brooks. Jonathan Lafevers, CEO of CIS, carried out his own financial analysis and supports the financial strength of the Brooks project. His review of the Strategic Rail Finance report reinforces his analysis. “These cost estimates and sensitivities are important tools to have in our tool chest moving forward and better equip us to negotiate favorable longstanding service arrangements with logistics partners,” said Lafevers.
Michael Sussman, President of Strategic Rail Finance, stated: “We pride ourselves on providing solid business plans and analysis which private sector investors can rely upon in making investment decisions. We are favorably impressed with the financial plans by the Oregon Port of Willamette. But we are also favorably impressed with the nature of their operation and the way they have put together a plan which is sensitive to the goals set by the Governor and the Legislature,” said Sussman.
Lafevers further described the approach CIS will take in managing the Brooks intermodal facility: “Attracting sufficient container volumes to this facility is important to our success but by growing volume incrementally we will lower barriers of entry to all stakeholders in the supply chain. We plan to offer a full menu of logistics services in conjunction with our strategic partners to become the heart of the Willamette Valley’s intermodal freight network. These critical “last mile” service offerings will ensure that we begin to build more density into the rail system and provide for further efficiencies and costs savings opportunities to our valuable customer base. Our focus of serving the constituents of the Willamette valley will remain our core business mission statement.”