According to the Port’s director of intermodal business, Michael Reilly, the agreement allows UP to expand its presence in Tacoma by moving its domestic service from its Seattle Argo Intermodal yard, freeing up capacity for additional international business.
“As well as providing additional business activity for the South Intermodal Yard, this agreement strengthens the diversity of our Port’s intermodal business by significantly adding to our base of domestic container movements,” explained Reilly.
The lease term is for five years with five one-year renewal options. UP will lease 10 acres, with provision 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% per year. Lift fees charged to UP will be based upon Port of Tacoma costs from Pacific Rail Service.