Washington’s Ports Poised to Compete with Canada

When this column addressed the congestion crisis shared by California's leading seaports, there was considerable evidence that cooperation would help mitigate the risk of cargo diversion to the Gulf and U.S. East Coast. That same concern is shared by Washington's ports, too, but they see another diversion threat: Canada.

The once bitter rivalry between the ports of Tacoma and Seattle seems to have come to an end as both parties have entered into a joint marketing program designed to leverage the Puget Sound's logistical advantage.

As reported in SCMR last spring, the Seattle and Tacoma port commissions planned to form The Northwest Seaport Alliance to unify management of the two ports' marine cargo terminals and related functions. The two ports would, however, retain existing port commission governance and asset ownership.

Now that they have the full blessing of the the Federal Maritime Commission, port leaders say they will begin working together in earnest.

“This is not so much a merger, as it is a marriage,” says Susan Stoltzfus, a Port of Seattle media relations associate. “And like any marriage, both sides will keep their separate identities,” The Tacoma and Seattle ports currently comprise the third-largest ocean cargo container gateway in North America, and their marine cargo operations support more than 48,000 jobs.

One prominent job yet to be filled will be to replace Seattle's outgoing maritime director, Linda Styrk, the former Managing Director. She recently resigned to accept a new position as Executive Director for the Puget Sound Pilots.While this development may represent mere coincidence, it brings into question how organized longshore labor will view the alliance and implications for fewer dockside workers.

According to Stoltzfus, the International Longshore and Warehouse Union has not voice any objections…so far.
“Hopefully, the ILWU will view this as just a reconfiguration of terminal operations that will downsize some and upsize others,” she said.

The ILWU is part of an executive advisory council the ports created to hear from stakeholders on ways to improve cargo operations.

The FMC had recently given its blessings to the joint marketing efforts for the Ports of Los Angeles and Long Beach, and that relationship appears to be stronger.

“It's far easier to promote the benefits of San Pedro Bay when we are both reading from the same page,” said POLA Director of Media Relations Philip Sanfield. “While we do not know all the details of the PNW alliance, we would assume that it's driven to achieve cargo optimization…and that's a good thing.”

But in the PNW, optimizing the international container terminals would leave about 230 acres for diversification. This includes timber, breakbulk and roll-on/roll-off cargo (principally automobiles). At the same time, Terminal 5 in Seattle and the General Central Peninsula terminals in Tacoma are vying to host the new generation of mega-vessels now being built to serve the transpacific. Industry forecasts, by the way, project box traffic to grow from 3.4 million twenty-foot equivalent units (TEUs) to six million over the next decade.

Lending to this urgency for collaboration is the pressure being exerted by the British Columbia ports of Vancouver and Prince Rupert, which together tripled their container market share last year. They also comprise this year's “top ports” in Logistics Management’s annual “Quest for Quality Award.”

Hardly satisfied with the status quo, Prince Rupert plans to spend $158 million to increase container capacity to 1.3 million TEUs a year, and is promoting itself as “the fastest route” for moving goods to and from Asia. It is not only the deepest port in the PNW, but also nearly 70 hours closer to Shanghai than ports in Southern California.
According to the FMC, roughly 87 percent of inbound containers at Prince Rupert were moved by rail to U.S. Midwest markets while cargo volume dropped precipitously at Seattle and Tacoma.

Time will tell if Washington's ports have reacted early enough to reverse this trend, but skeptics argue that if regulatory red tape is not cut to expedite new terminal construction, both ports will fail to keep pace with Canada's more enlightened growth policy.

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