A planned truck-to-rail facility aimed at improving farm exports from Oregon’s Willamette Valley has secured permission to begin construction despite continued uncertainties about its economic viability.

The Oregon Transportation Commission has authorized spending up to $25 million to build the intermodal facility in Millersburg, which would allow direct rail shipping of agricultural products to ports along Washington’s Puget Sound.

Straw, hay, seed and other farm goods commonly travel to Asian markets via container terminals in Seattle and Tacoma, but exporters in Oregon complain that trucking to those ports has grown more expensive and less reliable.

The Millersburg intermodal project would provide another shipping option.

“I feel good about the long-term benefits to agriculture in the region,” said Roger Nyquist, chairman of the Linn County Board of Commissioners, who supports the project. “It will be good for more than just ag, but that alone makes it worth it.”

Weaver Seed of Oregon, based in nearby Crabtree, hires trucks to deliver more than 100 containers a year to the Puget Sound, which is about 243 miles away, said Gary Weaver, its owner. The Millersburg facility would cut that distance to 11 miles.

The reduction in round trips adds up to about twice the circumference of the planet, Weaver said. “That’s what we’re eliminating, just from our little company.”

Truck costs have also climbed as their availability has decreased, he said. “When potatoes and onions come off, trucks are short. They’re short year-round.”

Intermodal yards already exist in Portland, but the project would let trucks offload containers in the mid-Willamette Valley instead of fighting traffic in the state’s most congested metropolitan area.

While state lawmakers approved $25 million in grant money for the intermodal facility in 2017, the project was delayed as transportation officials tried to determine whether it would be financially sustainable.

The state Department of Transportation ultimately recommended full funding for the project, which was recently unanimously approved by OTC, even though an independent economic analysis has raised doubts about its economic feasibility.

In its most recent report on the project, the Tioga Group transportation consultancy firm said the facility’s “successful operation” depends upon “a series of assumptions” that haven’t been verified.

Specifically, Tioga Group determined that ocean carriers effectively subsidize existing intermodal facilities in Portland by making shipping containers available at a reduced price.

However, there is “no confirmation” that any ocean carriers will coordinate container movements to and from the Millersburg facility, the analysis said. Their willingness to participate in the intermodal service depends on a concept that “has not yet been documented in any detail.”

The project would need help from ocean carriers to be competitive with Portland intermodal yards that effectively offer “below cost” container shipping, as well as the “faster, more convenient service” offered by trucks, the report said.

Nyquist, the county commissioner, said he’s confident in the plan but didn’t want to comment on the Tioga Group’s criticisms.

ITS ConGlobal, the terminal operator, and the Union Pacific railroad would not be participating in the project if they didn’t think it would work, Nyquist said.

Tens of thousands of empty containers pass by the Millersburg facility each year, some of which could be diverted to ship farm goods to Asia through a container “matchback” program offered by Union Pacific, he said.

“They’re heading back empty because they don’t have a shipment headed in that direction,” Nyquist said. “The Millersburg facility would be among their last chances to fill those containers before they go back.”

However, agricultural shippers often fail to realize that their exports are a lower priority for ocean carriers than imports from Asia, which command higher container fees, according to a maritime industry executive who didn’t want to be named discussing the intermodal facility.

For example, demand for empty containers is currently so strong in Asia that ocean carriers are shipping them directly back across the ocean after products are offloaded, rather than earning extra revenues by diverting them to domestic exporters, the executive said.

“If its doors were open today, it would be a ghost town,” the executive said of the Millersburg facility.

Ocean carriers effectively subsidize Portland’s intermodal facilities because they’re delivering Asian products to that city and have empty containers available, the executive said. There is no such incentive to reposition containers to Millersburg, which isn’t a major population center.

“That cost will have to be borne by the shipper,” the executive said. “I don’t think it’s going to pair very well. I am still of the opinion that it’s going to be a boondoggle.”

As far as easing traffic congestion around Portland, the intermodal project isn’t likely to make much of a dent, said John Charles, president and CEO of the Cascade Policy Institute free market think tank.

“That is going out of your way to avoid responsibility for a very big problem,” Charles said, adding that Oregon should instead look to build another interstate highway connecting to Vancouver, Wash.

The actual economic practicality of the Millersburg facility is of less consequence to lawmakers than their ability to direct tax dollars to the project, he said.

“Getting the money spent is the victory, that’s what matters,” Charles said. “Once it’s earmarked, the game is over.”